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National Services Workshop
Workshop report
Karachi 26-27 May 2006
National Services Workshop
Workshop report
Karachi 26-27 May 2006
This publication has been produced with the assistance of the European Union (EU) as part of an EU-funded Trade Related Technical Assistance (TRTA) programme with the Government of Pakistan The International Trade Centre UNCTADWTO (ITC) is implementing the programme The content of this publication is the sole responsibility of the consultant Facts and figures set forth in this publication are the responsibility of the consultant and should not be considered as reflecting the views or carrying the endorsement of the EU ITC UNCTAD or WTO The factual details and in-country resources in the publication have been researched and compiled by the consultant ITC has not formally edited this report
Written by Majid Ali Wajid
copy International Trade Centre (UNCTADWTO) Palais des Nations 1211 Geneva 10 Switzerland Email itcregintracenorg httpwwwintracenorg June 2006
ITC Your Partner in Trade Development The International Trade Centre is the technical cooperation agency of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO) for operational and enterprise-oriented aspects of international trade development As the United Nations focal point for technical cooperation in trade promotion ITC works with developing countries and economies in transition to set up effective trade promotion programmes to expand their exports and improve their import operations ITC works in six areas
Product and market development Development of trade support services Trade information Human resource development International purchasing and supply management Needs assessment programme design for trade promotion
Page ii
Contents
Abbreviations i i i
Introduction 1
Summary of workshop presentations and discussions 3
Introductory and scene setting session 3
Panel sessions ndash Sectoral challenges and opportunities5
Financial Services panel (Banking and Securities) 5 Educational Services panel 7 Professional Services panel (Management Consultancy Legal and Accounting) 9 Construction and Related Engineering Services panel 15 Energy and Environmental Services panel 19 Transport Services panel 22
Concluding Session 23
Report by Rapporteur Priorities for Service Export Roadmap 23 Pakistan service export needs amp priorities Discussion 26
Annex 1 - Workshop Programme 28
Annex 2 ndash List of Participants 34
Page i
Page ii
Abbreviations
ADB Asian Development Bank AEDB Alternate Energy Development Board BPO Business Process Outsourcing CAR Central Asian Republic CBR Central Board of Revenue EC European Commission ECO Economic Cooperation Organization ENT Economic Needs Test EPB Export Promotion Bureau ERP Enterprise Resource Planning EU European Union EXIM Export-Import FPCCI Federation of Pakistan Chambers of Commerce and Industry GATS General Agreement on Trade in Services HEC Higher Education Commission IAS International Accounting Standards IBA Institute of Business Administration IBRD International Bank for Reconstruction and Development ICAP Institute of Chartered Accountants of Pakistan ICMAP Institute of Cost and Management Accountants of Pakistan IFRS International Financial Reporting Standards IIN Industrial Information Network ISA International Standards of Auditing ITC International Trade Centre UNCTADWTO LUMS Lahore University of Management Sciences MOC Ministry of Commerce NBP National Bank of Pakistan NEPRA National Electric Power Regulatory Authority NESPAK National Engineering Services Pakistan (Pvt) Ltd NTTFC National Trade and Transport Facilitation Committee PCATP Pakistan Council of Architecture and Town Planning PEC Pakistan Engineering Council SBP State Bank of Pakistan SCR Services Capacity Report SECP Securities and Exchange Commission of Pakistan SME Small and Medium Enterprise SMEDA Small and Medium Enterprises Development Authority SWOT Strengths Weaknesses Opportunities Threats TEVTA Technical Education and Vocational Training Authority TRTA Trade Related Technical Assistance TUSDEC Technical Up gradation and Skills Development Company WAPDA Water and Power Development Authority WTO World Trade Organization
Page iii
Page iv
Introduction
A National Services Workshop was held by the International Trade Centre UNCTADWTO (ITC) under its European Union-funded Trade Related Technical Assistance Programme (TRTA) in conjunction with the Institute of Business Administration (IBA) in Karachi on 26 and 27 May 2006 This workshop brought together public officials from the Ministry of Commerce (MOC) and the regulatory authorities that govern service industries as well as private sector representatives of service associations and service firms to discuss the enhancement of service firm competitiveness the services export potential of Pakistan as well as services issues at play in negotiations under the General Agreement on Trade in Services (GATS) in the World Trade Organisation (WTO)
The workshop was designed to deepen the understanding of the commercial and economic implications of services negotiations and the emerging multilateral trading system It allowed public and private sector decision-makers to anticipate changes that additional services commitments would require and to position themselves within the multilateral trading environment It was primarily aimed at equipping business leaders to play a more meaningful advocacy role with the government with a view to improving the environment for service providers through specific commitments in the GATS The workshop was also designed to provide input to develop and refine the services export roadmap for Pakistan
The workshop allowed relevant regulatory authorities and private sector representatives to discuss the scope of the current regulatory framework including restrictions and limitations on foreign investment and the direction of regulatory evolution They considered the contours of the home market for service industries including its strengths and weaknesses new product developments service supply limitations and the countries that domestic firms target for export of services This helped the Government to determine whether the existing institutional and legislative framework would support further commitments in the GATS as a reflection of requests from Pakistanrsquos trading partners
The workshop inter alia provided
1 A better understanding of the key issues in trade in services
2 A clear identification of trade constraints and impediments in specific service sectors
3 Identification of means to overcome trade obstacles to gain market access for export of services
4 A precise recognition of the range of issues pertinent to services regulatory policies as they relate to service exports and WTO negotiations
5 A list of priorities as a reflection of sectoral interests
The workshop covered financial services including banking and securities education professional services including management consultancy legal and accountancy services construction and related engineering services environmental and energy services and transport services
International Trade Centre Page 1
Structure of the workshop
The two-day workshop was structured with an introductory and scene setting component followed by panel sessions and a concluding session with specific reference to service export needs and priorities The most significant feature of the workshop was the dialogue between public and private sector representatives from relevant services sectors The government and service regulatory authorities presented priority issues and representatives from respective services associations and firms responded All then participated in an extensive question and answer period The various methods of interaction provided an environment conducive for learning questioning and exchanging of ideas Approximately 67 people attended the workshop five of whom were women The agenda of the workshop is included as Annex 1 to this report A summary of the sessions is provided below
Page 2 International Trade Centre
Summary of workshop presentations and discussions
Friday 26 May 2006
Introductory and scene setting session
Opening ceremony
Arif Ahmed Khan (National Programme Coordinator of ITC) welcomed the participants of the workshop and invited Eric Alvarez Gurza (ITCrsquos Director of the Office for Asia-Pacific Latin America and the Caribbean) to open the conference Mr Alvarez described the mission of the European Commission Trade Related Technical Assistance (EC TRTA) programme and its work in assisting Pakistan in trade related matters He recognized the support of the Ministry of Commerce (MOC) in carrying out this mission He outlined the objectives and expectations from the workshop and highlighted the importance of trade in services for Pakistan He described how Mexico had exploited its trade in services potential resulting in economic growth and wished that Pakistan by following the right course of action might benefit as well
Qasim Niaz (MOC) defined the purpose of the event and the role that trade in services can play in the economic growth of Pakistan He emphasized the significance of foreign investment in services and underlined the need for a balanced approach to trade policy to ensure the benefits of trade liberalization while securing growth of the domestic services industry of Pakistan
WTO Services negotiat ions Present state of play
Shaista Sohail (Permanent Mission of Pakistan to the WTO in Geneva) gave the first presentation of the workshop with a comprehensive background of the GATS Agreement She began with Pakistanrsquos geo-economic situation leading to an introduction to GATS from stakeholdersrsquo perspective Ms Sohail explained the legalities of the GATS Agreement including its core provisional objectives of increasing trade in services Explanations were given on the ldquobottom-uprdquo approach of the agreement the technicalities of the Schedule of Commitments what service sectors are included the different modes of supply and the different obligations (as well as their exceptions) that WTO Members can take under the Agreement She also gave an overview of the state of play of the GATS negotiations in Geneva On the market access portion of negotiations the main points included the need for greater capacity by Pakistan in formulating requests and offers An update was given of the discussions on domestic regulation and rules negotiations on emergency safeguard measures government procurement and subsidies Ms Sohail also briefly touched on other horizontal issues such as the outcome of the adopted modalities for autonomous liberalisation
Pakistan Services Capacity Report Key f indings
Arif Ahmed Khan (ITC) presented the key findings of the ITCrsquos Pakistan Services Capacity Report (SCR) The SCR was prepared in 2005 based on a survey of five services sectors of Pakistan including information technology services financial services construction and architectural services professional services and health services The objective of this study was to help Pakistan identify services trade constraints Some of the key findings of the SCR can be found in Box 1
International Trade Centre Page 3
Box 1 Key findings of Pakistan Services Capacity Report bull Absence of the right statistics in Pakistan relating to trade in services
bull Lack of awareness among the domestic service providers of Pakistan with regard to their contribution to the economy
bull Professional services such as legal and accounting have been found to be promising sectors
bull Insurance sector is behind in international presence as compared to other financial services sectors
bull Communication distribution and transport services are significant in terms of scale of services traded but limited mostly to Mode 2
bull Private sector participation needs to be encouraged in areas with Government sector presence such as transport infrastructure media health and education services
bull The regulatory framework should be strengthened with investment in human resources and infrastructure
bull Enhanced coordination with regulatory bodies of those countries that are of importance to service exporters is required to establish common standards and criteria for business
bull Awareness of GATS and its related issues has to be raised among service providers and professional associations
bull Investment in training and marketing skills of employees of service providers is needed to enable them to compete internationally
bull Lending criteria should be tailored for service exporters with minimum acceptable documentation and financial requirements to ensure sufficient export finance
Introductory session ndash Discussions
The discussions began by questioning the marketing strategy of the Government in promoting the exports of services of Pakistan The role of the President the Prime Minister and the Minister of Commerce in promoting the right image of Pakistan abroad in order to seek maximum market access was applauded
Other discussants including Dr Qais Aslam (Government College University) brought up issues related to lack of skills among the domestic service providers of Pakistan Serious concerns were raised regarding the present capability of the services sectors Many were of the view that the gap between academia and services industry needs to be bridged in order to remain competitive It was also pointed out that services associations could play a more effective role in promoting exports of services industries
A participant Mr Babar B Jhumra (Call Centre services industry) commented on the lack of English speaking skills among the applicants that apply for jobs at Call Centre in Pakistan He shared his view that there was a lot of room for Pakistan to export services through Call Centres but this could not be properly exploited due to the poor English Language training standards in the country
More of the discussion revolved around the issue of financing for services exports It was noted that as services lack a security or collateral to offer banks are reluctant to provide credit or lending which makes it difficult for the services industry to remain globally competitive
Page 4 International Trade Centre
Panel sessions ndash Sectoral challenges and opportunities
Financial Services panel (Banking and Securities)
Azhar Kureshi (State Bank of Pakistan ndash SBP) made the first presentation of this panel SBP is the regulatory authority in Pakistan for banking services Mr Kureshi explained the role of SBP as a regulator providing a level playing field for domestic and foreign banks in the context of the WTO He said banking regulations are made available in detail by the SBP Foreign banks have been present in Pakistan for the last 50 years and for the last decade there has been a substantial transformation in the banking system There are no restrictions on setting up banks in Pakistan As to capital requirements the international standards as reflected under the Basel Accords are being followed by SBP While giving details of the monetary limits imposed on banks he said that currently for entry of banks a capital of at least Rupees 2 billion was required and this was to be increased by Rupees 1 billion each year till 2009 so that the minimum capital limit becomes Rupees 6 billion by 2009 The purpose is to make the banks capital-intensive and secure and encourage smaller banks to merge together and become strong institutions
Mr Kureshi noted that as far as policy is concerned the banks their Boards of Directors and senior management in Pakistan were free to make their policies subject to prudential regulations He said that export refinance was not a subsidized or a SBP-sponsored scheme and the rate was linked to yield on government paper and was thus market based For lending in general he said that previously SBP issued instructions for lending in agricultural and industrial finance and other priority sectors but now banks are free to decide With regard to the issue of lending to the services industry he said that banks already have their modelling techniques for lending He suggested that the weakness in lending to service exporters was due to a fear of the unknown or unwillingness on the part of the domestic banks Mr Kureshi suggested that the SBP could only encourage the banks to lend to services exporters therefore an active forum such as the Pakistan Bankers Association which interacts with the SBP on a quarterly basis should consider service export lending practices as a priority matter
Imtiaz Haider (Securities and Exchange Commission of Pakistan ndash SECP) gave a presentation explaining in detail the role of SECP as a regulator of the capital market and corporate sector in Pakistan Beginning with the regulatory objectives and organizational structure he provided an overview of the current state of the stock market He explained how the transformation of the regulatory system had improved the capital market environment and ran through the reforms and achievements of the regulator He particularly emphasized the system of checks and balances of the capital market and corporate sector maintained by the SECP He also mentioned the future plans of SECP While comparing the local market with the international market he noted that the SECP was using state-of-the-art technology Integration and demutualization of stock exchanges was on the top of the agenda Enhancing monitoring and the regulatory framework for online trading was also a priority He wished that the brokers in Pakistan would establish branch networks abroad He was disappointed that while the number of brokers in Pakistan exceeded those in other countries they had few branch networks abroad He also noted that only a national could be a member of a stock exchange however by establishing a company in Pakistan a firm can get a seat in the stock exchange Once a member of the stock exchange there is no difference in treatment between a local and a foreign entity He encouraged the participants to visit the SECPrsquos website for relevant information presented in a user-friendly way
Tahira Raza (National Bank of Pakistan ndash NBP) shared her views on the role of the regulatory authority and the operations of the banks She observed that although the SBP had come up with market-based and liberalized policies the banks felt the environment was still not conducive to
International Trade Centre Page 5
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
This publication has been produced with the assistance of the European Union (EU) as part of an EU-funded Trade Related Technical Assistance (TRTA) programme with the Government of Pakistan The International Trade Centre UNCTADWTO (ITC) is implementing the programme The content of this publication is the sole responsibility of the consultant Facts and figures set forth in this publication are the responsibility of the consultant and should not be considered as reflecting the views or carrying the endorsement of the EU ITC UNCTAD or WTO The factual details and in-country resources in the publication have been researched and compiled by the consultant ITC has not formally edited this report
Written by Majid Ali Wajid
copy International Trade Centre (UNCTADWTO) Palais des Nations 1211 Geneva 10 Switzerland Email itcregintracenorg httpwwwintracenorg June 2006
ITC Your Partner in Trade Development The International Trade Centre is the technical cooperation agency of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO) for operational and enterprise-oriented aspects of international trade development As the United Nations focal point for technical cooperation in trade promotion ITC works with developing countries and economies in transition to set up effective trade promotion programmes to expand their exports and improve their import operations ITC works in six areas
Product and market development Development of trade support services Trade information Human resource development International purchasing and supply management Needs assessment programme design for trade promotion
Page ii
Contents
Abbreviations i i i
Introduction 1
Summary of workshop presentations and discussions 3
Introductory and scene setting session 3
Panel sessions ndash Sectoral challenges and opportunities5
Financial Services panel (Banking and Securities) 5 Educational Services panel 7 Professional Services panel (Management Consultancy Legal and Accounting) 9 Construction and Related Engineering Services panel 15 Energy and Environmental Services panel 19 Transport Services panel 22
Concluding Session 23
Report by Rapporteur Priorities for Service Export Roadmap 23 Pakistan service export needs amp priorities Discussion 26
Annex 1 - Workshop Programme 28
Annex 2 ndash List of Participants 34
Page i
Page ii
Abbreviations
ADB Asian Development Bank AEDB Alternate Energy Development Board BPO Business Process Outsourcing CAR Central Asian Republic CBR Central Board of Revenue EC European Commission ECO Economic Cooperation Organization ENT Economic Needs Test EPB Export Promotion Bureau ERP Enterprise Resource Planning EU European Union EXIM Export-Import FPCCI Federation of Pakistan Chambers of Commerce and Industry GATS General Agreement on Trade in Services HEC Higher Education Commission IAS International Accounting Standards IBA Institute of Business Administration IBRD International Bank for Reconstruction and Development ICAP Institute of Chartered Accountants of Pakistan ICMAP Institute of Cost and Management Accountants of Pakistan IFRS International Financial Reporting Standards IIN Industrial Information Network ISA International Standards of Auditing ITC International Trade Centre UNCTADWTO LUMS Lahore University of Management Sciences MOC Ministry of Commerce NBP National Bank of Pakistan NEPRA National Electric Power Regulatory Authority NESPAK National Engineering Services Pakistan (Pvt) Ltd NTTFC National Trade and Transport Facilitation Committee PCATP Pakistan Council of Architecture and Town Planning PEC Pakistan Engineering Council SBP State Bank of Pakistan SCR Services Capacity Report SECP Securities and Exchange Commission of Pakistan SME Small and Medium Enterprise SMEDA Small and Medium Enterprises Development Authority SWOT Strengths Weaknesses Opportunities Threats TEVTA Technical Education and Vocational Training Authority TRTA Trade Related Technical Assistance TUSDEC Technical Up gradation and Skills Development Company WAPDA Water and Power Development Authority WTO World Trade Organization
Page iii
Page iv
Introduction
A National Services Workshop was held by the International Trade Centre UNCTADWTO (ITC) under its European Union-funded Trade Related Technical Assistance Programme (TRTA) in conjunction with the Institute of Business Administration (IBA) in Karachi on 26 and 27 May 2006 This workshop brought together public officials from the Ministry of Commerce (MOC) and the regulatory authorities that govern service industries as well as private sector representatives of service associations and service firms to discuss the enhancement of service firm competitiveness the services export potential of Pakistan as well as services issues at play in negotiations under the General Agreement on Trade in Services (GATS) in the World Trade Organisation (WTO)
The workshop was designed to deepen the understanding of the commercial and economic implications of services negotiations and the emerging multilateral trading system It allowed public and private sector decision-makers to anticipate changes that additional services commitments would require and to position themselves within the multilateral trading environment It was primarily aimed at equipping business leaders to play a more meaningful advocacy role with the government with a view to improving the environment for service providers through specific commitments in the GATS The workshop was also designed to provide input to develop and refine the services export roadmap for Pakistan
The workshop allowed relevant regulatory authorities and private sector representatives to discuss the scope of the current regulatory framework including restrictions and limitations on foreign investment and the direction of regulatory evolution They considered the contours of the home market for service industries including its strengths and weaknesses new product developments service supply limitations and the countries that domestic firms target for export of services This helped the Government to determine whether the existing institutional and legislative framework would support further commitments in the GATS as a reflection of requests from Pakistanrsquos trading partners
The workshop inter alia provided
1 A better understanding of the key issues in trade in services
2 A clear identification of trade constraints and impediments in specific service sectors
3 Identification of means to overcome trade obstacles to gain market access for export of services
4 A precise recognition of the range of issues pertinent to services regulatory policies as they relate to service exports and WTO negotiations
5 A list of priorities as a reflection of sectoral interests
The workshop covered financial services including banking and securities education professional services including management consultancy legal and accountancy services construction and related engineering services environmental and energy services and transport services
International Trade Centre Page 1
Structure of the workshop
The two-day workshop was structured with an introductory and scene setting component followed by panel sessions and a concluding session with specific reference to service export needs and priorities The most significant feature of the workshop was the dialogue between public and private sector representatives from relevant services sectors The government and service regulatory authorities presented priority issues and representatives from respective services associations and firms responded All then participated in an extensive question and answer period The various methods of interaction provided an environment conducive for learning questioning and exchanging of ideas Approximately 67 people attended the workshop five of whom were women The agenda of the workshop is included as Annex 1 to this report A summary of the sessions is provided below
Page 2 International Trade Centre
Summary of workshop presentations and discussions
Friday 26 May 2006
Introductory and scene setting session
Opening ceremony
Arif Ahmed Khan (National Programme Coordinator of ITC) welcomed the participants of the workshop and invited Eric Alvarez Gurza (ITCrsquos Director of the Office for Asia-Pacific Latin America and the Caribbean) to open the conference Mr Alvarez described the mission of the European Commission Trade Related Technical Assistance (EC TRTA) programme and its work in assisting Pakistan in trade related matters He recognized the support of the Ministry of Commerce (MOC) in carrying out this mission He outlined the objectives and expectations from the workshop and highlighted the importance of trade in services for Pakistan He described how Mexico had exploited its trade in services potential resulting in economic growth and wished that Pakistan by following the right course of action might benefit as well
Qasim Niaz (MOC) defined the purpose of the event and the role that trade in services can play in the economic growth of Pakistan He emphasized the significance of foreign investment in services and underlined the need for a balanced approach to trade policy to ensure the benefits of trade liberalization while securing growth of the domestic services industry of Pakistan
WTO Services negotiat ions Present state of play
Shaista Sohail (Permanent Mission of Pakistan to the WTO in Geneva) gave the first presentation of the workshop with a comprehensive background of the GATS Agreement She began with Pakistanrsquos geo-economic situation leading to an introduction to GATS from stakeholdersrsquo perspective Ms Sohail explained the legalities of the GATS Agreement including its core provisional objectives of increasing trade in services Explanations were given on the ldquobottom-uprdquo approach of the agreement the technicalities of the Schedule of Commitments what service sectors are included the different modes of supply and the different obligations (as well as their exceptions) that WTO Members can take under the Agreement She also gave an overview of the state of play of the GATS negotiations in Geneva On the market access portion of negotiations the main points included the need for greater capacity by Pakistan in formulating requests and offers An update was given of the discussions on domestic regulation and rules negotiations on emergency safeguard measures government procurement and subsidies Ms Sohail also briefly touched on other horizontal issues such as the outcome of the adopted modalities for autonomous liberalisation
Pakistan Services Capacity Report Key f indings
Arif Ahmed Khan (ITC) presented the key findings of the ITCrsquos Pakistan Services Capacity Report (SCR) The SCR was prepared in 2005 based on a survey of five services sectors of Pakistan including information technology services financial services construction and architectural services professional services and health services The objective of this study was to help Pakistan identify services trade constraints Some of the key findings of the SCR can be found in Box 1
International Trade Centre Page 3
Box 1 Key findings of Pakistan Services Capacity Report bull Absence of the right statistics in Pakistan relating to trade in services
bull Lack of awareness among the domestic service providers of Pakistan with regard to their contribution to the economy
bull Professional services such as legal and accounting have been found to be promising sectors
bull Insurance sector is behind in international presence as compared to other financial services sectors
bull Communication distribution and transport services are significant in terms of scale of services traded but limited mostly to Mode 2
bull Private sector participation needs to be encouraged in areas with Government sector presence such as transport infrastructure media health and education services
bull The regulatory framework should be strengthened with investment in human resources and infrastructure
bull Enhanced coordination with regulatory bodies of those countries that are of importance to service exporters is required to establish common standards and criteria for business
bull Awareness of GATS and its related issues has to be raised among service providers and professional associations
bull Investment in training and marketing skills of employees of service providers is needed to enable them to compete internationally
bull Lending criteria should be tailored for service exporters with minimum acceptable documentation and financial requirements to ensure sufficient export finance
Introductory session ndash Discussions
The discussions began by questioning the marketing strategy of the Government in promoting the exports of services of Pakistan The role of the President the Prime Minister and the Minister of Commerce in promoting the right image of Pakistan abroad in order to seek maximum market access was applauded
Other discussants including Dr Qais Aslam (Government College University) brought up issues related to lack of skills among the domestic service providers of Pakistan Serious concerns were raised regarding the present capability of the services sectors Many were of the view that the gap between academia and services industry needs to be bridged in order to remain competitive It was also pointed out that services associations could play a more effective role in promoting exports of services industries
A participant Mr Babar B Jhumra (Call Centre services industry) commented on the lack of English speaking skills among the applicants that apply for jobs at Call Centre in Pakistan He shared his view that there was a lot of room for Pakistan to export services through Call Centres but this could not be properly exploited due to the poor English Language training standards in the country
More of the discussion revolved around the issue of financing for services exports It was noted that as services lack a security or collateral to offer banks are reluctant to provide credit or lending which makes it difficult for the services industry to remain globally competitive
Page 4 International Trade Centre
Panel sessions ndash Sectoral challenges and opportunities
Financial Services panel (Banking and Securities)
Azhar Kureshi (State Bank of Pakistan ndash SBP) made the first presentation of this panel SBP is the regulatory authority in Pakistan for banking services Mr Kureshi explained the role of SBP as a regulator providing a level playing field for domestic and foreign banks in the context of the WTO He said banking regulations are made available in detail by the SBP Foreign banks have been present in Pakistan for the last 50 years and for the last decade there has been a substantial transformation in the banking system There are no restrictions on setting up banks in Pakistan As to capital requirements the international standards as reflected under the Basel Accords are being followed by SBP While giving details of the monetary limits imposed on banks he said that currently for entry of banks a capital of at least Rupees 2 billion was required and this was to be increased by Rupees 1 billion each year till 2009 so that the minimum capital limit becomes Rupees 6 billion by 2009 The purpose is to make the banks capital-intensive and secure and encourage smaller banks to merge together and become strong institutions
Mr Kureshi noted that as far as policy is concerned the banks their Boards of Directors and senior management in Pakistan were free to make their policies subject to prudential regulations He said that export refinance was not a subsidized or a SBP-sponsored scheme and the rate was linked to yield on government paper and was thus market based For lending in general he said that previously SBP issued instructions for lending in agricultural and industrial finance and other priority sectors but now banks are free to decide With regard to the issue of lending to the services industry he said that banks already have their modelling techniques for lending He suggested that the weakness in lending to service exporters was due to a fear of the unknown or unwillingness on the part of the domestic banks Mr Kureshi suggested that the SBP could only encourage the banks to lend to services exporters therefore an active forum such as the Pakistan Bankers Association which interacts with the SBP on a quarterly basis should consider service export lending practices as a priority matter
Imtiaz Haider (Securities and Exchange Commission of Pakistan ndash SECP) gave a presentation explaining in detail the role of SECP as a regulator of the capital market and corporate sector in Pakistan Beginning with the regulatory objectives and organizational structure he provided an overview of the current state of the stock market He explained how the transformation of the regulatory system had improved the capital market environment and ran through the reforms and achievements of the regulator He particularly emphasized the system of checks and balances of the capital market and corporate sector maintained by the SECP He also mentioned the future plans of SECP While comparing the local market with the international market he noted that the SECP was using state-of-the-art technology Integration and demutualization of stock exchanges was on the top of the agenda Enhancing monitoring and the regulatory framework for online trading was also a priority He wished that the brokers in Pakistan would establish branch networks abroad He was disappointed that while the number of brokers in Pakistan exceeded those in other countries they had few branch networks abroad He also noted that only a national could be a member of a stock exchange however by establishing a company in Pakistan a firm can get a seat in the stock exchange Once a member of the stock exchange there is no difference in treatment between a local and a foreign entity He encouraged the participants to visit the SECPrsquos website for relevant information presented in a user-friendly way
Tahira Raza (National Bank of Pakistan ndash NBP) shared her views on the role of the regulatory authority and the operations of the banks She observed that although the SBP had come up with market-based and liberalized policies the banks felt the environment was still not conducive to
International Trade Centre Page 5
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Contents
Abbreviations i i i
Introduction 1
Summary of workshop presentations and discussions 3
Introductory and scene setting session 3
Panel sessions ndash Sectoral challenges and opportunities5
Financial Services panel (Banking and Securities) 5 Educational Services panel 7 Professional Services panel (Management Consultancy Legal and Accounting) 9 Construction and Related Engineering Services panel 15 Energy and Environmental Services panel 19 Transport Services panel 22
Concluding Session 23
Report by Rapporteur Priorities for Service Export Roadmap 23 Pakistan service export needs amp priorities Discussion 26
Annex 1 - Workshop Programme 28
Annex 2 ndash List of Participants 34
Page i
Page ii
Abbreviations
ADB Asian Development Bank AEDB Alternate Energy Development Board BPO Business Process Outsourcing CAR Central Asian Republic CBR Central Board of Revenue EC European Commission ECO Economic Cooperation Organization ENT Economic Needs Test EPB Export Promotion Bureau ERP Enterprise Resource Planning EU European Union EXIM Export-Import FPCCI Federation of Pakistan Chambers of Commerce and Industry GATS General Agreement on Trade in Services HEC Higher Education Commission IAS International Accounting Standards IBA Institute of Business Administration IBRD International Bank for Reconstruction and Development ICAP Institute of Chartered Accountants of Pakistan ICMAP Institute of Cost and Management Accountants of Pakistan IFRS International Financial Reporting Standards IIN Industrial Information Network ISA International Standards of Auditing ITC International Trade Centre UNCTADWTO LUMS Lahore University of Management Sciences MOC Ministry of Commerce NBP National Bank of Pakistan NEPRA National Electric Power Regulatory Authority NESPAK National Engineering Services Pakistan (Pvt) Ltd NTTFC National Trade and Transport Facilitation Committee PCATP Pakistan Council of Architecture and Town Planning PEC Pakistan Engineering Council SBP State Bank of Pakistan SCR Services Capacity Report SECP Securities and Exchange Commission of Pakistan SME Small and Medium Enterprise SMEDA Small and Medium Enterprises Development Authority SWOT Strengths Weaknesses Opportunities Threats TEVTA Technical Education and Vocational Training Authority TRTA Trade Related Technical Assistance TUSDEC Technical Up gradation and Skills Development Company WAPDA Water and Power Development Authority WTO World Trade Organization
Page iii
Page iv
Introduction
A National Services Workshop was held by the International Trade Centre UNCTADWTO (ITC) under its European Union-funded Trade Related Technical Assistance Programme (TRTA) in conjunction with the Institute of Business Administration (IBA) in Karachi on 26 and 27 May 2006 This workshop brought together public officials from the Ministry of Commerce (MOC) and the regulatory authorities that govern service industries as well as private sector representatives of service associations and service firms to discuss the enhancement of service firm competitiveness the services export potential of Pakistan as well as services issues at play in negotiations under the General Agreement on Trade in Services (GATS) in the World Trade Organisation (WTO)
The workshop was designed to deepen the understanding of the commercial and economic implications of services negotiations and the emerging multilateral trading system It allowed public and private sector decision-makers to anticipate changes that additional services commitments would require and to position themselves within the multilateral trading environment It was primarily aimed at equipping business leaders to play a more meaningful advocacy role with the government with a view to improving the environment for service providers through specific commitments in the GATS The workshop was also designed to provide input to develop and refine the services export roadmap for Pakistan
The workshop allowed relevant regulatory authorities and private sector representatives to discuss the scope of the current regulatory framework including restrictions and limitations on foreign investment and the direction of regulatory evolution They considered the contours of the home market for service industries including its strengths and weaknesses new product developments service supply limitations and the countries that domestic firms target for export of services This helped the Government to determine whether the existing institutional and legislative framework would support further commitments in the GATS as a reflection of requests from Pakistanrsquos trading partners
The workshop inter alia provided
1 A better understanding of the key issues in trade in services
2 A clear identification of trade constraints and impediments in specific service sectors
3 Identification of means to overcome trade obstacles to gain market access for export of services
4 A precise recognition of the range of issues pertinent to services regulatory policies as they relate to service exports and WTO negotiations
5 A list of priorities as a reflection of sectoral interests
The workshop covered financial services including banking and securities education professional services including management consultancy legal and accountancy services construction and related engineering services environmental and energy services and transport services
International Trade Centre Page 1
Structure of the workshop
The two-day workshop was structured with an introductory and scene setting component followed by panel sessions and a concluding session with specific reference to service export needs and priorities The most significant feature of the workshop was the dialogue between public and private sector representatives from relevant services sectors The government and service regulatory authorities presented priority issues and representatives from respective services associations and firms responded All then participated in an extensive question and answer period The various methods of interaction provided an environment conducive for learning questioning and exchanging of ideas Approximately 67 people attended the workshop five of whom were women The agenda of the workshop is included as Annex 1 to this report A summary of the sessions is provided below
Page 2 International Trade Centre
Summary of workshop presentations and discussions
Friday 26 May 2006
Introductory and scene setting session
Opening ceremony
Arif Ahmed Khan (National Programme Coordinator of ITC) welcomed the participants of the workshop and invited Eric Alvarez Gurza (ITCrsquos Director of the Office for Asia-Pacific Latin America and the Caribbean) to open the conference Mr Alvarez described the mission of the European Commission Trade Related Technical Assistance (EC TRTA) programme and its work in assisting Pakistan in trade related matters He recognized the support of the Ministry of Commerce (MOC) in carrying out this mission He outlined the objectives and expectations from the workshop and highlighted the importance of trade in services for Pakistan He described how Mexico had exploited its trade in services potential resulting in economic growth and wished that Pakistan by following the right course of action might benefit as well
Qasim Niaz (MOC) defined the purpose of the event and the role that trade in services can play in the economic growth of Pakistan He emphasized the significance of foreign investment in services and underlined the need for a balanced approach to trade policy to ensure the benefits of trade liberalization while securing growth of the domestic services industry of Pakistan
WTO Services negotiat ions Present state of play
Shaista Sohail (Permanent Mission of Pakistan to the WTO in Geneva) gave the first presentation of the workshop with a comprehensive background of the GATS Agreement She began with Pakistanrsquos geo-economic situation leading to an introduction to GATS from stakeholdersrsquo perspective Ms Sohail explained the legalities of the GATS Agreement including its core provisional objectives of increasing trade in services Explanations were given on the ldquobottom-uprdquo approach of the agreement the technicalities of the Schedule of Commitments what service sectors are included the different modes of supply and the different obligations (as well as their exceptions) that WTO Members can take under the Agreement She also gave an overview of the state of play of the GATS negotiations in Geneva On the market access portion of negotiations the main points included the need for greater capacity by Pakistan in formulating requests and offers An update was given of the discussions on domestic regulation and rules negotiations on emergency safeguard measures government procurement and subsidies Ms Sohail also briefly touched on other horizontal issues such as the outcome of the adopted modalities for autonomous liberalisation
Pakistan Services Capacity Report Key f indings
Arif Ahmed Khan (ITC) presented the key findings of the ITCrsquos Pakistan Services Capacity Report (SCR) The SCR was prepared in 2005 based on a survey of five services sectors of Pakistan including information technology services financial services construction and architectural services professional services and health services The objective of this study was to help Pakistan identify services trade constraints Some of the key findings of the SCR can be found in Box 1
International Trade Centre Page 3
Box 1 Key findings of Pakistan Services Capacity Report bull Absence of the right statistics in Pakistan relating to trade in services
bull Lack of awareness among the domestic service providers of Pakistan with regard to their contribution to the economy
bull Professional services such as legal and accounting have been found to be promising sectors
bull Insurance sector is behind in international presence as compared to other financial services sectors
bull Communication distribution and transport services are significant in terms of scale of services traded but limited mostly to Mode 2
bull Private sector participation needs to be encouraged in areas with Government sector presence such as transport infrastructure media health and education services
bull The regulatory framework should be strengthened with investment in human resources and infrastructure
bull Enhanced coordination with regulatory bodies of those countries that are of importance to service exporters is required to establish common standards and criteria for business
bull Awareness of GATS and its related issues has to be raised among service providers and professional associations
bull Investment in training and marketing skills of employees of service providers is needed to enable them to compete internationally
bull Lending criteria should be tailored for service exporters with minimum acceptable documentation and financial requirements to ensure sufficient export finance
Introductory session ndash Discussions
The discussions began by questioning the marketing strategy of the Government in promoting the exports of services of Pakistan The role of the President the Prime Minister and the Minister of Commerce in promoting the right image of Pakistan abroad in order to seek maximum market access was applauded
Other discussants including Dr Qais Aslam (Government College University) brought up issues related to lack of skills among the domestic service providers of Pakistan Serious concerns were raised regarding the present capability of the services sectors Many were of the view that the gap between academia and services industry needs to be bridged in order to remain competitive It was also pointed out that services associations could play a more effective role in promoting exports of services industries
A participant Mr Babar B Jhumra (Call Centre services industry) commented on the lack of English speaking skills among the applicants that apply for jobs at Call Centre in Pakistan He shared his view that there was a lot of room for Pakistan to export services through Call Centres but this could not be properly exploited due to the poor English Language training standards in the country
More of the discussion revolved around the issue of financing for services exports It was noted that as services lack a security or collateral to offer banks are reluctant to provide credit or lending which makes it difficult for the services industry to remain globally competitive
Page 4 International Trade Centre
Panel sessions ndash Sectoral challenges and opportunities
Financial Services panel (Banking and Securities)
Azhar Kureshi (State Bank of Pakistan ndash SBP) made the first presentation of this panel SBP is the regulatory authority in Pakistan for banking services Mr Kureshi explained the role of SBP as a regulator providing a level playing field for domestic and foreign banks in the context of the WTO He said banking regulations are made available in detail by the SBP Foreign banks have been present in Pakistan for the last 50 years and for the last decade there has been a substantial transformation in the banking system There are no restrictions on setting up banks in Pakistan As to capital requirements the international standards as reflected under the Basel Accords are being followed by SBP While giving details of the monetary limits imposed on banks he said that currently for entry of banks a capital of at least Rupees 2 billion was required and this was to be increased by Rupees 1 billion each year till 2009 so that the minimum capital limit becomes Rupees 6 billion by 2009 The purpose is to make the banks capital-intensive and secure and encourage smaller banks to merge together and become strong institutions
Mr Kureshi noted that as far as policy is concerned the banks their Boards of Directors and senior management in Pakistan were free to make their policies subject to prudential regulations He said that export refinance was not a subsidized or a SBP-sponsored scheme and the rate was linked to yield on government paper and was thus market based For lending in general he said that previously SBP issued instructions for lending in agricultural and industrial finance and other priority sectors but now banks are free to decide With regard to the issue of lending to the services industry he said that banks already have their modelling techniques for lending He suggested that the weakness in lending to service exporters was due to a fear of the unknown or unwillingness on the part of the domestic banks Mr Kureshi suggested that the SBP could only encourage the banks to lend to services exporters therefore an active forum such as the Pakistan Bankers Association which interacts with the SBP on a quarterly basis should consider service export lending practices as a priority matter
Imtiaz Haider (Securities and Exchange Commission of Pakistan ndash SECP) gave a presentation explaining in detail the role of SECP as a regulator of the capital market and corporate sector in Pakistan Beginning with the regulatory objectives and organizational structure he provided an overview of the current state of the stock market He explained how the transformation of the regulatory system had improved the capital market environment and ran through the reforms and achievements of the regulator He particularly emphasized the system of checks and balances of the capital market and corporate sector maintained by the SECP He also mentioned the future plans of SECP While comparing the local market with the international market he noted that the SECP was using state-of-the-art technology Integration and demutualization of stock exchanges was on the top of the agenda Enhancing monitoring and the regulatory framework for online trading was also a priority He wished that the brokers in Pakistan would establish branch networks abroad He was disappointed that while the number of brokers in Pakistan exceeded those in other countries they had few branch networks abroad He also noted that only a national could be a member of a stock exchange however by establishing a company in Pakistan a firm can get a seat in the stock exchange Once a member of the stock exchange there is no difference in treatment between a local and a foreign entity He encouraged the participants to visit the SECPrsquos website for relevant information presented in a user-friendly way
Tahira Raza (National Bank of Pakistan ndash NBP) shared her views on the role of the regulatory authority and the operations of the banks She observed that although the SBP had come up with market-based and liberalized policies the banks felt the environment was still not conducive to
International Trade Centre Page 5
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Page ii
Abbreviations
ADB Asian Development Bank AEDB Alternate Energy Development Board BPO Business Process Outsourcing CAR Central Asian Republic CBR Central Board of Revenue EC European Commission ECO Economic Cooperation Organization ENT Economic Needs Test EPB Export Promotion Bureau ERP Enterprise Resource Planning EU European Union EXIM Export-Import FPCCI Federation of Pakistan Chambers of Commerce and Industry GATS General Agreement on Trade in Services HEC Higher Education Commission IAS International Accounting Standards IBA Institute of Business Administration IBRD International Bank for Reconstruction and Development ICAP Institute of Chartered Accountants of Pakistan ICMAP Institute of Cost and Management Accountants of Pakistan IFRS International Financial Reporting Standards IIN Industrial Information Network ISA International Standards of Auditing ITC International Trade Centre UNCTADWTO LUMS Lahore University of Management Sciences MOC Ministry of Commerce NBP National Bank of Pakistan NEPRA National Electric Power Regulatory Authority NESPAK National Engineering Services Pakistan (Pvt) Ltd NTTFC National Trade and Transport Facilitation Committee PCATP Pakistan Council of Architecture and Town Planning PEC Pakistan Engineering Council SBP State Bank of Pakistan SCR Services Capacity Report SECP Securities and Exchange Commission of Pakistan SME Small and Medium Enterprise SMEDA Small and Medium Enterprises Development Authority SWOT Strengths Weaknesses Opportunities Threats TEVTA Technical Education and Vocational Training Authority TRTA Trade Related Technical Assistance TUSDEC Technical Up gradation and Skills Development Company WAPDA Water and Power Development Authority WTO World Trade Organization
Page iii
Page iv
Introduction
A National Services Workshop was held by the International Trade Centre UNCTADWTO (ITC) under its European Union-funded Trade Related Technical Assistance Programme (TRTA) in conjunction with the Institute of Business Administration (IBA) in Karachi on 26 and 27 May 2006 This workshop brought together public officials from the Ministry of Commerce (MOC) and the regulatory authorities that govern service industries as well as private sector representatives of service associations and service firms to discuss the enhancement of service firm competitiveness the services export potential of Pakistan as well as services issues at play in negotiations under the General Agreement on Trade in Services (GATS) in the World Trade Organisation (WTO)
The workshop was designed to deepen the understanding of the commercial and economic implications of services negotiations and the emerging multilateral trading system It allowed public and private sector decision-makers to anticipate changes that additional services commitments would require and to position themselves within the multilateral trading environment It was primarily aimed at equipping business leaders to play a more meaningful advocacy role with the government with a view to improving the environment for service providers through specific commitments in the GATS The workshop was also designed to provide input to develop and refine the services export roadmap for Pakistan
The workshop allowed relevant regulatory authorities and private sector representatives to discuss the scope of the current regulatory framework including restrictions and limitations on foreign investment and the direction of regulatory evolution They considered the contours of the home market for service industries including its strengths and weaknesses new product developments service supply limitations and the countries that domestic firms target for export of services This helped the Government to determine whether the existing institutional and legislative framework would support further commitments in the GATS as a reflection of requests from Pakistanrsquos trading partners
The workshop inter alia provided
1 A better understanding of the key issues in trade in services
2 A clear identification of trade constraints and impediments in specific service sectors
3 Identification of means to overcome trade obstacles to gain market access for export of services
4 A precise recognition of the range of issues pertinent to services regulatory policies as they relate to service exports and WTO negotiations
5 A list of priorities as a reflection of sectoral interests
The workshop covered financial services including banking and securities education professional services including management consultancy legal and accountancy services construction and related engineering services environmental and energy services and transport services
International Trade Centre Page 1
Structure of the workshop
The two-day workshop was structured with an introductory and scene setting component followed by panel sessions and a concluding session with specific reference to service export needs and priorities The most significant feature of the workshop was the dialogue between public and private sector representatives from relevant services sectors The government and service regulatory authorities presented priority issues and representatives from respective services associations and firms responded All then participated in an extensive question and answer period The various methods of interaction provided an environment conducive for learning questioning and exchanging of ideas Approximately 67 people attended the workshop five of whom were women The agenda of the workshop is included as Annex 1 to this report A summary of the sessions is provided below
Page 2 International Trade Centre
Summary of workshop presentations and discussions
Friday 26 May 2006
Introductory and scene setting session
Opening ceremony
Arif Ahmed Khan (National Programme Coordinator of ITC) welcomed the participants of the workshop and invited Eric Alvarez Gurza (ITCrsquos Director of the Office for Asia-Pacific Latin America and the Caribbean) to open the conference Mr Alvarez described the mission of the European Commission Trade Related Technical Assistance (EC TRTA) programme and its work in assisting Pakistan in trade related matters He recognized the support of the Ministry of Commerce (MOC) in carrying out this mission He outlined the objectives and expectations from the workshop and highlighted the importance of trade in services for Pakistan He described how Mexico had exploited its trade in services potential resulting in economic growth and wished that Pakistan by following the right course of action might benefit as well
Qasim Niaz (MOC) defined the purpose of the event and the role that trade in services can play in the economic growth of Pakistan He emphasized the significance of foreign investment in services and underlined the need for a balanced approach to trade policy to ensure the benefits of trade liberalization while securing growth of the domestic services industry of Pakistan
WTO Services negotiat ions Present state of play
Shaista Sohail (Permanent Mission of Pakistan to the WTO in Geneva) gave the first presentation of the workshop with a comprehensive background of the GATS Agreement She began with Pakistanrsquos geo-economic situation leading to an introduction to GATS from stakeholdersrsquo perspective Ms Sohail explained the legalities of the GATS Agreement including its core provisional objectives of increasing trade in services Explanations were given on the ldquobottom-uprdquo approach of the agreement the technicalities of the Schedule of Commitments what service sectors are included the different modes of supply and the different obligations (as well as their exceptions) that WTO Members can take under the Agreement She also gave an overview of the state of play of the GATS negotiations in Geneva On the market access portion of negotiations the main points included the need for greater capacity by Pakistan in formulating requests and offers An update was given of the discussions on domestic regulation and rules negotiations on emergency safeguard measures government procurement and subsidies Ms Sohail also briefly touched on other horizontal issues such as the outcome of the adopted modalities for autonomous liberalisation
Pakistan Services Capacity Report Key f indings
Arif Ahmed Khan (ITC) presented the key findings of the ITCrsquos Pakistan Services Capacity Report (SCR) The SCR was prepared in 2005 based on a survey of five services sectors of Pakistan including information technology services financial services construction and architectural services professional services and health services The objective of this study was to help Pakistan identify services trade constraints Some of the key findings of the SCR can be found in Box 1
International Trade Centre Page 3
Box 1 Key findings of Pakistan Services Capacity Report bull Absence of the right statistics in Pakistan relating to trade in services
bull Lack of awareness among the domestic service providers of Pakistan with regard to their contribution to the economy
bull Professional services such as legal and accounting have been found to be promising sectors
bull Insurance sector is behind in international presence as compared to other financial services sectors
bull Communication distribution and transport services are significant in terms of scale of services traded but limited mostly to Mode 2
bull Private sector participation needs to be encouraged in areas with Government sector presence such as transport infrastructure media health and education services
bull The regulatory framework should be strengthened with investment in human resources and infrastructure
bull Enhanced coordination with regulatory bodies of those countries that are of importance to service exporters is required to establish common standards and criteria for business
bull Awareness of GATS and its related issues has to be raised among service providers and professional associations
bull Investment in training and marketing skills of employees of service providers is needed to enable them to compete internationally
bull Lending criteria should be tailored for service exporters with minimum acceptable documentation and financial requirements to ensure sufficient export finance
Introductory session ndash Discussions
The discussions began by questioning the marketing strategy of the Government in promoting the exports of services of Pakistan The role of the President the Prime Minister and the Minister of Commerce in promoting the right image of Pakistan abroad in order to seek maximum market access was applauded
Other discussants including Dr Qais Aslam (Government College University) brought up issues related to lack of skills among the domestic service providers of Pakistan Serious concerns were raised regarding the present capability of the services sectors Many were of the view that the gap between academia and services industry needs to be bridged in order to remain competitive It was also pointed out that services associations could play a more effective role in promoting exports of services industries
A participant Mr Babar B Jhumra (Call Centre services industry) commented on the lack of English speaking skills among the applicants that apply for jobs at Call Centre in Pakistan He shared his view that there was a lot of room for Pakistan to export services through Call Centres but this could not be properly exploited due to the poor English Language training standards in the country
More of the discussion revolved around the issue of financing for services exports It was noted that as services lack a security or collateral to offer banks are reluctant to provide credit or lending which makes it difficult for the services industry to remain globally competitive
Page 4 International Trade Centre
Panel sessions ndash Sectoral challenges and opportunities
Financial Services panel (Banking and Securities)
Azhar Kureshi (State Bank of Pakistan ndash SBP) made the first presentation of this panel SBP is the regulatory authority in Pakistan for banking services Mr Kureshi explained the role of SBP as a regulator providing a level playing field for domestic and foreign banks in the context of the WTO He said banking regulations are made available in detail by the SBP Foreign banks have been present in Pakistan for the last 50 years and for the last decade there has been a substantial transformation in the banking system There are no restrictions on setting up banks in Pakistan As to capital requirements the international standards as reflected under the Basel Accords are being followed by SBP While giving details of the monetary limits imposed on banks he said that currently for entry of banks a capital of at least Rupees 2 billion was required and this was to be increased by Rupees 1 billion each year till 2009 so that the minimum capital limit becomes Rupees 6 billion by 2009 The purpose is to make the banks capital-intensive and secure and encourage smaller banks to merge together and become strong institutions
Mr Kureshi noted that as far as policy is concerned the banks their Boards of Directors and senior management in Pakistan were free to make their policies subject to prudential regulations He said that export refinance was not a subsidized or a SBP-sponsored scheme and the rate was linked to yield on government paper and was thus market based For lending in general he said that previously SBP issued instructions for lending in agricultural and industrial finance and other priority sectors but now banks are free to decide With regard to the issue of lending to the services industry he said that banks already have their modelling techniques for lending He suggested that the weakness in lending to service exporters was due to a fear of the unknown or unwillingness on the part of the domestic banks Mr Kureshi suggested that the SBP could only encourage the banks to lend to services exporters therefore an active forum such as the Pakistan Bankers Association which interacts with the SBP on a quarterly basis should consider service export lending practices as a priority matter
Imtiaz Haider (Securities and Exchange Commission of Pakistan ndash SECP) gave a presentation explaining in detail the role of SECP as a regulator of the capital market and corporate sector in Pakistan Beginning with the regulatory objectives and organizational structure he provided an overview of the current state of the stock market He explained how the transformation of the regulatory system had improved the capital market environment and ran through the reforms and achievements of the regulator He particularly emphasized the system of checks and balances of the capital market and corporate sector maintained by the SECP He also mentioned the future plans of SECP While comparing the local market with the international market he noted that the SECP was using state-of-the-art technology Integration and demutualization of stock exchanges was on the top of the agenda Enhancing monitoring and the regulatory framework for online trading was also a priority He wished that the brokers in Pakistan would establish branch networks abroad He was disappointed that while the number of brokers in Pakistan exceeded those in other countries they had few branch networks abroad He also noted that only a national could be a member of a stock exchange however by establishing a company in Pakistan a firm can get a seat in the stock exchange Once a member of the stock exchange there is no difference in treatment between a local and a foreign entity He encouraged the participants to visit the SECPrsquos website for relevant information presented in a user-friendly way
Tahira Raza (National Bank of Pakistan ndash NBP) shared her views on the role of the regulatory authority and the operations of the banks She observed that although the SBP had come up with market-based and liberalized policies the banks felt the environment was still not conducive to
International Trade Centre Page 5
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Abbreviations
ADB Asian Development Bank AEDB Alternate Energy Development Board BPO Business Process Outsourcing CAR Central Asian Republic CBR Central Board of Revenue EC European Commission ECO Economic Cooperation Organization ENT Economic Needs Test EPB Export Promotion Bureau ERP Enterprise Resource Planning EU European Union EXIM Export-Import FPCCI Federation of Pakistan Chambers of Commerce and Industry GATS General Agreement on Trade in Services HEC Higher Education Commission IAS International Accounting Standards IBA Institute of Business Administration IBRD International Bank for Reconstruction and Development ICAP Institute of Chartered Accountants of Pakistan ICMAP Institute of Cost and Management Accountants of Pakistan IFRS International Financial Reporting Standards IIN Industrial Information Network ISA International Standards of Auditing ITC International Trade Centre UNCTADWTO LUMS Lahore University of Management Sciences MOC Ministry of Commerce NBP National Bank of Pakistan NEPRA National Electric Power Regulatory Authority NESPAK National Engineering Services Pakistan (Pvt) Ltd NTTFC National Trade and Transport Facilitation Committee PCATP Pakistan Council of Architecture and Town Planning PEC Pakistan Engineering Council SBP State Bank of Pakistan SCR Services Capacity Report SECP Securities and Exchange Commission of Pakistan SME Small and Medium Enterprise SMEDA Small and Medium Enterprises Development Authority SWOT Strengths Weaknesses Opportunities Threats TEVTA Technical Education and Vocational Training Authority TRTA Trade Related Technical Assistance TUSDEC Technical Up gradation and Skills Development Company WAPDA Water and Power Development Authority WTO World Trade Organization
Page iii
Page iv
Introduction
A National Services Workshop was held by the International Trade Centre UNCTADWTO (ITC) under its European Union-funded Trade Related Technical Assistance Programme (TRTA) in conjunction with the Institute of Business Administration (IBA) in Karachi on 26 and 27 May 2006 This workshop brought together public officials from the Ministry of Commerce (MOC) and the regulatory authorities that govern service industries as well as private sector representatives of service associations and service firms to discuss the enhancement of service firm competitiveness the services export potential of Pakistan as well as services issues at play in negotiations under the General Agreement on Trade in Services (GATS) in the World Trade Organisation (WTO)
The workshop was designed to deepen the understanding of the commercial and economic implications of services negotiations and the emerging multilateral trading system It allowed public and private sector decision-makers to anticipate changes that additional services commitments would require and to position themselves within the multilateral trading environment It was primarily aimed at equipping business leaders to play a more meaningful advocacy role with the government with a view to improving the environment for service providers through specific commitments in the GATS The workshop was also designed to provide input to develop and refine the services export roadmap for Pakistan
The workshop allowed relevant regulatory authorities and private sector representatives to discuss the scope of the current regulatory framework including restrictions and limitations on foreign investment and the direction of regulatory evolution They considered the contours of the home market for service industries including its strengths and weaknesses new product developments service supply limitations and the countries that domestic firms target for export of services This helped the Government to determine whether the existing institutional and legislative framework would support further commitments in the GATS as a reflection of requests from Pakistanrsquos trading partners
The workshop inter alia provided
1 A better understanding of the key issues in trade in services
2 A clear identification of trade constraints and impediments in specific service sectors
3 Identification of means to overcome trade obstacles to gain market access for export of services
4 A precise recognition of the range of issues pertinent to services regulatory policies as they relate to service exports and WTO negotiations
5 A list of priorities as a reflection of sectoral interests
The workshop covered financial services including banking and securities education professional services including management consultancy legal and accountancy services construction and related engineering services environmental and energy services and transport services
International Trade Centre Page 1
Structure of the workshop
The two-day workshop was structured with an introductory and scene setting component followed by panel sessions and a concluding session with specific reference to service export needs and priorities The most significant feature of the workshop was the dialogue between public and private sector representatives from relevant services sectors The government and service regulatory authorities presented priority issues and representatives from respective services associations and firms responded All then participated in an extensive question and answer period The various methods of interaction provided an environment conducive for learning questioning and exchanging of ideas Approximately 67 people attended the workshop five of whom were women The agenda of the workshop is included as Annex 1 to this report A summary of the sessions is provided below
Page 2 International Trade Centre
Summary of workshop presentations and discussions
Friday 26 May 2006
Introductory and scene setting session
Opening ceremony
Arif Ahmed Khan (National Programme Coordinator of ITC) welcomed the participants of the workshop and invited Eric Alvarez Gurza (ITCrsquos Director of the Office for Asia-Pacific Latin America and the Caribbean) to open the conference Mr Alvarez described the mission of the European Commission Trade Related Technical Assistance (EC TRTA) programme and its work in assisting Pakistan in trade related matters He recognized the support of the Ministry of Commerce (MOC) in carrying out this mission He outlined the objectives and expectations from the workshop and highlighted the importance of trade in services for Pakistan He described how Mexico had exploited its trade in services potential resulting in economic growth and wished that Pakistan by following the right course of action might benefit as well
Qasim Niaz (MOC) defined the purpose of the event and the role that trade in services can play in the economic growth of Pakistan He emphasized the significance of foreign investment in services and underlined the need for a balanced approach to trade policy to ensure the benefits of trade liberalization while securing growth of the domestic services industry of Pakistan
WTO Services negotiat ions Present state of play
Shaista Sohail (Permanent Mission of Pakistan to the WTO in Geneva) gave the first presentation of the workshop with a comprehensive background of the GATS Agreement She began with Pakistanrsquos geo-economic situation leading to an introduction to GATS from stakeholdersrsquo perspective Ms Sohail explained the legalities of the GATS Agreement including its core provisional objectives of increasing trade in services Explanations were given on the ldquobottom-uprdquo approach of the agreement the technicalities of the Schedule of Commitments what service sectors are included the different modes of supply and the different obligations (as well as their exceptions) that WTO Members can take under the Agreement She also gave an overview of the state of play of the GATS negotiations in Geneva On the market access portion of negotiations the main points included the need for greater capacity by Pakistan in formulating requests and offers An update was given of the discussions on domestic regulation and rules negotiations on emergency safeguard measures government procurement and subsidies Ms Sohail also briefly touched on other horizontal issues such as the outcome of the adopted modalities for autonomous liberalisation
Pakistan Services Capacity Report Key f indings
Arif Ahmed Khan (ITC) presented the key findings of the ITCrsquos Pakistan Services Capacity Report (SCR) The SCR was prepared in 2005 based on a survey of five services sectors of Pakistan including information technology services financial services construction and architectural services professional services and health services The objective of this study was to help Pakistan identify services trade constraints Some of the key findings of the SCR can be found in Box 1
International Trade Centre Page 3
Box 1 Key findings of Pakistan Services Capacity Report bull Absence of the right statistics in Pakistan relating to trade in services
bull Lack of awareness among the domestic service providers of Pakistan with regard to their contribution to the economy
bull Professional services such as legal and accounting have been found to be promising sectors
bull Insurance sector is behind in international presence as compared to other financial services sectors
bull Communication distribution and transport services are significant in terms of scale of services traded but limited mostly to Mode 2
bull Private sector participation needs to be encouraged in areas with Government sector presence such as transport infrastructure media health and education services
bull The regulatory framework should be strengthened with investment in human resources and infrastructure
bull Enhanced coordination with regulatory bodies of those countries that are of importance to service exporters is required to establish common standards and criteria for business
bull Awareness of GATS and its related issues has to be raised among service providers and professional associations
bull Investment in training and marketing skills of employees of service providers is needed to enable them to compete internationally
bull Lending criteria should be tailored for service exporters with minimum acceptable documentation and financial requirements to ensure sufficient export finance
Introductory session ndash Discussions
The discussions began by questioning the marketing strategy of the Government in promoting the exports of services of Pakistan The role of the President the Prime Minister and the Minister of Commerce in promoting the right image of Pakistan abroad in order to seek maximum market access was applauded
Other discussants including Dr Qais Aslam (Government College University) brought up issues related to lack of skills among the domestic service providers of Pakistan Serious concerns were raised regarding the present capability of the services sectors Many were of the view that the gap between academia and services industry needs to be bridged in order to remain competitive It was also pointed out that services associations could play a more effective role in promoting exports of services industries
A participant Mr Babar B Jhumra (Call Centre services industry) commented on the lack of English speaking skills among the applicants that apply for jobs at Call Centre in Pakistan He shared his view that there was a lot of room for Pakistan to export services through Call Centres but this could not be properly exploited due to the poor English Language training standards in the country
More of the discussion revolved around the issue of financing for services exports It was noted that as services lack a security or collateral to offer banks are reluctant to provide credit or lending which makes it difficult for the services industry to remain globally competitive
Page 4 International Trade Centre
Panel sessions ndash Sectoral challenges and opportunities
Financial Services panel (Banking and Securities)
Azhar Kureshi (State Bank of Pakistan ndash SBP) made the first presentation of this panel SBP is the regulatory authority in Pakistan for banking services Mr Kureshi explained the role of SBP as a regulator providing a level playing field for domestic and foreign banks in the context of the WTO He said banking regulations are made available in detail by the SBP Foreign banks have been present in Pakistan for the last 50 years and for the last decade there has been a substantial transformation in the banking system There are no restrictions on setting up banks in Pakistan As to capital requirements the international standards as reflected under the Basel Accords are being followed by SBP While giving details of the monetary limits imposed on banks he said that currently for entry of banks a capital of at least Rupees 2 billion was required and this was to be increased by Rupees 1 billion each year till 2009 so that the minimum capital limit becomes Rupees 6 billion by 2009 The purpose is to make the banks capital-intensive and secure and encourage smaller banks to merge together and become strong institutions
Mr Kureshi noted that as far as policy is concerned the banks their Boards of Directors and senior management in Pakistan were free to make their policies subject to prudential regulations He said that export refinance was not a subsidized or a SBP-sponsored scheme and the rate was linked to yield on government paper and was thus market based For lending in general he said that previously SBP issued instructions for lending in agricultural and industrial finance and other priority sectors but now banks are free to decide With regard to the issue of lending to the services industry he said that banks already have their modelling techniques for lending He suggested that the weakness in lending to service exporters was due to a fear of the unknown or unwillingness on the part of the domestic banks Mr Kureshi suggested that the SBP could only encourage the banks to lend to services exporters therefore an active forum such as the Pakistan Bankers Association which interacts with the SBP on a quarterly basis should consider service export lending practices as a priority matter
Imtiaz Haider (Securities and Exchange Commission of Pakistan ndash SECP) gave a presentation explaining in detail the role of SECP as a regulator of the capital market and corporate sector in Pakistan Beginning with the regulatory objectives and organizational structure he provided an overview of the current state of the stock market He explained how the transformation of the regulatory system had improved the capital market environment and ran through the reforms and achievements of the regulator He particularly emphasized the system of checks and balances of the capital market and corporate sector maintained by the SECP He also mentioned the future plans of SECP While comparing the local market with the international market he noted that the SECP was using state-of-the-art technology Integration and demutualization of stock exchanges was on the top of the agenda Enhancing monitoring and the regulatory framework for online trading was also a priority He wished that the brokers in Pakistan would establish branch networks abroad He was disappointed that while the number of brokers in Pakistan exceeded those in other countries they had few branch networks abroad He also noted that only a national could be a member of a stock exchange however by establishing a company in Pakistan a firm can get a seat in the stock exchange Once a member of the stock exchange there is no difference in treatment between a local and a foreign entity He encouraged the participants to visit the SECPrsquos website for relevant information presented in a user-friendly way
Tahira Raza (National Bank of Pakistan ndash NBP) shared her views on the role of the regulatory authority and the operations of the banks She observed that although the SBP had come up with market-based and liberalized policies the banks felt the environment was still not conducive to
International Trade Centre Page 5
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Page iv
Introduction
A National Services Workshop was held by the International Trade Centre UNCTADWTO (ITC) under its European Union-funded Trade Related Technical Assistance Programme (TRTA) in conjunction with the Institute of Business Administration (IBA) in Karachi on 26 and 27 May 2006 This workshop brought together public officials from the Ministry of Commerce (MOC) and the regulatory authorities that govern service industries as well as private sector representatives of service associations and service firms to discuss the enhancement of service firm competitiveness the services export potential of Pakistan as well as services issues at play in negotiations under the General Agreement on Trade in Services (GATS) in the World Trade Organisation (WTO)
The workshop was designed to deepen the understanding of the commercial and economic implications of services negotiations and the emerging multilateral trading system It allowed public and private sector decision-makers to anticipate changes that additional services commitments would require and to position themselves within the multilateral trading environment It was primarily aimed at equipping business leaders to play a more meaningful advocacy role with the government with a view to improving the environment for service providers through specific commitments in the GATS The workshop was also designed to provide input to develop and refine the services export roadmap for Pakistan
The workshop allowed relevant regulatory authorities and private sector representatives to discuss the scope of the current regulatory framework including restrictions and limitations on foreign investment and the direction of regulatory evolution They considered the contours of the home market for service industries including its strengths and weaknesses new product developments service supply limitations and the countries that domestic firms target for export of services This helped the Government to determine whether the existing institutional and legislative framework would support further commitments in the GATS as a reflection of requests from Pakistanrsquos trading partners
The workshop inter alia provided
1 A better understanding of the key issues in trade in services
2 A clear identification of trade constraints and impediments in specific service sectors
3 Identification of means to overcome trade obstacles to gain market access for export of services
4 A precise recognition of the range of issues pertinent to services regulatory policies as they relate to service exports and WTO negotiations
5 A list of priorities as a reflection of sectoral interests
The workshop covered financial services including banking and securities education professional services including management consultancy legal and accountancy services construction and related engineering services environmental and energy services and transport services
International Trade Centre Page 1
Structure of the workshop
The two-day workshop was structured with an introductory and scene setting component followed by panel sessions and a concluding session with specific reference to service export needs and priorities The most significant feature of the workshop was the dialogue between public and private sector representatives from relevant services sectors The government and service regulatory authorities presented priority issues and representatives from respective services associations and firms responded All then participated in an extensive question and answer period The various methods of interaction provided an environment conducive for learning questioning and exchanging of ideas Approximately 67 people attended the workshop five of whom were women The agenda of the workshop is included as Annex 1 to this report A summary of the sessions is provided below
Page 2 International Trade Centre
Summary of workshop presentations and discussions
Friday 26 May 2006
Introductory and scene setting session
Opening ceremony
Arif Ahmed Khan (National Programme Coordinator of ITC) welcomed the participants of the workshop and invited Eric Alvarez Gurza (ITCrsquos Director of the Office for Asia-Pacific Latin America and the Caribbean) to open the conference Mr Alvarez described the mission of the European Commission Trade Related Technical Assistance (EC TRTA) programme and its work in assisting Pakistan in trade related matters He recognized the support of the Ministry of Commerce (MOC) in carrying out this mission He outlined the objectives and expectations from the workshop and highlighted the importance of trade in services for Pakistan He described how Mexico had exploited its trade in services potential resulting in economic growth and wished that Pakistan by following the right course of action might benefit as well
Qasim Niaz (MOC) defined the purpose of the event and the role that trade in services can play in the economic growth of Pakistan He emphasized the significance of foreign investment in services and underlined the need for a balanced approach to trade policy to ensure the benefits of trade liberalization while securing growth of the domestic services industry of Pakistan
WTO Services negotiat ions Present state of play
Shaista Sohail (Permanent Mission of Pakistan to the WTO in Geneva) gave the first presentation of the workshop with a comprehensive background of the GATS Agreement She began with Pakistanrsquos geo-economic situation leading to an introduction to GATS from stakeholdersrsquo perspective Ms Sohail explained the legalities of the GATS Agreement including its core provisional objectives of increasing trade in services Explanations were given on the ldquobottom-uprdquo approach of the agreement the technicalities of the Schedule of Commitments what service sectors are included the different modes of supply and the different obligations (as well as their exceptions) that WTO Members can take under the Agreement She also gave an overview of the state of play of the GATS negotiations in Geneva On the market access portion of negotiations the main points included the need for greater capacity by Pakistan in formulating requests and offers An update was given of the discussions on domestic regulation and rules negotiations on emergency safeguard measures government procurement and subsidies Ms Sohail also briefly touched on other horizontal issues such as the outcome of the adopted modalities for autonomous liberalisation
Pakistan Services Capacity Report Key f indings
Arif Ahmed Khan (ITC) presented the key findings of the ITCrsquos Pakistan Services Capacity Report (SCR) The SCR was prepared in 2005 based on a survey of five services sectors of Pakistan including information technology services financial services construction and architectural services professional services and health services The objective of this study was to help Pakistan identify services trade constraints Some of the key findings of the SCR can be found in Box 1
International Trade Centre Page 3
Box 1 Key findings of Pakistan Services Capacity Report bull Absence of the right statistics in Pakistan relating to trade in services
bull Lack of awareness among the domestic service providers of Pakistan with regard to their contribution to the economy
bull Professional services such as legal and accounting have been found to be promising sectors
bull Insurance sector is behind in international presence as compared to other financial services sectors
bull Communication distribution and transport services are significant in terms of scale of services traded but limited mostly to Mode 2
bull Private sector participation needs to be encouraged in areas with Government sector presence such as transport infrastructure media health and education services
bull The regulatory framework should be strengthened with investment in human resources and infrastructure
bull Enhanced coordination with regulatory bodies of those countries that are of importance to service exporters is required to establish common standards and criteria for business
bull Awareness of GATS and its related issues has to be raised among service providers and professional associations
bull Investment in training and marketing skills of employees of service providers is needed to enable them to compete internationally
bull Lending criteria should be tailored for service exporters with minimum acceptable documentation and financial requirements to ensure sufficient export finance
Introductory session ndash Discussions
The discussions began by questioning the marketing strategy of the Government in promoting the exports of services of Pakistan The role of the President the Prime Minister and the Minister of Commerce in promoting the right image of Pakistan abroad in order to seek maximum market access was applauded
Other discussants including Dr Qais Aslam (Government College University) brought up issues related to lack of skills among the domestic service providers of Pakistan Serious concerns were raised regarding the present capability of the services sectors Many were of the view that the gap between academia and services industry needs to be bridged in order to remain competitive It was also pointed out that services associations could play a more effective role in promoting exports of services industries
A participant Mr Babar B Jhumra (Call Centre services industry) commented on the lack of English speaking skills among the applicants that apply for jobs at Call Centre in Pakistan He shared his view that there was a lot of room for Pakistan to export services through Call Centres but this could not be properly exploited due to the poor English Language training standards in the country
More of the discussion revolved around the issue of financing for services exports It was noted that as services lack a security or collateral to offer banks are reluctant to provide credit or lending which makes it difficult for the services industry to remain globally competitive
Page 4 International Trade Centre
Panel sessions ndash Sectoral challenges and opportunities
Financial Services panel (Banking and Securities)
Azhar Kureshi (State Bank of Pakistan ndash SBP) made the first presentation of this panel SBP is the regulatory authority in Pakistan for banking services Mr Kureshi explained the role of SBP as a regulator providing a level playing field for domestic and foreign banks in the context of the WTO He said banking regulations are made available in detail by the SBP Foreign banks have been present in Pakistan for the last 50 years and for the last decade there has been a substantial transformation in the banking system There are no restrictions on setting up banks in Pakistan As to capital requirements the international standards as reflected under the Basel Accords are being followed by SBP While giving details of the monetary limits imposed on banks he said that currently for entry of banks a capital of at least Rupees 2 billion was required and this was to be increased by Rupees 1 billion each year till 2009 so that the minimum capital limit becomes Rupees 6 billion by 2009 The purpose is to make the banks capital-intensive and secure and encourage smaller banks to merge together and become strong institutions
Mr Kureshi noted that as far as policy is concerned the banks their Boards of Directors and senior management in Pakistan were free to make their policies subject to prudential regulations He said that export refinance was not a subsidized or a SBP-sponsored scheme and the rate was linked to yield on government paper and was thus market based For lending in general he said that previously SBP issued instructions for lending in agricultural and industrial finance and other priority sectors but now banks are free to decide With regard to the issue of lending to the services industry he said that banks already have their modelling techniques for lending He suggested that the weakness in lending to service exporters was due to a fear of the unknown or unwillingness on the part of the domestic banks Mr Kureshi suggested that the SBP could only encourage the banks to lend to services exporters therefore an active forum such as the Pakistan Bankers Association which interacts with the SBP on a quarterly basis should consider service export lending practices as a priority matter
Imtiaz Haider (Securities and Exchange Commission of Pakistan ndash SECP) gave a presentation explaining in detail the role of SECP as a regulator of the capital market and corporate sector in Pakistan Beginning with the regulatory objectives and organizational structure he provided an overview of the current state of the stock market He explained how the transformation of the regulatory system had improved the capital market environment and ran through the reforms and achievements of the regulator He particularly emphasized the system of checks and balances of the capital market and corporate sector maintained by the SECP He also mentioned the future plans of SECP While comparing the local market with the international market he noted that the SECP was using state-of-the-art technology Integration and demutualization of stock exchanges was on the top of the agenda Enhancing monitoring and the regulatory framework for online trading was also a priority He wished that the brokers in Pakistan would establish branch networks abroad He was disappointed that while the number of brokers in Pakistan exceeded those in other countries they had few branch networks abroad He also noted that only a national could be a member of a stock exchange however by establishing a company in Pakistan a firm can get a seat in the stock exchange Once a member of the stock exchange there is no difference in treatment between a local and a foreign entity He encouraged the participants to visit the SECPrsquos website for relevant information presented in a user-friendly way
Tahira Raza (National Bank of Pakistan ndash NBP) shared her views on the role of the regulatory authority and the operations of the banks She observed that although the SBP had come up with market-based and liberalized policies the banks felt the environment was still not conducive to
International Trade Centre Page 5
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Introduction
A National Services Workshop was held by the International Trade Centre UNCTADWTO (ITC) under its European Union-funded Trade Related Technical Assistance Programme (TRTA) in conjunction with the Institute of Business Administration (IBA) in Karachi on 26 and 27 May 2006 This workshop brought together public officials from the Ministry of Commerce (MOC) and the regulatory authorities that govern service industries as well as private sector representatives of service associations and service firms to discuss the enhancement of service firm competitiveness the services export potential of Pakistan as well as services issues at play in negotiations under the General Agreement on Trade in Services (GATS) in the World Trade Organisation (WTO)
The workshop was designed to deepen the understanding of the commercial and economic implications of services negotiations and the emerging multilateral trading system It allowed public and private sector decision-makers to anticipate changes that additional services commitments would require and to position themselves within the multilateral trading environment It was primarily aimed at equipping business leaders to play a more meaningful advocacy role with the government with a view to improving the environment for service providers through specific commitments in the GATS The workshop was also designed to provide input to develop and refine the services export roadmap for Pakistan
The workshop allowed relevant regulatory authorities and private sector representatives to discuss the scope of the current regulatory framework including restrictions and limitations on foreign investment and the direction of regulatory evolution They considered the contours of the home market for service industries including its strengths and weaknesses new product developments service supply limitations and the countries that domestic firms target for export of services This helped the Government to determine whether the existing institutional and legislative framework would support further commitments in the GATS as a reflection of requests from Pakistanrsquos trading partners
The workshop inter alia provided
1 A better understanding of the key issues in trade in services
2 A clear identification of trade constraints and impediments in specific service sectors
3 Identification of means to overcome trade obstacles to gain market access for export of services
4 A precise recognition of the range of issues pertinent to services regulatory policies as they relate to service exports and WTO negotiations
5 A list of priorities as a reflection of sectoral interests
The workshop covered financial services including banking and securities education professional services including management consultancy legal and accountancy services construction and related engineering services environmental and energy services and transport services
International Trade Centre Page 1
Structure of the workshop
The two-day workshop was structured with an introductory and scene setting component followed by panel sessions and a concluding session with specific reference to service export needs and priorities The most significant feature of the workshop was the dialogue between public and private sector representatives from relevant services sectors The government and service regulatory authorities presented priority issues and representatives from respective services associations and firms responded All then participated in an extensive question and answer period The various methods of interaction provided an environment conducive for learning questioning and exchanging of ideas Approximately 67 people attended the workshop five of whom were women The agenda of the workshop is included as Annex 1 to this report A summary of the sessions is provided below
Page 2 International Trade Centre
Summary of workshop presentations and discussions
Friday 26 May 2006
Introductory and scene setting session
Opening ceremony
Arif Ahmed Khan (National Programme Coordinator of ITC) welcomed the participants of the workshop and invited Eric Alvarez Gurza (ITCrsquos Director of the Office for Asia-Pacific Latin America and the Caribbean) to open the conference Mr Alvarez described the mission of the European Commission Trade Related Technical Assistance (EC TRTA) programme and its work in assisting Pakistan in trade related matters He recognized the support of the Ministry of Commerce (MOC) in carrying out this mission He outlined the objectives and expectations from the workshop and highlighted the importance of trade in services for Pakistan He described how Mexico had exploited its trade in services potential resulting in economic growth and wished that Pakistan by following the right course of action might benefit as well
Qasim Niaz (MOC) defined the purpose of the event and the role that trade in services can play in the economic growth of Pakistan He emphasized the significance of foreign investment in services and underlined the need for a balanced approach to trade policy to ensure the benefits of trade liberalization while securing growth of the domestic services industry of Pakistan
WTO Services negotiat ions Present state of play
Shaista Sohail (Permanent Mission of Pakistan to the WTO in Geneva) gave the first presentation of the workshop with a comprehensive background of the GATS Agreement She began with Pakistanrsquos geo-economic situation leading to an introduction to GATS from stakeholdersrsquo perspective Ms Sohail explained the legalities of the GATS Agreement including its core provisional objectives of increasing trade in services Explanations were given on the ldquobottom-uprdquo approach of the agreement the technicalities of the Schedule of Commitments what service sectors are included the different modes of supply and the different obligations (as well as their exceptions) that WTO Members can take under the Agreement She also gave an overview of the state of play of the GATS negotiations in Geneva On the market access portion of negotiations the main points included the need for greater capacity by Pakistan in formulating requests and offers An update was given of the discussions on domestic regulation and rules negotiations on emergency safeguard measures government procurement and subsidies Ms Sohail also briefly touched on other horizontal issues such as the outcome of the adopted modalities for autonomous liberalisation
Pakistan Services Capacity Report Key f indings
Arif Ahmed Khan (ITC) presented the key findings of the ITCrsquos Pakistan Services Capacity Report (SCR) The SCR was prepared in 2005 based on a survey of five services sectors of Pakistan including information technology services financial services construction and architectural services professional services and health services The objective of this study was to help Pakistan identify services trade constraints Some of the key findings of the SCR can be found in Box 1
International Trade Centre Page 3
Box 1 Key findings of Pakistan Services Capacity Report bull Absence of the right statistics in Pakistan relating to trade in services
bull Lack of awareness among the domestic service providers of Pakistan with regard to their contribution to the economy
bull Professional services such as legal and accounting have been found to be promising sectors
bull Insurance sector is behind in international presence as compared to other financial services sectors
bull Communication distribution and transport services are significant in terms of scale of services traded but limited mostly to Mode 2
bull Private sector participation needs to be encouraged in areas with Government sector presence such as transport infrastructure media health and education services
bull The regulatory framework should be strengthened with investment in human resources and infrastructure
bull Enhanced coordination with regulatory bodies of those countries that are of importance to service exporters is required to establish common standards and criteria for business
bull Awareness of GATS and its related issues has to be raised among service providers and professional associations
bull Investment in training and marketing skills of employees of service providers is needed to enable them to compete internationally
bull Lending criteria should be tailored for service exporters with minimum acceptable documentation and financial requirements to ensure sufficient export finance
Introductory session ndash Discussions
The discussions began by questioning the marketing strategy of the Government in promoting the exports of services of Pakistan The role of the President the Prime Minister and the Minister of Commerce in promoting the right image of Pakistan abroad in order to seek maximum market access was applauded
Other discussants including Dr Qais Aslam (Government College University) brought up issues related to lack of skills among the domestic service providers of Pakistan Serious concerns were raised regarding the present capability of the services sectors Many were of the view that the gap between academia and services industry needs to be bridged in order to remain competitive It was also pointed out that services associations could play a more effective role in promoting exports of services industries
A participant Mr Babar B Jhumra (Call Centre services industry) commented on the lack of English speaking skills among the applicants that apply for jobs at Call Centre in Pakistan He shared his view that there was a lot of room for Pakistan to export services through Call Centres but this could not be properly exploited due to the poor English Language training standards in the country
More of the discussion revolved around the issue of financing for services exports It was noted that as services lack a security or collateral to offer banks are reluctant to provide credit or lending which makes it difficult for the services industry to remain globally competitive
Page 4 International Trade Centre
Panel sessions ndash Sectoral challenges and opportunities
Financial Services panel (Banking and Securities)
Azhar Kureshi (State Bank of Pakistan ndash SBP) made the first presentation of this panel SBP is the regulatory authority in Pakistan for banking services Mr Kureshi explained the role of SBP as a regulator providing a level playing field for domestic and foreign banks in the context of the WTO He said banking regulations are made available in detail by the SBP Foreign banks have been present in Pakistan for the last 50 years and for the last decade there has been a substantial transformation in the banking system There are no restrictions on setting up banks in Pakistan As to capital requirements the international standards as reflected under the Basel Accords are being followed by SBP While giving details of the monetary limits imposed on banks he said that currently for entry of banks a capital of at least Rupees 2 billion was required and this was to be increased by Rupees 1 billion each year till 2009 so that the minimum capital limit becomes Rupees 6 billion by 2009 The purpose is to make the banks capital-intensive and secure and encourage smaller banks to merge together and become strong institutions
Mr Kureshi noted that as far as policy is concerned the banks their Boards of Directors and senior management in Pakistan were free to make their policies subject to prudential regulations He said that export refinance was not a subsidized or a SBP-sponsored scheme and the rate was linked to yield on government paper and was thus market based For lending in general he said that previously SBP issued instructions for lending in agricultural and industrial finance and other priority sectors but now banks are free to decide With regard to the issue of lending to the services industry he said that banks already have their modelling techniques for lending He suggested that the weakness in lending to service exporters was due to a fear of the unknown or unwillingness on the part of the domestic banks Mr Kureshi suggested that the SBP could only encourage the banks to lend to services exporters therefore an active forum such as the Pakistan Bankers Association which interacts with the SBP on a quarterly basis should consider service export lending practices as a priority matter
Imtiaz Haider (Securities and Exchange Commission of Pakistan ndash SECP) gave a presentation explaining in detail the role of SECP as a regulator of the capital market and corporate sector in Pakistan Beginning with the regulatory objectives and organizational structure he provided an overview of the current state of the stock market He explained how the transformation of the regulatory system had improved the capital market environment and ran through the reforms and achievements of the regulator He particularly emphasized the system of checks and balances of the capital market and corporate sector maintained by the SECP He also mentioned the future plans of SECP While comparing the local market with the international market he noted that the SECP was using state-of-the-art technology Integration and demutualization of stock exchanges was on the top of the agenda Enhancing monitoring and the regulatory framework for online trading was also a priority He wished that the brokers in Pakistan would establish branch networks abroad He was disappointed that while the number of brokers in Pakistan exceeded those in other countries they had few branch networks abroad He also noted that only a national could be a member of a stock exchange however by establishing a company in Pakistan a firm can get a seat in the stock exchange Once a member of the stock exchange there is no difference in treatment between a local and a foreign entity He encouraged the participants to visit the SECPrsquos website for relevant information presented in a user-friendly way
Tahira Raza (National Bank of Pakistan ndash NBP) shared her views on the role of the regulatory authority and the operations of the banks She observed that although the SBP had come up with market-based and liberalized policies the banks felt the environment was still not conducive to
International Trade Centre Page 5
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Structure of the workshop
The two-day workshop was structured with an introductory and scene setting component followed by panel sessions and a concluding session with specific reference to service export needs and priorities The most significant feature of the workshop was the dialogue between public and private sector representatives from relevant services sectors The government and service regulatory authorities presented priority issues and representatives from respective services associations and firms responded All then participated in an extensive question and answer period The various methods of interaction provided an environment conducive for learning questioning and exchanging of ideas Approximately 67 people attended the workshop five of whom were women The agenda of the workshop is included as Annex 1 to this report A summary of the sessions is provided below
Page 2 International Trade Centre
Summary of workshop presentations and discussions
Friday 26 May 2006
Introductory and scene setting session
Opening ceremony
Arif Ahmed Khan (National Programme Coordinator of ITC) welcomed the participants of the workshop and invited Eric Alvarez Gurza (ITCrsquos Director of the Office for Asia-Pacific Latin America and the Caribbean) to open the conference Mr Alvarez described the mission of the European Commission Trade Related Technical Assistance (EC TRTA) programme and its work in assisting Pakistan in trade related matters He recognized the support of the Ministry of Commerce (MOC) in carrying out this mission He outlined the objectives and expectations from the workshop and highlighted the importance of trade in services for Pakistan He described how Mexico had exploited its trade in services potential resulting in economic growth and wished that Pakistan by following the right course of action might benefit as well
Qasim Niaz (MOC) defined the purpose of the event and the role that trade in services can play in the economic growth of Pakistan He emphasized the significance of foreign investment in services and underlined the need for a balanced approach to trade policy to ensure the benefits of trade liberalization while securing growth of the domestic services industry of Pakistan
WTO Services negotiat ions Present state of play
Shaista Sohail (Permanent Mission of Pakistan to the WTO in Geneva) gave the first presentation of the workshop with a comprehensive background of the GATS Agreement She began with Pakistanrsquos geo-economic situation leading to an introduction to GATS from stakeholdersrsquo perspective Ms Sohail explained the legalities of the GATS Agreement including its core provisional objectives of increasing trade in services Explanations were given on the ldquobottom-uprdquo approach of the agreement the technicalities of the Schedule of Commitments what service sectors are included the different modes of supply and the different obligations (as well as their exceptions) that WTO Members can take under the Agreement She also gave an overview of the state of play of the GATS negotiations in Geneva On the market access portion of negotiations the main points included the need for greater capacity by Pakistan in formulating requests and offers An update was given of the discussions on domestic regulation and rules negotiations on emergency safeguard measures government procurement and subsidies Ms Sohail also briefly touched on other horizontal issues such as the outcome of the adopted modalities for autonomous liberalisation
Pakistan Services Capacity Report Key f indings
Arif Ahmed Khan (ITC) presented the key findings of the ITCrsquos Pakistan Services Capacity Report (SCR) The SCR was prepared in 2005 based on a survey of five services sectors of Pakistan including information technology services financial services construction and architectural services professional services and health services The objective of this study was to help Pakistan identify services trade constraints Some of the key findings of the SCR can be found in Box 1
International Trade Centre Page 3
Box 1 Key findings of Pakistan Services Capacity Report bull Absence of the right statistics in Pakistan relating to trade in services
bull Lack of awareness among the domestic service providers of Pakistan with regard to their contribution to the economy
bull Professional services such as legal and accounting have been found to be promising sectors
bull Insurance sector is behind in international presence as compared to other financial services sectors
bull Communication distribution and transport services are significant in terms of scale of services traded but limited mostly to Mode 2
bull Private sector participation needs to be encouraged in areas with Government sector presence such as transport infrastructure media health and education services
bull The regulatory framework should be strengthened with investment in human resources and infrastructure
bull Enhanced coordination with regulatory bodies of those countries that are of importance to service exporters is required to establish common standards and criteria for business
bull Awareness of GATS and its related issues has to be raised among service providers and professional associations
bull Investment in training and marketing skills of employees of service providers is needed to enable them to compete internationally
bull Lending criteria should be tailored for service exporters with minimum acceptable documentation and financial requirements to ensure sufficient export finance
Introductory session ndash Discussions
The discussions began by questioning the marketing strategy of the Government in promoting the exports of services of Pakistan The role of the President the Prime Minister and the Minister of Commerce in promoting the right image of Pakistan abroad in order to seek maximum market access was applauded
Other discussants including Dr Qais Aslam (Government College University) brought up issues related to lack of skills among the domestic service providers of Pakistan Serious concerns were raised regarding the present capability of the services sectors Many were of the view that the gap between academia and services industry needs to be bridged in order to remain competitive It was also pointed out that services associations could play a more effective role in promoting exports of services industries
A participant Mr Babar B Jhumra (Call Centre services industry) commented on the lack of English speaking skills among the applicants that apply for jobs at Call Centre in Pakistan He shared his view that there was a lot of room for Pakistan to export services through Call Centres but this could not be properly exploited due to the poor English Language training standards in the country
More of the discussion revolved around the issue of financing for services exports It was noted that as services lack a security or collateral to offer banks are reluctant to provide credit or lending which makes it difficult for the services industry to remain globally competitive
Page 4 International Trade Centre
Panel sessions ndash Sectoral challenges and opportunities
Financial Services panel (Banking and Securities)
Azhar Kureshi (State Bank of Pakistan ndash SBP) made the first presentation of this panel SBP is the regulatory authority in Pakistan for banking services Mr Kureshi explained the role of SBP as a regulator providing a level playing field for domestic and foreign banks in the context of the WTO He said banking regulations are made available in detail by the SBP Foreign banks have been present in Pakistan for the last 50 years and for the last decade there has been a substantial transformation in the banking system There are no restrictions on setting up banks in Pakistan As to capital requirements the international standards as reflected under the Basel Accords are being followed by SBP While giving details of the monetary limits imposed on banks he said that currently for entry of banks a capital of at least Rupees 2 billion was required and this was to be increased by Rupees 1 billion each year till 2009 so that the minimum capital limit becomes Rupees 6 billion by 2009 The purpose is to make the banks capital-intensive and secure and encourage smaller banks to merge together and become strong institutions
Mr Kureshi noted that as far as policy is concerned the banks their Boards of Directors and senior management in Pakistan were free to make their policies subject to prudential regulations He said that export refinance was not a subsidized or a SBP-sponsored scheme and the rate was linked to yield on government paper and was thus market based For lending in general he said that previously SBP issued instructions for lending in agricultural and industrial finance and other priority sectors but now banks are free to decide With regard to the issue of lending to the services industry he said that banks already have their modelling techniques for lending He suggested that the weakness in lending to service exporters was due to a fear of the unknown or unwillingness on the part of the domestic banks Mr Kureshi suggested that the SBP could only encourage the banks to lend to services exporters therefore an active forum such as the Pakistan Bankers Association which interacts with the SBP on a quarterly basis should consider service export lending practices as a priority matter
Imtiaz Haider (Securities and Exchange Commission of Pakistan ndash SECP) gave a presentation explaining in detail the role of SECP as a regulator of the capital market and corporate sector in Pakistan Beginning with the regulatory objectives and organizational structure he provided an overview of the current state of the stock market He explained how the transformation of the regulatory system had improved the capital market environment and ran through the reforms and achievements of the regulator He particularly emphasized the system of checks and balances of the capital market and corporate sector maintained by the SECP He also mentioned the future plans of SECP While comparing the local market with the international market he noted that the SECP was using state-of-the-art technology Integration and demutualization of stock exchanges was on the top of the agenda Enhancing monitoring and the regulatory framework for online trading was also a priority He wished that the brokers in Pakistan would establish branch networks abroad He was disappointed that while the number of brokers in Pakistan exceeded those in other countries they had few branch networks abroad He also noted that only a national could be a member of a stock exchange however by establishing a company in Pakistan a firm can get a seat in the stock exchange Once a member of the stock exchange there is no difference in treatment between a local and a foreign entity He encouraged the participants to visit the SECPrsquos website for relevant information presented in a user-friendly way
Tahira Raza (National Bank of Pakistan ndash NBP) shared her views on the role of the regulatory authority and the operations of the banks She observed that although the SBP had come up with market-based and liberalized policies the banks felt the environment was still not conducive to
International Trade Centre Page 5
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Summary of workshop presentations and discussions
Friday 26 May 2006
Introductory and scene setting session
Opening ceremony
Arif Ahmed Khan (National Programme Coordinator of ITC) welcomed the participants of the workshop and invited Eric Alvarez Gurza (ITCrsquos Director of the Office for Asia-Pacific Latin America and the Caribbean) to open the conference Mr Alvarez described the mission of the European Commission Trade Related Technical Assistance (EC TRTA) programme and its work in assisting Pakistan in trade related matters He recognized the support of the Ministry of Commerce (MOC) in carrying out this mission He outlined the objectives and expectations from the workshop and highlighted the importance of trade in services for Pakistan He described how Mexico had exploited its trade in services potential resulting in economic growth and wished that Pakistan by following the right course of action might benefit as well
Qasim Niaz (MOC) defined the purpose of the event and the role that trade in services can play in the economic growth of Pakistan He emphasized the significance of foreign investment in services and underlined the need for a balanced approach to trade policy to ensure the benefits of trade liberalization while securing growth of the domestic services industry of Pakistan
WTO Services negotiat ions Present state of play
Shaista Sohail (Permanent Mission of Pakistan to the WTO in Geneva) gave the first presentation of the workshop with a comprehensive background of the GATS Agreement She began with Pakistanrsquos geo-economic situation leading to an introduction to GATS from stakeholdersrsquo perspective Ms Sohail explained the legalities of the GATS Agreement including its core provisional objectives of increasing trade in services Explanations were given on the ldquobottom-uprdquo approach of the agreement the technicalities of the Schedule of Commitments what service sectors are included the different modes of supply and the different obligations (as well as their exceptions) that WTO Members can take under the Agreement She also gave an overview of the state of play of the GATS negotiations in Geneva On the market access portion of negotiations the main points included the need for greater capacity by Pakistan in formulating requests and offers An update was given of the discussions on domestic regulation and rules negotiations on emergency safeguard measures government procurement and subsidies Ms Sohail also briefly touched on other horizontal issues such as the outcome of the adopted modalities for autonomous liberalisation
Pakistan Services Capacity Report Key f indings
Arif Ahmed Khan (ITC) presented the key findings of the ITCrsquos Pakistan Services Capacity Report (SCR) The SCR was prepared in 2005 based on a survey of five services sectors of Pakistan including information technology services financial services construction and architectural services professional services and health services The objective of this study was to help Pakistan identify services trade constraints Some of the key findings of the SCR can be found in Box 1
International Trade Centre Page 3
Box 1 Key findings of Pakistan Services Capacity Report bull Absence of the right statistics in Pakistan relating to trade in services
bull Lack of awareness among the domestic service providers of Pakistan with regard to their contribution to the economy
bull Professional services such as legal and accounting have been found to be promising sectors
bull Insurance sector is behind in international presence as compared to other financial services sectors
bull Communication distribution and transport services are significant in terms of scale of services traded but limited mostly to Mode 2
bull Private sector participation needs to be encouraged in areas with Government sector presence such as transport infrastructure media health and education services
bull The regulatory framework should be strengthened with investment in human resources and infrastructure
bull Enhanced coordination with regulatory bodies of those countries that are of importance to service exporters is required to establish common standards and criteria for business
bull Awareness of GATS and its related issues has to be raised among service providers and professional associations
bull Investment in training and marketing skills of employees of service providers is needed to enable them to compete internationally
bull Lending criteria should be tailored for service exporters with minimum acceptable documentation and financial requirements to ensure sufficient export finance
Introductory session ndash Discussions
The discussions began by questioning the marketing strategy of the Government in promoting the exports of services of Pakistan The role of the President the Prime Minister and the Minister of Commerce in promoting the right image of Pakistan abroad in order to seek maximum market access was applauded
Other discussants including Dr Qais Aslam (Government College University) brought up issues related to lack of skills among the domestic service providers of Pakistan Serious concerns were raised regarding the present capability of the services sectors Many were of the view that the gap between academia and services industry needs to be bridged in order to remain competitive It was also pointed out that services associations could play a more effective role in promoting exports of services industries
A participant Mr Babar B Jhumra (Call Centre services industry) commented on the lack of English speaking skills among the applicants that apply for jobs at Call Centre in Pakistan He shared his view that there was a lot of room for Pakistan to export services through Call Centres but this could not be properly exploited due to the poor English Language training standards in the country
More of the discussion revolved around the issue of financing for services exports It was noted that as services lack a security or collateral to offer banks are reluctant to provide credit or lending which makes it difficult for the services industry to remain globally competitive
Page 4 International Trade Centre
Panel sessions ndash Sectoral challenges and opportunities
Financial Services panel (Banking and Securities)
Azhar Kureshi (State Bank of Pakistan ndash SBP) made the first presentation of this panel SBP is the regulatory authority in Pakistan for banking services Mr Kureshi explained the role of SBP as a regulator providing a level playing field for domestic and foreign banks in the context of the WTO He said banking regulations are made available in detail by the SBP Foreign banks have been present in Pakistan for the last 50 years and for the last decade there has been a substantial transformation in the banking system There are no restrictions on setting up banks in Pakistan As to capital requirements the international standards as reflected under the Basel Accords are being followed by SBP While giving details of the monetary limits imposed on banks he said that currently for entry of banks a capital of at least Rupees 2 billion was required and this was to be increased by Rupees 1 billion each year till 2009 so that the minimum capital limit becomes Rupees 6 billion by 2009 The purpose is to make the banks capital-intensive and secure and encourage smaller banks to merge together and become strong institutions
Mr Kureshi noted that as far as policy is concerned the banks their Boards of Directors and senior management in Pakistan were free to make their policies subject to prudential regulations He said that export refinance was not a subsidized or a SBP-sponsored scheme and the rate was linked to yield on government paper and was thus market based For lending in general he said that previously SBP issued instructions for lending in agricultural and industrial finance and other priority sectors but now banks are free to decide With regard to the issue of lending to the services industry he said that banks already have their modelling techniques for lending He suggested that the weakness in lending to service exporters was due to a fear of the unknown or unwillingness on the part of the domestic banks Mr Kureshi suggested that the SBP could only encourage the banks to lend to services exporters therefore an active forum such as the Pakistan Bankers Association which interacts with the SBP on a quarterly basis should consider service export lending practices as a priority matter
Imtiaz Haider (Securities and Exchange Commission of Pakistan ndash SECP) gave a presentation explaining in detail the role of SECP as a regulator of the capital market and corporate sector in Pakistan Beginning with the regulatory objectives and organizational structure he provided an overview of the current state of the stock market He explained how the transformation of the regulatory system had improved the capital market environment and ran through the reforms and achievements of the regulator He particularly emphasized the system of checks and balances of the capital market and corporate sector maintained by the SECP He also mentioned the future plans of SECP While comparing the local market with the international market he noted that the SECP was using state-of-the-art technology Integration and demutualization of stock exchanges was on the top of the agenda Enhancing monitoring and the regulatory framework for online trading was also a priority He wished that the brokers in Pakistan would establish branch networks abroad He was disappointed that while the number of brokers in Pakistan exceeded those in other countries they had few branch networks abroad He also noted that only a national could be a member of a stock exchange however by establishing a company in Pakistan a firm can get a seat in the stock exchange Once a member of the stock exchange there is no difference in treatment between a local and a foreign entity He encouraged the participants to visit the SECPrsquos website for relevant information presented in a user-friendly way
Tahira Raza (National Bank of Pakistan ndash NBP) shared her views on the role of the regulatory authority and the operations of the banks She observed that although the SBP had come up with market-based and liberalized policies the banks felt the environment was still not conducive to
International Trade Centre Page 5
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Box 1 Key findings of Pakistan Services Capacity Report bull Absence of the right statistics in Pakistan relating to trade in services
bull Lack of awareness among the domestic service providers of Pakistan with regard to their contribution to the economy
bull Professional services such as legal and accounting have been found to be promising sectors
bull Insurance sector is behind in international presence as compared to other financial services sectors
bull Communication distribution and transport services are significant in terms of scale of services traded but limited mostly to Mode 2
bull Private sector participation needs to be encouraged in areas with Government sector presence such as transport infrastructure media health and education services
bull The regulatory framework should be strengthened with investment in human resources and infrastructure
bull Enhanced coordination with regulatory bodies of those countries that are of importance to service exporters is required to establish common standards and criteria for business
bull Awareness of GATS and its related issues has to be raised among service providers and professional associations
bull Investment in training and marketing skills of employees of service providers is needed to enable them to compete internationally
bull Lending criteria should be tailored for service exporters with minimum acceptable documentation and financial requirements to ensure sufficient export finance
Introductory session ndash Discussions
The discussions began by questioning the marketing strategy of the Government in promoting the exports of services of Pakistan The role of the President the Prime Minister and the Minister of Commerce in promoting the right image of Pakistan abroad in order to seek maximum market access was applauded
Other discussants including Dr Qais Aslam (Government College University) brought up issues related to lack of skills among the domestic service providers of Pakistan Serious concerns were raised regarding the present capability of the services sectors Many were of the view that the gap between academia and services industry needs to be bridged in order to remain competitive It was also pointed out that services associations could play a more effective role in promoting exports of services industries
A participant Mr Babar B Jhumra (Call Centre services industry) commented on the lack of English speaking skills among the applicants that apply for jobs at Call Centre in Pakistan He shared his view that there was a lot of room for Pakistan to export services through Call Centres but this could not be properly exploited due to the poor English Language training standards in the country
More of the discussion revolved around the issue of financing for services exports It was noted that as services lack a security or collateral to offer banks are reluctant to provide credit or lending which makes it difficult for the services industry to remain globally competitive
Page 4 International Trade Centre
Panel sessions ndash Sectoral challenges and opportunities
Financial Services panel (Banking and Securities)
Azhar Kureshi (State Bank of Pakistan ndash SBP) made the first presentation of this panel SBP is the regulatory authority in Pakistan for banking services Mr Kureshi explained the role of SBP as a regulator providing a level playing field for domestic and foreign banks in the context of the WTO He said banking regulations are made available in detail by the SBP Foreign banks have been present in Pakistan for the last 50 years and for the last decade there has been a substantial transformation in the banking system There are no restrictions on setting up banks in Pakistan As to capital requirements the international standards as reflected under the Basel Accords are being followed by SBP While giving details of the monetary limits imposed on banks he said that currently for entry of banks a capital of at least Rupees 2 billion was required and this was to be increased by Rupees 1 billion each year till 2009 so that the minimum capital limit becomes Rupees 6 billion by 2009 The purpose is to make the banks capital-intensive and secure and encourage smaller banks to merge together and become strong institutions
Mr Kureshi noted that as far as policy is concerned the banks their Boards of Directors and senior management in Pakistan were free to make their policies subject to prudential regulations He said that export refinance was not a subsidized or a SBP-sponsored scheme and the rate was linked to yield on government paper and was thus market based For lending in general he said that previously SBP issued instructions for lending in agricultural and industrial finance and other priority sectors but now banks are free to decide With regard to the issue of lending to the services industry he said that banks already have their modelling techniques for lending He suggested that the weakness in lending to service exporters was due to a fear of the unknown or unwillingness on the part of the domestic banks Mr Kureshi suggested that the SBP could only encourage the banks to lend to services exporters therefore an active forum such as the Pakistan Bankers Association which interacts with the SBP on a quarterly basis should consider service export lending practices as a priority matter
Imtiaz Haider (Securities and Exchange Commission of Pakistan ndash SECP) gave a presentation explaining in detail the role of SECP as a regulator of the capital market and corporate sector in Pakistan Beginning with the regulatory objectives and organizational structure he provided an overview of the current state of the stock market He explained how the transformation of the regulatory system had improved the capital market environment and ran through the reforms and achievements of the regulator He particularly emphasized the system of checks and balances of the capital market and corporate sector maintained by the SECP He also mentioned the future plans of SECP While comparing the local market with the international market he noted that the SECP was using state-of-the-art technology Integration and demutualization of stock exchanges was on the top of the agenda Enhancing monitoring and the regulatory framework for online trading was also a priority He wished that the brokers in Pakistan would establish branch networks abroad He was disappointed that while the number of brokers in Pakistan exceeded those in other countries they had few branch networks abroad He also noted that only a national could be a member of a stock exchange however by establishing a company in Pakistan a firm can get a seat in the stock exchange Once a member of the stock exchange there is no difference in treatment between a local and a foreign entity He encouraged the participants to visit the SECPrsquos website for relevant information presented in a user-friendly way
Tahira Raza (National Bank of Pakistan ndash NBP) shared her views on the role of the regulatory authority and the operations of the banks She observed that although the SBP had come up with market-based and liberalized policies the banks felt the environment was still not conducive to
International Trade Centre Page 5
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Panel sessions ndash Sectoral challenges and opportunities
Financial Services panel (Banking and Securities)
Azhar Kureshi (State Bank of Pakistan ndash SBP) made the first presentation of this panel SBP is the regulatory authority in Pakistan for banking services Mr Kureshi explained the role of SBP as a regulator providing a level playing field for domestic and foreign banks in the context of the WTO He said banking regulations are made available in detail by the SBP Foreign banks have been present in Pakistan for the last 50 years and for the last decade there has been a substantial transformation in the banking system There are no restrictions on setting up banks in Pakistan As to capital requirements the international standards as reflected under the Basel Accords are being followed by SBP While giving details of the monetary limits imposed on banks he said that currently for entry of banks a capital of at least Rupees 2 billion was required and this was to be increased by Rupees 1 billion each year till 2009 so that the minimum capital limit becomes Rupees 6 billion by 2009 The purpose is to make the banks capital-intensive and secure and encourage smaller banks to merge together and become strong institutions
Mr Kureshi noted that as far as policy is concerned the banks their Boards of Directors and senior management in Pakistan were free to make their policies subject to prudential regulations He said that export refinance was not a subsidized or a SBP-sponsored scheme and the rate was linked to yield on government paper and was thus market based For lending in general he said that previously SBP issued instructions for lending in agricultural and industrial finance and other priority sectors but now banks are free to decide With regard to the issue of lending to the services industry he said that banks already have their modelling techniques for lending He suggested that the weakness in lending to service exporters was due to a fear of the unknown or unwillingness on the part of the domestic banks Mr Kureshi suggested that the SBP could only encourage the banks to lend to services exporters therefore an active forum such as the Pakistan Bankers Association which interacts with the SBP on a quarterly basis should consider service export lending practices as a priority matter
Imtiaz Haider (Securities and Exchange Commission of Pakistan ndash SECP) gave a presentation explaining in detail the role of SECP as a regulator of the capital market and corporate sector in Pakistan Beginning with the regulatory objectives and organizational structure he provided an overview of the current state of the stock market He explained how the transformation of the regulatory system had improved the capital market environment and ran through the reforms and achievements of the regulator He particularly emphasized the system of checks and balances of the capital market and corporate sector maintained by the SECP He also mentioned the future plans of SECP While comparing the local market with the international market he noted that the SECP was using state-of-the-art technology Integration and demutualization of stock exchanges was on the top of the agenda Enhancing monitoring and the regulatory framework for online trading was also a priority He wished that the brokers in Pakistan would establish branch networks abroad He was disappointed that while the number of brokers in Pakistan exceeded those in other countries they had few branch networks abroad He also noted that only a national could be a member of a stock exchange however by establishing a company in Pakistan a firm can get a seat in the stock exchange Once a member of the stock exchange there is no difference in treatment between a local and a foreign entity He encouraged the participants to visit the SECPrsquos website for relevant information presented in a user-friendly way
Tahira Raza (National Bank of Pakistan ndash NBP) shared her views on the role of the regulatory authority and the operations of the banks She observed that although the SBP had come up with market-based and liberalized policies the banks felt the environment was still not conducive to
International Trade Centre Page 5
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
meeting the expectations that consumers had of the banks She also pointed out that the banks needed to have effective forward and backward linkages She felt these missing linkages were hindering banksrsquo performance especially for SMEs and the services sector She suggested components that could facilitate the banks in lending for example setting up certain standards for evaluating intellectual property hiring professionals to study and evaluate collateral and the assumption of risk by the banks She asked the SBP to help banks with forward linkages
Irfan Ahmed Khan (Faysal Bank) said that commercial banking had evolved In his opinion the SBP was quite an efficient authority Economics was the reason that banks previously didnrsquot invest in agricultural credit and consumer financing He suggested that SMEs had become a specialized field in banking The weakness lay in the legal infrastructure eg in the countryrsquos courts Disclosure was becoming an important aspect of banking With regard to lending he cited the example that in India the largest long-term capital provider for companies was fixed paper securities Firms donrsquot go to banks to raise money the capital market issues the paper for them to raise money for their projects Pakistan could develop a similar structure On the capital side he pointed out that the SECP felt that the large playersrsquo power had been diluted However the market was being manipulated and small investors suffered Therefore efforts were required to enhance legal standards for the protection of small investors
Financial Services panel ndash Discussions
A discussant Azheruddin Khan (National Environmental Consulting Company) asked if it was possible to provide concession-based lending was it possible for the banks to provide support services while the lending rate remained the same He suggested that support services could be packaged with lending as practiced by European Banks Mr Kureshi of SBP responded that it could be done as banks are allowed to offer their own interest rates and they can maintain their own schedule of charges He pointed out that if banks are interested and want to package it together SBP could look into the matter but it had to be done across the board for a range of customers and not individually
Usman Ahmed Khan (ITC) suggested that non-financial business advisory services could be introduced in banks for lending Assistance could be provided by SMEDA or NBP or any other organization This was in view of the disconnect between the banking and non-banking institutions Mr Kureshi (SBP) responded that bigger banks could provide advisory services However he admitted that under the current models that banks follow each activity is taken from a profit centred point of view
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) enquired if there was no subsidy that could be provided by SBP and it was all market based what would be the mechanism for the provision of lending for exports Mr Kureshi (SBP) responded that under the international commitments SBP could not give direct or indirect subsidies Moreover the SBP saw no reason to indulge in this sort of activity However if the Government wants to take a stand it may do so But the request should come from the stakeholders
Prof Iqbal M Khan (Sure Institute) added that although a lot was being done the right definition of SMEs was still missing The potential of service providers could not be unleashed without financing One solution is a Credit Guarantee Bank that could provide the security to the SME to go to a commercial bank as well This concept needed to be explored in Pakistan He gave examples of Export-Import (Exim) banks in India and Malaysia He stressed that Pakistan needed an Exim bank that did developmental work and not promotional work unlike Export Promotion Bureau (EPB)
Page 6 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Prof Khan suggested that in general there was a need to expand banks beyond borders There are markets for Pakistani banks in the Central Asian Republics (CARs) Afghanistan and Iran NBP already has a branch in Afghanistan Islamic banking he believed was something that Pakistan could sell
With regard to the Exim bank Mr Kureshi (SBP) advised that the issue had been under consideration by the SBP for the last 5 years and there was no doubt a need for an Exim bank The only issue was that it needed a government capital or guarantee Ms Aisha Amjad (Small and Medium Enterprise Development Authority ndash SMEDA) commented that the Prime Minister had recently approved a new definition for SMEs She also gave an example of the practice whereby if an enterprise approached SMEDA for a particular finance SMEDA worked to secure it for them
Box 2 Financial Services panel Outline of key suggestions bull Pakistan Bankers Association in conjunction with the SBP should consider how to improve
lending practices to service exporters as a priority issue
bull Brokers in Pakistan need to be encouraged to have branch networks abroad
bull To facilitate lending to service exporters standard should be set to evaluate intellectual property professionals should be hired to study and evaluate collateral and the assumption of risk by banks
bull Pakistan should consider developing a fixed paper securities structure to strengthen investment in service exporters
bull The concept of a credit guarantee bank needs to be explored in Pakistan There is a need to establish an Exim bank that does developmental work and not promotional work unlike EPB
Educational Services panel
Dr Muhammad Ehsan Malik (University of the Punjab a public sector university) began his presentation by acknowledging that the Higher Education Commission (HEC) was doing a wonderful job as a regulatory authority for higher education He was concerned that there were very few institutes in Pakistan that had the right faculty and research capability to meet market requirements The gap between the expectations of business organizations and academic universities was widening He suggested it was time Pakistan developed a curriculum that responded to market needs with input from industry faculty and students to provide an enabling environment He was disappointed by the prevailing curriculum for higher education and called for its improvement and harmonization He advised that there was a comprehensive faculty development programme in place by the Government He noted that even premier institutes of Pakistan do not have a journal of research This research was supposed to be undertaken by the universities for the business organizations however there was very little data available to carry out the research While commenting on the issue of ldquobrain drainrdquo Dr Malik was of the opinion that incentives were needed for research-oriented people in the educational services sector to stay in Pakistan He suggested that focused brainstorming sessions should be conducted through workshops and seminars He proposed developing a consortium of universities to look into whether activities in the educational sector corresponded to market needs and how to ensure the academic foundation for the development of domestic competitiveness in services exports
International Trade Centre Page 7
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Dr Qais Aslam (Government College University) emphasized that the real problem was the resource base He invited the people from industry who relied on human resources to come forward for help otherwise they should not expect too much from the Government or academic institutions He also emphasized advances in global technological knowledge consequently students needed education for the international market and not just for local needs
Humayun Sultan Ansari (Institute of Business Administration Karachi) argued that the solution was not in privatisation of academic institutions but in their corporatization as was the case in Singapore He considered that it was only the public sector universities that could solve the problem of indigenization He appreciated the forum linking academia with the private sector He noted Pakistan had a lot of potential in the engineering services sector and expertise should be exploited
Educational Services panel ndash Discussions
The discussion opened with remarks that private sector universities like Lahore University of Management Sciences (LUMS) providing quality education should not only remain profit-oriented but also accommodate merit-based students possibly at lower fees However other participants disagreed and stressed that public sector universities are equally good and capable of providing quality education to meet international demands It was proposed that the salaries of the teachers in Pakistan should be increased if the real commitment was to be met
Prof Iqbal M Khan (Sure Institute) believed that Pakistan had potential to provide educational services in Business Management Economics Accounting Medicine and Engineering by attracting foreign students in these subjects
Arif Ahmed Khan (ITC) ended the discussion by asking the panel to consider whether Pakistan should prioritize distant learning and correspondence courses as service exports or emphasize the temporary movement of teachers
Box 3 Educational Services panel Outline of key comments and suggestions bull In relation to the connection between the market and the academia Pakistan should develop a
curriculum responsive to market needs with input from industry faculty and students to provide an enabling environment
bull On the issue of brain drain incentives should be provided for research-oriented people in the educational services sector to stay in Pakistan rather than emigrate
bull A consortium of universities should consider whether the activities undertaken by educational institutions correspond to market needs and develop an academic foundation for domestic competitiveness in services for export purposes
bull Industry that relies on human resources should come forward to support academic institutions
bull The solution is not in privatisation of academic institutions but the corporatization as is the case in Singapore It is only the public sector university that can solve the problem of indigenization
bull The salaries of the teachers in Pakistan should be increased if the real commitment is to be met
bull Pakistani Universities have potential in Business Management Economics Accounting Medicine and Engineering for providing educational services by attracting foreign students in these subjects
Page 8 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Professional Services panel (Management consultancy Legal and Accounting)
Nadeem Irshad Kiyani (Ministry of Labour) spoke on the topic of bilateral and regional arrangements for the free movement of professionals He began with the definition of ldquoprofessionalrdquo under the commitments made by Pakistan in the WTO under Mode 4 He highlighted issues of professionals moving abroad such as visa restrictions administrative delays and security matters He pointed out that the mobility in the multilateral environment was trade related and Mode 4 was often related to Mode 3 He listed requirements like registration accreditation certification and licensing for professionals while providing services abroad He explained that quota restrictions practiced by advanced countries and Economic Needs Tests (ENT) used by them to control entry through Mode 4 did not have prescribed criteria
Regarding the different approaches used in negotiating the movement of natural persons Mr Kiyani noted that the unilateral approach had sovereignty as its central point All approaches ndash including unilateral bilateral regional and multilateral ndash were dependent on the Government for implementation and enforcement The regional approach was trade-related and covered professional movements unlike bilateral approach that covered low scale workers The multilateral approach as followed in the WTO did not include permanent presence employment citizenship and residence It was the least used mode in services trade and was usually linked with Mode 3 He thought that in view of remittances a lot could be gained through Mode 4 In Pakistan the matter was under the domain of the Ministry of Interior which controls the visa and entry regime Visa on arrival had been recently approved by the Pakistan Government allowing a stay of 30 days for business people and investors from a number of countries He commented favourably on the recent establishment of a Technical Vocational Training Commission that would coordinate policymaking market requirements quality assurance and harmonization of standards and will include stakeholdersrsquo input He gave an example of a current project for the enhancement of nursesrsquo qualifications through development of a website that would inform them about opportunities licensing certification requirements educational requirements etc A Technical Up-gradation and Skills Development Company (TUSDEC) a public-private partnership had also been established under the Ministry of Industries to train manpower for local and foreign markets He concluded by asking whether bilateral or regional agreements could be a substitute in the near future for the use of Mode 4 in the multilateral approach
Prof Iqbal M Khan (Sure Institute) spoke on the export of management consultancy services As Pakistan was a knowledge-based economy he stressed upon the need to acquire knowledge and understand it He suggested that most consultancies that were exported related to management consultancies eg providing advice counselling and policy papers and devising strategies He identified regulation as the key to develop services Pakistan had a lot of event managers that were capable of exporting services
Hafiz Aftab Ahmed (Aftab Associates) spoke on marketing research consultancy He pointed out that marketing research is related to services and products As more and more multinational companies were investing in Pakistan they needed quality market research for this purpose Therefore there was a need for more Pakistani companies to enter this field and enhance the capacity for exporting market research services to multinationals
R M Saleh Azam (Rai amp Azam Advocates and Legal Consultants) gave a very comprehensive presentation on Pakistanrsquos legal services potential He began by saying that if Pakistan was serious about enhancing the potential for export of services the focus should be on educational services
International Trade Centre Page 9
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
With regard to the export potential of legal services
bull Law firms and lawyers capable of exporting legal services are invariably concentrated in three cities Karachi Lahore and Islamabad Therefore the development of export capabilities of legal service providers should be concentrated in these three cities
bull Pakistani law firms presently not exporting could be encouraged to do so through a targeted export market development programme
bull Mode 1 (Legal Outsourcing) is the mode with the greatest potential as Pakistani legal service providers could solicit work from abroad rather than wait for foreign investors to come to Pakistan (Mode 2) and then provide them with the legal services Most Pakistani law firms are exporting legal services through Mode 2 It would be a strategic mistake to rely on Mode 2 and to ignore Mode 1 where most of the potential lies Mode 1 is also cheapest since services may be provided via e-mail and over the Internet It requires the least amount of capital investment but with the greatest returns Not many Pakistani lawyerslaw firms can afford to supply through Modes 2 and 3 Only two or three Pakistani law firms are providing legal services through Mode 3
bull For foreign law firms the advantages of outsourcing legal services to Pakistan are i) lower professional fee rates ii) flexible cost options iii) variable cost plans iv) at least 50 and up to 80 cost savings v) faster turnaround time vi) English language skills vii) US and UK trained lawyers viii) more time to focus on client development ix) pay less compared to existing payout for similar work x) worry less about employment law considerations
bull The markets of greatest export earning potential are the US UK China and the Middle East China is a big and growing market Pakistani lawyers have an edge over their Chinese counterparts because of relatively better English-language skills
bull Asian countries are of growing significance Indonesia Singapore Malaysia Thailand and Vietnam are all growing markets for international legal services which present different challenges
Mr Azam identified the challenges and obstacles facing the Pakistani legal export service providers as
bull Poor education standards generally This cannot be overcome in the short-run there has to be a long-term solution The foundation has to be laid through a good primary and secondary education
bull Lack of proficiency in English Although the majority of Pakistani lawyers are able to read write and to a varying degree speak English the standard of English language skills (including grammar vocabulary and expression) required in order to provide the type of legal services demanded by foreign importers are higher and more stringent The average Pakistani lawyer lacks such language competence skills due to a weak educational system This is an area that Pakistan should concentrate on ie upgrading the English language skills of lawyers in Pakistan
Page 10 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
bull The ldquoqualification-competence disconnectrdquo Few qualified Pakistani lawyers are as good as their qualifications suggest This is because of poor education standards in Pakistani law schools and falling education standards in some foreign universitiescolleges where traditionally Pakistani law graduates go for higher education
bull Lack of capacity of lawyers and law firms Sole practitioners needed to come together to form partnerships with other lawyers Existing 2-3 partner law firms needed to merge with each other to create larger law firms Consolidation of the legal services sector is needed This can be done through regulation For example in Malaysia sole practitioners are not permitted to practice law and partnership firms must have a minimum of 10 lawyers
bull Lack of ongoing vocational training Vocational training is almost non-existent in the legal profession Bearing in mind that law is dynamic it was important to impart new skills to lawyers so that they may keep up with the latest developments in law
bull Lack of finances and credit Pakistani lawyers are on the ldquonegative listsrdquo of most financial institutions and therefore do not have access to credit This is an obstacle to growth and development There are two primary reasons for this
bull Financial institutions fear protracted litigation in case of default because lawyers are not afraid of the court process and know how to exploit loopholes in the law and
bull Since lawyers are providing services they have very little to offer in the way of collateral except their private properties which they are reluctant to offer
Possible solution Financial institutions could create a security over the foreign remittances being paid to the law firm Advance payment may be deposited in an escrow account and if the law firm fails to pay then the financial institution may be entitled to withdraw the advance This could be supplemented with a Personal Guarantee
bull Bar on advertising for lawyers and law firms Bar Councils do not permit advertising in the print or electronic media Websites however are the exception
The suggestions provided by Mr Azam for addressing the issues faced by the legal services sector of Pakistan and for enhancing its exports can be found in Box 4 below
Khozem Haider Mota (Haidermota amp Co Barristers at Law) also pointed out that the biggest problem was human resources and although there was great demand it could not be met due to a shortage of lawyers with sound legal skills He stressed the possibility of enhancing Mode 1 services provided to foreign clients by local lawyers and firms
Fawad Ahmed (A F Fergusan amp Co Chartered Accountants) spoke on the export of accountancy services He presented a Strengths Weaknesses Opportunities and Threats (SWOT) analysis of the accountancy sector (see below)
International Trade Centre Page 11
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Strengths Weaknesses
Practical Experience in International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS)
Practical Experience of International Standards of Auditing (ISA)
Quality Standards of qualified accountants Cost effective human resource availability Proficiency of professionals in English Awareness of Best Practices Good reputation in local market Detailed understanding of legal framework
and local market conditions
Limited number of professionals especially members of ICAP and ICMAP
Low education standards at Primary and Secondary level
Relatively less documented economy Legal restriction in marketing of accounting
services by member firms of professional bodies
Relatively less exposure in automated business processes in local business environment
Opportunities Threats Transition to IFRS from local accounting
frameworks in developed countries Potential of Business Process Outsourcing
due to cost effectiveness Huge demand of qualified English proficient
accountants in China due to language barrier
Sarbanes-Oxley Compliances ERP implementation services Learning of developing practices by
providing services in all four modes
Entry barriers due to extensive immigration requirements in developed countries
Undercutting by Indian Accountants especially in the Middle East
Mr Ahmed also spoke about the potential service prospects of the accountancy sector under the different modes of GATS Accounting professionals in Pakistan have the potential to export services in all four modes The potential is more pronounced in Modes 1 and 4 but it is not exploited fully in any of the modes
Mode 1 Cross-Border Supply
Business Process Outsourcing (BPO)
Depending on the nature and extent of its application BPO can lower a companyrsquos costs by 10 to 70 The elimination of inefficiencies caused by bureaucratic politics or institutional obstacles along with access to state-of-the-art technology economies of scale and labour arbitrage are among the reasons for the success of BPO in cutting expenses and capital outlays Growing recognition that Business Process Outsourcing (BPO) delivers in this respect is driving achievement of double-digit growth In Pakistan the accounting firms are already providing BPO services to various foreign companies
Statutory compliances
When the Enron and MCI scandals broke it became clear that something needed to be done to prevent financial abuses from harming the public The Sarbanes Oxley Act was signed into federal law on 30 July 2002 Its primary purpose was to protect investors by making corporate information released about accounting and finance more accurate and reliable It addressed issues like the establishment of a public company creation of an accounting oversight board auditor
Page 12 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
independence corporate responsibility and enhanced financial disclosure The subsidiaries of companies listed in USA stock exchanges were required to comply with SOA This had resulted in the generation of SOA compliance work in Pakistan for Pakistan subsidiaries of US companies The knowledge and skill set acquired during such compliance had made Pakistani accountancy services internationally marketable
Enterprise Resource Planning (ERP) Systems Implementation
Over the past few years a few Pakistani accountants had gained expertise in implementation services of two of the most renowned ERP Solutions ie Oracle Financials and SAP Such skills were highly desirable and rewarding in the international market A few firms had already established ERP implementation practice in local market and had a number of successful projects They were facing tough competition in the international market but had an edge in being cost effective These services were rendered partially in Mode 1 and Mode 2 as a substantial portion of work was to be performed at site
Mode 2 Consumption Abroad
The services offered in Mode 2 may include business advice to foreign clients such as due diligence for potential investors in Pakistan provided by local accountants In contrast to other services such as tourism health etc the contribution from consumption abroad was insignificant The enhancement in Mode 1 will have an overlapping effect on services falling under Mode 2
Mode 3 Commercial Presence
Pakistani accounting firms were yet to explore the market of commercial presence abroad There was a potential for commercial presence in the countries where local professional bodies were yet to mature Middle East was one potential market and a few members of the Institute of Chartered Accountants of Pakistan (ICAP) are already practicing in four countries However this fell short of the real potential of export of services under Mode 3
Mode 4 Movement of Natural Persons
A significant advantage that may flow out of movement of natural persons (accountants) either way was the free interplay of knowledge which should help development of the profession This would assist implementation of best practices in the accountancy profession Free movement of professionals should not be construed to imply that all regulations must be removed Regulations were necessary with regard to professional qualifications on the basis of which such services can be rendered
Professional Services panel ndash Discussions
Qasim Niaz (MOC) was concerned about qualification-competence disconnect He pointed out that foreign universities were lowering their standards in order to get more and more students According to Nadeem Irshad Kiyani (Ministry of Labour) this disconnect was between the courses being taught abroad and the reality on ground
Majid Ali Wajid (ITC Consultant) pointed out that multinationals investing in Pakistan want to protect their products from infringements through registration of trademarks copyrights or patents depending on the nature of the right There were very few intellectual property lawyers in Pakistan who could exploit this situation by exporting their services to multinationals under Mode 1 Therefore specialized training should be imparted to lawyers in the field of intellectual
International Trade Centre Page 13
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
property In fact intellectual property laws should be made a mandatory part of the curriculum for law schools There was also debate between Khwajah Mansoor (Vellani amp Vellani Advocates and Legal Consultants) and R M Saleh Azam (Rai amp Azam) about whether foreign law firms or lawyers were allowed to represent in Pakistan which ended without consensus
Box 4 Professional Services panel Outline of key comments amp suggestions
Management Consultancy Services ndash Prof Iqbal M Khan and Mr Hafiz Aftab
bull More or less all consultancies that were exported related to management consultancies eg providing advice counselling policy papers and devising strategies
bull Pakistan had a lot of event managers that were capable of exporting services
bull As more and more multinational companies were investing in Pakistan they needed quality marketing research for this purpose Therefore there was a need for more Pakistani companies to enter this field
Legal Services ndash Mr R A Saleh Azam
bull Formulation of Legal Services Export Development Strategy (LSEDS)
bull Establishment of Legal Services Export Development Organization (LSEDO) that would work in the following areas
Information Collection amp Research Improving the Export Services Environment Marketing of Legal Services from Pakistan and Exploiting Export Opportunities Build awareness of legal services export potential Encourage legal services providers to invest in legal service sectors with potential Encourage legal service providers to be export-oriented Involve the legal services sector in trade talks Identify Target Markets
bull Publication of Pakistan Legal Services Export Directory
bull Permit law firms to advertise
bull Make credit available to law firms exporting legal services
bull Consolidation of the legal services sector encourage formation of law firms
bull Allow Limited Liability Partnerships (LLPs) Box 4 (continued)
Page 14 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Box 4 Professional Services panel Outline of key comments and suggestions (continued)
Accountancy Services ndash Mr Fawad Ahmed
bull To integrate internationally an appropriate regulatory system must be in place that ensured
There was a general reciprocity of rights and non-discrimination Foreign accountantsfirms were subject to the same disciplinary jurisdiction as Pakistani
accountants
bull There were great opportunities for the future development of the accountancy profession in Pakistan and Pakistani accountancy professionals could easily move abroad for rendering accountancy services
bull The major problem that the accountancy professionals were facing for services was Mode 4 entry barriers in various countries Work permits were required to render services abroad and were difficult to obtain due to stringent visa requirements
bull Pakistani Accountants were engaged in cross border supplies of services however the potential business in BPO and ERP Implementation Services was not utilized to its optimum Capacity building and marketing were required to progress in these areas
bull The by-laws of ICAP discouraged its members from marketing their services The big firms had representation in foreign countries and were respected for the quality of services being provided in Mode 1 However these services could be marketed by consulting firms who were not registered with ICAP or ICMAP
bull Awareness of trade potential in the accountancy profession was minimal at higher secondary level Brighter students tended to opt for traditional degree courses and did not understand the growth potential of the accountancy profession Professional bodies should increase promotion of professional education in accounting at Higher Secondary level Such measures would result in increased in-take of quality students in accounting profession
bull Continuing professional development of qualified accountants needed to be in line with international trends to ensure that an internationally marketable skill set was developed and maintained
Construction and Related Engineering Services panel
Mian Moeenuddin (Ministry of Housing and Works) began with the fact that the development of a country was directly proportionate to its construction activities For this reason the Government had identified it as one of the five major drivers of growth He referred to a number of measures taken by the Government for reviving the housing and construction sector including improvement in the availability of housing finance by encouraging commercial banks to extend housing loans reduction in interest rates from 17-18 to 75-85 streamlining of the legal framework for loan recovery of financial institutions and enhancement of bank exposure to housing finance from 5 to 10 of net advances Moreover Pakistan had adequate qualified manpower and sufficient number of registered contractors and consultants to undertake projects not only in Pakistan but overseas as well Pakistanrsquos architectural and engineering firms and physical constructions firms had successfully undertaken prestigious projects in Pakistan either independently or through joint ventures with foreign firms
Recently Pakistani contractors and engineering consultants had gained invaluable experience and international exposure after completing some important projects particularly in the Middle East and Africa At least a dozen such construction companies were currently working in the Middle East Central Asian Republics and Afghanistan NESPAK (National Engineering Services Pakistan) had provided engineering services during the last 30 years to 32 countries all of whom were either Middle Eastern or least-developed countries One of the major reasons for this is that
International Trade Centre Page 15
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Pakistani contractors were generally faced with financial constraints shortage of appropriate and adequate equipment and a lack of sophisticated construction methodology to undertake mega projects even in Pakistan Extraordinary efforts were required by the Government to uplift this crucial service sector Unless the Government proactively built the construction sectors multifaceted capacity and created an environment conducive to greater mobilization by providing financial privileges and ensuring joint ventures through consortiums for undertaking mega projects the prospects for this sector would remain grim The measures suggested by Mr Moeenuddin to achieve these objectives are summarised in Box 5
Mazhar ul Islam (Pakistan Engineering Council ndash PEC) began by saying that construction and related engineering services needed to be dealt with together and could not be treated independently from one another PEC was a statutory regulatory body for the engineering profession in Pakistan including engineering education The construction sector was governed by two by-laws the consultancy by-laws and the construction by-laws These by-laws were updated periodically PEC was working closely with the WTO Wing of the MOC He highlighted six significant features of the regulatory by-laws Licensing Requirements - both domestic and foreign service providers were to be licensed under PEC Both consultancy and construction contracts required that when a foreign service provider invests in Pakistan it had to enter into a joint venture with the Pakistani counterpart which should hold at least a 30 share The purpose of the joint venture was the transfer of technology Despite this requirement foreign contractors executed most mega projects in Pakistan He pointed out that this was a non-compliance of by-laws and consequently domestic contractors were suffering
He noted an exception in the by-laws that allowed a foreign contractor or consultant to provide services in Pakistan under an agreement of technology transfer without entering into a joint venture But if any foreign firm provided services in Pakistan it had to follow the procurement guidelines prepared by the PEC He informed that NESPAK a few years back had not been allowed to open an office in the USA under Mode 3 He suggested that the negotiators discuss more and commit less in the WTO as it would be difficult to reverse once commitments have been made
Ahmed Ghazal Usmani (Pakistan Contractors Association) said there were four major issues for the construction sector First contractors were concerned with a lack of financial facilities He gave the example delegations to Qatar and UAE that had the problem of guarantees He said there was no government system to give an internationalforeign bank guarantee or mobilization advance guarantee In this regard the EPB had approached the SBP however no decision had been taken He said there were three to four Pakistani companies providing services abroad but there was no government support and they were operating on their own Moreover there was a shortage of manpower In spite of TEVTA there was no effective training programme for developing the skills of manpower and in the light of the various projects going on trained manpower was the need of the hour In addition getting a license from PEC was unduly cumbersome for contractors
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) advised that the Pakistan Contractors Association had not been involved in the services negotiations He posed a number of questions to the MOC and the participants including
bull What was the inherent difference between services trade and goods trade
bull Did Pakistan have a national services export strategy
bull Are there any targets set for export of services
Page 16 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
bull Does Pakistanrsquos trade promotion authority have the expertise to develop services export strategy He mentioned that the previous Minister of Commerce had suggested the setting up of a separate Services Council but it was never acted upon
bull Can Pakistan possibly quantify the export potential of its services industry
bull Was capacity building on the domestic front a pre-requisite of capacity building on the export front
bull Was the current import facilitation policy a hindrance in the current capacity building process
bull Did the current WTO plus access policy of the Government make the negotiation process meaningless for the industry
bull Did the private sector have any forum to move against government subsidies provided to foreign services providers
Dr Tahir Masood (Habib Rafiq (Pvt) Ltd) gave his organizations experience of not being allowed to provide services to its full capacity His company was not given a fair opportunity by the Government to work at home Among the WAPDA contracts that were recently awarded only 10 went to local contractors Despite all the by-laws under PEC the contracts were not being awarded to local companies Dr Masood said that his company was providing services in its individual capacity in the Middle East There was a need to have a company or assistance from the government to negotiate the conditions of employment wages visas for the labour force instead of this work being done by the sponsors abroad In the Middle East firms have to work with the sponsors and the sponsors take a large chunk of the profits as commission Moreover in case of a foreign contract they have to provide a mobilization advance bond bid bond and a performance bond The Government must create a fund or a system in which companiesrsquo collateral back at home can be used for the purposes of these bonds
Asad Ismail A Khan (NESPAK) said that NESPAK was created to replace foreign consultants but as time passed and new projects were initiated in Pakistan more and more foreign consultants were invited to do the projects Another major issue was consultancy fees Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down a fee structure but in some cases the Government negotiated a fee for every contract which was detrimental to service providers
Construction and Related Engineering Services panel ndash Discussions
Mirza Muhammad Ashraf (Mirza Industries Karachi) said it was not easy for local contractors to import construction machinery of their choice as the Government defines the type of machinery that may be used in a project He requested that the MOC Central Board of Revenue (CBR) and the PEC take up this matter jointly
Engr M A Jabbar (Federation of Pakistan Chambers of Commerce and Industry ndash FPCCI) requested transparency in government procurement With regard to mega projects there needed to be consultation on the portion of the contract to be given to local contractors subject to the availability of capacity Since the Government considered construction as an industry there was a need to reduce duties on the import of construction machinery
Akber Sheikh (Guarantee Engineers (Pvt) Ltd) commented that previously there was a policy decision by the Government that domestic contractors were to handle local projects and that a contract was divided into smaller contracts But this was not happening currently on the
International Trade Centre Page 17
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
justification that Pakistan is a market economy Contracts were being awarded to Chinese companies as lowest bidders and at times also as financiers The lowest bidder was chosen even if it was not performing well Moreover even when the money was coming from the Government rather than donor agencies the contract was being awarded to foreign companies
Mazhar ul Islam (PEC) said that PEC was not the Government but a regulatory authority As a regulator PEC has certain limitations Although the by-law requires a foreign contractor to supply a service where local workforce or technology was not available with local contractors this was not happening He said PEC could not take any suo moto action against violation of its by-laws only aggrieved parties such as Pakistan Contractors Association could point it out as an issue
Box 5 Construction and related engineering services panel Outline of key comments and suggestions
Mr Mian Moeenuddin
bull Ensure compliance of Pakistan Engineering Councils regulations for construction sector
bull Award mega projects not as turnkey contracts to foreign contractors but package the project into several smaller or medium sized modules so that Pakistani constructors can participate in the bid and undertake projects for which foreign expertise was not required
bull Establish a separate bank to facilitate Pakistani constructors financially
bull Reduce duty ratestaxes on import of construction machinery to the minimum possible
bull Initiate restructuring of the Professional Engineers category and enter into serious discussions with relevant international fora for addressing qualification equivalence issue
bull Create a conducive environment for contractors and engineering consultants to acquire relevant ISO-9000 certification and use of international standards
bull Initiate public-private partnership to create consortia to undertake mega projects
bull Initiate advance studies in relevant institutions for project management and quality controls including practical use of modern machinery and equipment available for the construction sector
bull Enhance the quality of human resources by Quality education at appropriate level Continued education Gainful-employment in the relevant field Accountability for professional negligence Institutionalized training Monitoring and remedial measures by the relevant statuary bodiesassociations
Mr Ahmed Ghazal Usmani
bull Develop system to give an internationalforeign bank guarantee or mobilization advance guarantee
bull Address shortage of manpower to meet present demand In spite of TEVTA there is a great need for an effective training programme
bull Streamline licensing procedure of PEC which was unduly cumbersome for contractors
bull Enforce by-laws that require use of Pakistani firms in mega projects Most mega projects were executed by foreign contractors in non-compliance of by-laws and to the detriment of domestic contractors
Box 5 (continued)
Page 18 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Box 5 Construction and related engineering services panel Outline of key comments and suggestions (continued)
Dr Tahir Masood
bull There was a need to have a company or government assistance to negotiate the conditions of employment wages visas for the labour force instead of this work being done by sponsors abroad
bull In case of a foreign contract Pakistan contractors have to give a mobilization advance bond bid bond and a performance bond Government must create a fund or a system in which the contractorsrsquo collateral back at home may be used for the purposes of these bonds
Mr Asad Ismail A Khan
bull A major issue of the architectural service providers was the consultancy fee Apart from PEC the Pakistan Council of Architecture and Town Planning (PCATP) lays down the fee structure but the Government negotiates a fee for every contract and this is detrimental to him to the in the wake of to service providers
Energy and Environmental Services panel
Muhammad Saleem Arif (Water and Power of Development Authority ndash WAPDA) began by saying that energy consumption is a direct measure of industrial strength export potential and the wealth of a nation Provision of adequate reliable secure and quality power supply was essential for the services sector to remain competitive in the global market He outlined the strategy for power sector development in Pakistan that included
bull Maximum additional capacity from indigenous resources increase hydro power capacity to about 12000 MW by 2015-16 and 32000 MW by 2030 nuclear 8800 MW and coal 20000 MW by 2030
bull Provinces to undertake PublicPrivate hydro power generation with local equipment
bull Extensive private sector participation (about 7100 MW by 2010)
bull Loss reduction by utilities by about 5 by 2010
bull Tariff to be rationalized
bull Focused energy conservation program including enactment of necessary laws
bull Regional linkages for importing power from Central Asian Countries and from Iran for Balochistan
bull Regulator National Electric Power Regulatory Authority (NEPRA) to be strengthened to enhance its effectiveness amp in protecting consumerentrepreneur interests
bull Adequate Transmission Infrastructure to be developed
bull Measures to boost local production of power equipment by local electrical engineering industry
bull Alternate Energy Development Board (AEDB) to develop renewable projects on fast track basis
bull Stagger load profiles to reduce consumption at peak hours
bull Electrification of all villages by Dec 2007
International Trade Centre Page 19
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
He also provided an overview of the infrastructure market and performance of Pakistanrsquos power sector He explained that Pakistan depends primarily on gas and partially on hydropower Most of the world is dependent on generation from coal Pakistan has one of the largest coal reserves but only 02 of it was being exploited for energy All developing countries had more industrial consumption compared to domestic consumption but in Pakistan it was otherwise He gave an overview of the reforms and restructuring going in Pakistanrsquos power sector He also provided the major functions of the main regulator NEPRA which included
bull Tariff determination amp regulation bull Granting licenses bull Promotion of competition in generation amp sale of electricity bull Maintenance of efficient amp economical system bull Protection of the interests of customers regarding price amp performance standards bull Oversee service standards operation procedures codes etc bull Oversee customer complaints amp resolution process
He informed that no power plants were under construction in Pakistan and after the next two years there would be severe shortages of power supply The Government took a decision 10 years ago that WAPDA would not invest in the public sector However the private sector was not coming forward in this regard and this has created a dilemma for the country He also explained the tariff structure of the power sector along with the subsidies that were being provided in the different sectors Some of the subsidies being provided to the domestic and agricultural sector were being picked up by the industrial sector According to him the main issues of the power sector were
bull Slow development rate of indigenous resources including hydro coal and renewable had deteriorated the overall supply position
bull Over the years the generation mix had tilted towards imported thermal which had resulted in increased electricity prices
bull Existing tariff structure subsidized some consumers at the expense of others Rationalization of the tariff was awaited
bull Inefficiencies and lack of conservation strategy
bull High losses and poor recoveries in certain regions and areas have increased the cost of the service and the tariff
bull The unbundling of WAPDA and creation of NEPRA was taking time to yield the desired benefits of power sector reforms
bull Lack of participation of local electrical engineering industry in power sector development not only for domestic market but also for exports
bull Lack of huge capital outlay which was required for the development of the power sector for sustained economic development in Pakistan
bull Lack of capacity of local banks to finance power sector projects and total dependence on international financial institutions such as IBRD ADB etc
He suggested that a comprehensive implementation plan with financing arrangements was required for the provision of an adequate reliable and quality power supply to accelerate the development of export oriented manufacturing agricultural and service sector in Pakistan
Aftab Ahmed (Aftec (Pvt) Ltd) mentioned that domestic service providers in the energy sector suffered from a shortage of information about business opportunities in other countries For
Page 20 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
example a Pakistan energy company interested in Nigeria had difficulty finding a local partner and the firm had to request Burma Shell to introduce it to a local partner Shipping equipment to Nigeria was also difficult due to bureaucratic hurdles consequently the company had to buy second hand equipment from Dubai to be sent to Nigeria He emphasized that there was a need for assistance with marketing of energy services For example the Japanese Ministry of International Trade and Industry offered support to domestic service firms by identifying countries for investment selecting companies providing funds and creating linkages with foreign firms He requested the MOC to come up with a similar strategy He suggested an option was to ldquogasifyrdquo the low quality coal present in Pakistan for energy purposes
Mohd Javaid Cheema (National Environmental Consulting (Pvt) Ltd Lahore) recommended developing Pakistanrsquos local potential first He pointed out that very few consultants were providing services in the energy conservation sector which were in high demand He also mentioned that renewable energy sources especially biogas could be exploited as sources of energy
Azheruddin Khan (National Environmental Consulting (Pvt) Ltd Lahore) said the first export of environmental services took place from Pakistan 10 years back through Mode 4 ie the temporary movement of environmental consultants to countries like Canada Australia and the Middle East Those environmental consultants who did not return to Pakistan were a big loss Large Companies like NESPAK export environmental services to countries like Middle East As a market entry strategy his company had collaborated with an international company to gain the benefits of the latterrsquos name in entering a market However the exchange required they provide 50 of their human resources in budgetary returns He suggested that large firms with a surplus of work such as NESPAK should create a network of small local companies for cooperative partnerships and delegate excess work to them instead of considering them as competitors
Mohd Pervaiz Aftab (NESPAK Consulting Engineers Lahore) said that hydropower projects were environmental friendly The Government had developed the National Environmental Policy 2005 He emphasized the capacity development elements of the policy including development of stakeholders ie institutions approved laboratories public sector training institutions etc
Energy and Environmental Services panel ndash Discussions
According to Mirza Muhammad Ashraf (Mirza Industries Karachi) the import of complete solar units was exempted from duties at the customs stage however if the components were imported individually then the practice was different In response it was a suggested that charging duties on the equipment was an effort to protect local industry In response to another question it was confirmed that environmental impact assessments and public consultations were mandatory requirements under Pakistan law including for banks considering granting loans to industry
International Trade Centre Page 21
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Box 6 Energy and Environmental Services panel Outline of key comments amp suggestions bull Pakistan has one of the largest coal reserves but only 02 are being exploited for energy
bull All the developing countries in the world have more industrial consumption as compared to the domestic consumption but in Pakistan the case is otherwise
bull WAPDA should be allowed to invest in the public sector if the private sector is not coming forward in this regard
bull Some of the subsidies being provided to the domestic and agricultural sector are being picked up by the industrial sector This practice should be brought to an end
bull There is a great need for information about energy service opportunities in foreign countries
bull Pakistan should develop a pro-active approach to strengthen energy services
Transport Services panel
Javaid Mansoor (National Trade amp Transport Facilitation Committee Karachi ndash NTTFC)
ntion on Road Traffic 1968 and
968
s Convention on the
tion on Temporary Importation of Commercial Road Vehicles 1956
tion of Frontier Control of Goods 1982
56
highlighted the opportunities for export of road transport services to Economic Cooperation Organization (ECO) countries Pakistan Iran and Turkey are the founder members of ECO In the 1990s Afghanistan and other Central Asian Republics joined to make a much larger regional block The Central Asian States were landlocked and ports in Pakistan and Iran offered the easiest access to sea for international trade and transport Transit transport to Central Asian States represented a significant opportunity for Pakistan for export of road transport services Iran had been working aggressively for development of its road and rail infrastructure for transit transport to the Central Asian States and was ahead of Pakistan Recently the Government had also started work on development of its road infrastructure to meet the requirements of transport to the Central Asian States However not much attention had been paid to provide the legal framework for transit transport in accordance with the requirements of international conventions During 1997 accession to a number of international Conventions was agreed in the Program of Action for the ECO Decade of Transport and Communications (1998-2007) Pakistan had so far ratified or acceded to only the following two conventions
bull Conve
bull Convention on Road Signs and Signals 1
At present the Government was processing accession to the CustomInternational Transport of Goods under the Cover of TIR Carnet 1975 (TIR Convention) It was expected that in due course this would be acceded to While some of conventions were not relevant to Pakistan accession to the following Conventions was necessary for implementation of the TIR Convention and smooth transit transport to Central Asian Republics (CARs) and other member states of ECO
bull Customs Conven
bull Customs Convention on Containers 1972
bull International Convention on the Harmoniza
bull Convention on Contract for the International Carriage of Goods by Road (CMR) 19
Page 22 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
It was suggested that the Government should seriously consider accession to the above-mentioned conventions for the upcoming trade policy
Concluding Session
Report by Rapporteur Priorities for Service Export Roadmap
In closing Majid Ali Wajid (ITC Consultant) summarized the significant aspects of the various sessions and organized them around export strategy He began with the draft Export Services Roadmap touched upon strategic thrust areas and priorities identified during the panel discussions and concluded with ways to continue the dialogue He discussed the increase of institutional support streamlining of the regulatory environment strengthening of the input infrastructure and providing of better information in the light of the discussions by the different services sector panels He also summed up the various service sector panel discussions and tried to focus on the key recommendations and issues He emphasized that the refining of the Roadmap in order to enhance services exports was a continuous and evolving process and was not possible without stakeholders support Key points of his presentation are outlined in Box 7
EXPANDING PAKISTANrsquoS EXPORT OF SERVICES
Increase Institutional Support
bull Strengthen Trade Associations
bull Build Services Capability in EPB
bull Increase Services Focus in other organizations
Strengthen Service Input Infrastructure
bullMatch Human Resource Supply with demand
bullImprove Financial Lending Environment
bullImprove Utility Provisions
Provide Better Informationbull Classify Service Revenue as per UN Recommendations
bull Establish Resource Centers
bull Create Greater Awareness of Service Export Potential
Streamline Regulatory Environmentbull Ease Domestic Regulatory Environment
bull Improve Public-Private Consultation Process
bull Integrate Private Sector Priorities into Multilateral Trade Negotiating Objectives
Services Export Road MapServices Export Road Map
International Trade Centre Page 23
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Box 7 Priorities for Service Export Roadmap Outline of key recommendations
General
Increase Institutional Support
bull Strengthen services associations
bull Create service coalitions
bull Build services capability in EPB
bull Increase services focus in other organizations such as SMEDA Industrial Information Network (IIN) etc IIN could also work for services apart from textiles and leather
Streamline regulatory environment
bull Ease domestic regulatory environment
bull Improve public private consultation process
bull Constitute a Services Export Taskforce at a federal level
bull Involve provincial governments and private firms in trade in services dialogue
bull Encourage all Chambers of Commerce to advocate trade in services
Integrate private sector priorities into multilateral trade negotiating objectives
bull Match human resource supply with demand
bull Consider further assistance for training institutions
Strengthen services input infrastructure
bull Improve and create vehicles for export financing bull Ensure appropriate assessment of the unique collateral of services industries bull Establish Exim Bank in Pakistan
Provide better information bull Classify service revenue as per UN recommendations bull Establish resource centres bull Create greater awareness of service export potential
Sectoral
Financial Services Sector bull SBP can create a more conducive environment for the domestic banks to facilitate lending to
service providers bull Enforcement of contracts be ensured and protracted litigation curbed bull Capital market can issue paper to augment lending by banks as was the case in India bull Establish of Exim Bank in Pakistan
Box 7 - Continued
Page 24 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
International Trade Centre Page 25
Box 7 Priorities for Service Export Roadmap Outline of key recommendations (continued)
Sectoral (continued)
Educational Services sector bull Improve and harmonize curricula by Higher Education Commission (HEC) based on market
needs bull Establish proper accreditation system bull Create a consortium of universities to examine human resource needs of service industries bull Exploit potential in engineering services
Professional services bull Enhance potential in Mode 1 services bull Autonomous organizations to improve their ability to promote exports of professional services bull Increase market access to China Middle East US and UK
Construction and Related Engineering Services sector bull Ease procedure for grant of license by PEC bull Increase and institutionalize interaction of private sector with MOC for negotiations bull Create effective means for promoting exports bull Divide mega contracts into several components
Environmental and Energy Services sector bull Exploit different sources of supply such as coal hydro or gas bull Encourage private sector to invest in the energy sector bull Encourage local banks to invest in the power sector bull Develop human resource capacity provide incentives to reduce brain drain bull Include environmental services skills in the curriculum of universities and technical institutes
General recommendations of priority sectors
bull Promote health and religious tourism bull Explore event management services potential bull Promote sports like golf and cycling bull Expand banking across borders bull Examine potential in Islamic banking accounting medicine engineering
How the dialogue is to continue
bull Keep MOC and the regulatory authorities in the loop regarding the concerns and issues of the private sector
bull Form services coalitions bull Conduct joint studies bull Share views with each other through e-mail bull Spread the word among other service providers and stakeholders and encouraging them to
participate bull Conduct workshops seminars symposia and conferences bull Maintain a list of active stakeholders
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Pakistan service export needs amp priorities Discussion
On the subject of EPB Prof Iqbal M Khan (Sure Institute) explained that a number of models were available from different countries for the promotion and development of exports In India for example the EPB is a mega authority divided into different components Moreover India also has an Engineering Development Board that takes the product to other countries arranges for the stay of the entrepreneur abroad for as long as 6 months at its expense secures the contract for the firm and ensures that the firm meets its obligations under the contract
With regard to education Prof Khan pointed out that it was education that really separated the manufacturing sector from the services sector He stressed the need for every service firm to conduct its own training He further emphasized the need for strengthening of associations The real bottleneck for services was the lack of associations and the weaknesses of the existing ones He thought that a law was needed to require associations to become export quality education advocacy and professional certification oriented and there should be penalties for inefficiency He also emphasized the importance of directories for every sector of the economy He mentioned the example of Singapore where a directory of exporters was available for each and every service
Prof Khan suggested that Pakistan needed to identify niche markets He thought Pakistan should target health and religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) He cited the example of medical services efficiently being sold by Malaysia including facilitation services such as getting visas for the patients and identifying hospitals for them Despite having the potential he thought that Pakistan was poor in marketing its hospitals and medical services
According to Mr Tanwiri (Vellani amp Vellani) whenever regulatory authorities like the SBP wished to change a regulation they should take all the stakeholders into their confidence and not just the banks
Mr Mazhar ul Islam (PEC) suggested that all stakeholders should be on the MOCrsquos mailing list for the purposes of negotiations The MOC needed to automatically contact stakeholders so that subsequently they may not have a reason to complain that they were not consulted before the negotiations
Mr Muhammad Saleem Arif (WAPDA) identified the security and image problem as the biggest issue that Pakistan faced in its export of services Mr Qasim Niaz (MOC) responded that the Government was looking seriously into this matter
Ms Shaista Sohail (Pakistan Permanent Mission) suggested that universities should begin with short programs particularly improving linguistic problems Short training courses should be arranged by the businesses themselves She explained Pakistanrsquos strategy of negotiating in stages at the WTO She also spoke on the visa issue and informed that negotiations were already going on with regard to GATS visa however countries under GATS were allowed to regulate their visa policy in a reasonable and objective way
The workshop participants concluded that in order to enhance the export of services in the current context educational standards need to be elevated and both the Government and industry needed to redefine their goals and consult each other on the relevant issues so that an effective Roadmap could be formulated
Page 26 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Box 8 Concluding Session Outline of key recommendations bull EPB being a mega authority could be divided into different components
bull Issue export directories of services sectors of the economy
bull Associations should be encouraged to orient themselves to export quality education advocacy professional certification and there should be recognition of outstanding performance
bull Identify niche markets in trade in services Pakistan can target health religious (Nankana Sahib and Taxila pilgrims) and recreational tourism (golf and cycling sports) Facilitation services can be provided such as getting visas for the patients and identifying hospitals
bull All stakeholders should be on the MOC mailing list for the purposes of negotiations They need to be automatically contacted to give their input for the negotiations
bull Universities should begin with short programs particularly improving linguistic problems
bull Services subsidies offered to consumers should be examined
bull The MOC should provide links on its website regarding information relating to services
Closing remarks
Mr Qasim Niaz (MOC) gave the closing remarks He said that events of this sort are being organized periodically with the support of MOC but he wished that the EPB would take charge of it as early as possible He also suggested that the associations should also begin conducting such events and MOC would be glad to participate in them
Mr Niaz also commented that the most important issue might not be the export of services but the enhancing of domestic competitiveness so that the net gain could be reflected in the whole economy He further reiterated that a balanced approach was required between exports and imports of services He stressed the importance of an efficient legal system in the country for purely economic reasons particularly with regard to enforcement of contracts He thought that with the efficient enforcement of contracts the country would have a more productive economy
Finally Mr Niaz thanked all the participants and organisers of the workshop for the healthy participation and useful brainstorming sessions
Annexes
The following documents are attached
1 Workshop programme
2 List of participants
International Trade Centre Page 27
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Annex 1 - Workshop Programme
Friday 26 May 2006
Introduction amp scene setting 900 ndash 915am
Welcome Mr Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre (ITC)
915 ndash 945am
Opening Remarks Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
945 ndash 1015am
State of Play in WTO Services Negotiations Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to WTO Geneva
1015 ndash 1145am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1130am
Key Findings of Pakistan Services Capacity Report Mr Arif Ahmed Khan National Programme Coordinator International Trade Centre (ITC)
1130 ndash 1200
Discussion
1200 ndash 100pm
Lunch Break
Page 28 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Managing the request-offer process Sectoral challenges amp opportunities
100 ndash 145pm
Financial Services (Banking amp Securities)
Presenters
Mr Azhar Kureshi Director Exchange Policy State Bank of Pakistan Karachi
Mr Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission Islamabad
Respondents
Ms Tahira Raza Group Chief (Risk Management) National Bank of Pakistan Karachi
Mr Irfan Ahmed Khan Head of Corporate (South) Faysal Bank Karachi
145 ndash 215pm
Discussion
215 ndash 300pm
Educational Services
Presenter
Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Lahore
Respondents
Mr Humayun Sultan Ansari Assistant Professor Institute of Business Administration (IBA) Karachi
Dr Qais Aslam Chairman Department of Economics Government College University Lahore
The session will involve presentations by the relevant government departments and regulators and brief responses by the respective service associations focusing on issues including
bull The current policy framework
bull Key regulatory trends including rules governing foreign entry and participation as well as and constraints faced
bull Trends in sectoral performancecompetitiveness
bull Opportunities to enhance exports
bull The nature of requests received in the sector and
bull The scope for economic impact and the rationale for enhancing Pakistans commitments under the GATS
International Trade Centre Page 29
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
300 ndash 330pm
Discussion
330 ndash 345pm
Coffee Tea Break
345 ndash 430pm
Professional Services
Presenters
Mr Nadeem Irshad Kiyani Director Ministry of Labour Islamabad Respondents
Mr Hafiz Aftab Ahmed Chief Executive Aftab Associates Market Research Consultants Lahore
Prof Iqbal M Khan President Sure Institute Lahore
Mr RM Saleh Azam Partner Rai amp Azam Advocates amp Legal Consultants Lahore
Mr Khozem A Haidermota Partner Haidermota amp Co Barristers at Law amp Corporate Counsellors Karachi Mr Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants Lahore
430 ndash 500pm
Discussion
Saturday 27 May 2006
Managing the request-offer process Sectoral challenges amp opportunities (continued)
Page 30 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
900 ndash 1015am
Construction amp Related Engineering Services
Presenters
Mr Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad
Respondents
Mr Mazhar ul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council Lahore
Mr Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Karachi
Mr Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd Lahore
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd Lahore
Mr Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers Karachi
1015 ndash 1045am
Discussion
1045 ndash 1100am
Coffee Tea Break
1100 ndash 1145am
Environmental amp Energy Services
Presenters
Mr Mohd Saleem Arif General Manager (Planning Power) Water and Power Development Authority (WAPDA) Lahore
Respondents
Mr Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd Lahore
Mr Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Lahore
Mr Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Lahore
Mr Mohd Pervaiz Aftab Vice President (Environment) NESPAK Consulting Engineers Lahore
1145 ndash 1215pm
Discussion
International Trade Centre Page 31
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
1215 ndash 1245pm
Transport Services
Presenter
Mr Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee Karachi
1245 ndash 100pm Discussion
100 ndash 200pm Lunch Break
Page 32 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Service export needs and priorities
Issues for discussion
bull Strengthening regulatory institutions and associations
bull Addressing domestic competitiveness problems and core service infrastructure bottlenecks
bull Strengthening the process of stakeholder consultation with the private sector NGOs and the academic community
bull Investing in policy research on services and strengthening Pakistanrsquos participation in South Asian research networks on services
200 ndash 330pm
Pakistan Service Export Needs amp Priorities
Panel members
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
Ms Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO Geneva
Prof Iqbal M Khan President Sure Institute Lahore
330 ndash 345pm
Coffee Tea Break
345 ndash 445pm
Concluding Session Report by Rapporteur Priorities for Service Export Roadmap
Mr Majid Ali Wajid ITC consultant
445 ndash 500pm
Closing Remarks
Mr Qasim Niaz Joint Secretary (WTO) Ministry of Commerce
International Trade Centre Page 33
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Annex 2 ndash List of Participants
Resource Persons International Trade Centre Eric Alvarez Gurza Chief Office for Asia-Pacific Latin America and the Caribbean Division of Technical Cooperation Coordination International Trade Centre 54-56 Rue de Montbrillant Palais des Nations 1211 Geneva 10 Switzerland Tel +41 22 730 0615 Fax +41 22 730 0811 E-mail alvarezintracenorg
Arif Ahmed Khan National Programme Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Pakistan Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-arifintracenorg Majid Ali Wajid ITC ConsultantAdvocate High Court Majid Ali Wajid amp Co Advocates and Legal Consultants 2nd Floor Ali Plaza 13 - Fane Road Lahore Pakistan Tel +92 42 7323680 Cell +92 3004100181 E-mail mawajid01cantabnet
Ministry of Commerce Qasim M Niaz Joint Secretary WTO Ministry of Commerce WTO Wing EAC Building 5-A Constitution Avenue Islamabad Tel +92 51 9202107 Fax +92 51 9213785 E-mail jswtoyahoocom
Shaista Sohail Economic Counsellor Permanent Mission of Pakistan to the WTO 37-39 Rue de Vermont Geneva Switzerland Tel +4122 7487018 Fax +4122 733 7650 Cell +41-795737489 E-mail shaistasohailwto-pakistanorg
Financial Services Sector Azhar Kureshi Director Exchange Policy Department State Bank of Pakistan Karachi Tel +92 21 92124592453966 Fax +92 21 9212527 E-mail azharkureshispborgpk Imtiaz Haider Director Securities Market Division Securities amp Exchange Commission of Pakistan Islamabad Tel +92 51 9203126 Fax +92 51 9218595 Cell +92 3009566270
Tahira Raza Group Chief (Risk Management) National Bank of Pakistan NBP Building II Chundrigar Road Karachi Tel +92 21-9212744 Fax +92 21 9212820 Irfan Ahmed Khan Senior Vice President and Corporate Head ndash South Faysal Bank Ltd Trade Centre I I Chundrigar Road P O Box 472 Karachi Tel +92 21 1117477472631252 Fax +92 21 2637982 E-mail Irfanfaysalbankcom
Page 34 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Educational Services sector Prof Dr Muhammad Ehsan Malik Director Institute of Business Administration University of the Punjab Quaid-e-Azam Campus Lahore Tel +92 42 9231257
Fax +92 42 9231259 Cell +92 3008455453 Email directoribapuedupk
Humayun Sultan Ansari Assistant Professor Institute of Business Administration University Road Karachi Tel +92 21 111-422-422 (Ext 233) Fax +92 21 9243421 E-mail humayunansari75yahoocom Dr Qais Aslam Chairman Department of Economics Government College University Katchery Road Lahore Tel +92 42 111000010 Ext 277 280 Fax +92 42 9211337 Cell +92 3334212636 E-mail drqais2000yahoocom
Professional Services sector
Nadeem Irshad Kiyani Director Workers Welfare Fund Ministry of Labour Manpower amp Overseas Pakistanis Block-16 F-6 Markaz Super Market Islamabad Tel +92 51 9208266 Fax +92 51 9221323 Hafiz Aftab Ahmed Chief Executive Aftab Associates (Pvt) Ltd Market Research Consultants 5-E1 Gulberg-III Lahore Pakistan Tel +92 42 5871131-365764971 Fax +92 42 5762483 Cell +92 3008446456 E-mail aftabaftabassociatescom Prof Iqbal M Khan President Sure Institute 2M Ashrafi Heights Main Market Gulberg II Lahore Tel +92 42 5786363 Fax +92 42 5786362 Cell +92 3214046625 E-mail iqbalsureinstitutecompk
RM Saleh Azam Partner Azam and Rai Advocates amp Legal Consultants Fane Road Lahore Tel +92 42 7211701 Fax +92 42 7211704 Cell +92 3004493814 E-mail infoazamraicom Khozem A Haidermota Partner Haidermota amp Co Barristers at Law D-79 Block 5 Clifton KDA Scheme No 5 Karachi Tel +92 21 111 5200005879097 Fax +92 21 5862329 Fawad Ahmed Manager AF Ferguson amp Co Chartered Accountants amp Auditors 506-509 Alfalah Building Shahrah-e-Quaid-e-Azam Lahore Pakistan Tel +92 42 6285078-85 Fax +92 42 6285088 Cell +92 3008467912 E-mail fawadahmadpkpwccom
Construction and Related Engineering Services sector
Mian Moeenuddin Joint Engineering Advisor Ministry of Housing amp Works Islamabad Tel +92 51 9217156 Fax +92 51 9203819 Cell +92 3335241352
Mazharul Islam Convenor Standard amp Quality Committee of Pakistan Engineering Council NESPAK Consulting Engineers 1-C Block-N Model Town Extension Lahore Tel +92 42 5209000 Fax +92 42 5160509 Cell +92 3334347655
International Trade Centre Page 35
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Ahmed Ghazal Usmani Chairman All Pakistan Contractors Association Ms Usmani Associates Engineers Architects and Contractors Karachi Tel +92 21 5653501-6
Fax +92 21 5683313 Cell +92 3008252077 Akber Sheikh Managing Director Ms Guarantee Engineers (Pvt) Ltd 3rd floor Elahi Arcade 26 - Empress Road Lahore Tel +92 42 1118647246288587-88
Fax 042-57700806288593 Cell +92 3008429262 E-mail akbervohrahcom
Dr Tahir Masood General Manager Habib Rafiq (Pvt) Ltd 6- K Block ndash H Lahore Tel +92 42 111475475 Fax +92 42 5710890 E-mail tmasoodhabibrafiqcom Asad Ismail A Khan Vice President (Architecture amp Planning) NESPAK Consulting Engineers 9th Floor PNSC Building Maulvi Tamiz-ud-din Khan Road Karachi Tel +92 21 9201425 Fax +92 21 9201424 Cell +92 3008222110
Energy and Environmental Services sector
Mohd Saleem Arif General Manager (Planning Power) National Transmission amp Dispatch Company WAPDA House Lahore Tel +92 42 9202607 Fax +92 42 9202604 E-mail saleemarifntdccompk Aftab Ahmad Chief Executive Ms Aftec (Pvt) Ltd 20 - Gulberg V Lahore Tel +92 42 57556145710010 Fax +92 42 5780137 E-mail aftec_ltdyahoocom Mohd Javaid Cheema Manager National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 3008462281 E-mail necnexlinxnetpk
Azheruddin Khan Chief Executive National Environmental Consulting (Pvt) Ltd Plot 16 Perfect SITE 21-KM Rohi Nullah Gajju Matta Ferozepur Road Lahore Tel +92 42 5274527-30 Fax +92 42 5274526 Cell +92 300-8454061 E-mail necnexlinxnetpk Mohd Pervaiz Aftab Vice President (Environment) National Engineering Services Pakistan (Pvt) Ltd Business Development Division NESPAK House 1-C Block-N Model Town Extension Lahore Tel +92 42 5163574 5209000 (Ext 642) Fax +92 42 5160509 E-mail bddnespakcompk
Transport Services sector
Javaid Mansoor Executive Secretary National Trade amp Transport Facilitation Committee B-2 Federation House Main Clifton Karachi Tel +92 21 5821814 E-mail nttfccybernetpk
Page 36 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Participants Feroze Ashraf Tabani Director Seri Sugar Mills Limited 1st Floor Hassan Ali Centre Opposite Mereweather Tower MA Jinnah Road Karachi Tel +92 21 24183892418390 E-mail tabaniferozehotmailcom Mirza Muhammad Ashraf Proprietor Mirza Industries 262 7th Commercial Street Phase-IV DHA Karachi Tel +92 21 53915535391641 Fax +92 21 5391598 Cell +92 3002428607 E-mail mirind33hotmailcom Sohail Siddiqui Chief Operating Officer Outreach Digital Suite 1513 National IT Park Shahrah-e-Faisal Karachi Aisha Amjad Assistant Manager SMEDA 6th Floor LDA Plaza Egerton Road Lahore Tel +92 42 111-111-456 Fax +92 42 630 4926-7 E-mail aishasmedaorgpk Babar B Jhumra Managing Partner NBA Computers 47-H-1 Block-6 PECHS Karachi Tel +92 21 4384005 Fax +92 21 4384006 E-mail jhumranbacompk Dr Ludmila Rehmani Manager Marketing Services Efroze Chemical Industry (Pvt) Ltd 12-C Block-6 PECHS Shahrah e Faisal Karachi Tel +92 21 111337337 E-mail ludmilaefrozecom
Javed Safdar Tanwiri Advocate High Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail javedtanwirivellanicom Engr MA Jabbar Chief Executive Qaim Automotive Manufacturing (Pvt) Ltd 230-206 Prince Centre Preedy Street Saddar Karachi Tel +92 21 273 3000 Fax +92 21 2720419 Cell +92 300-8236782 E-mail infoqaimfilterscompk Waheed Alam Deputy Secretary NTTFC Secretariat Federation House Main Clifton Karachi Tel +92 21 5822871-72 Fax +92 21 5821814 E-mail waheedalamnttfcorg Khawaja Mansoor Advocate Supreme Court Vellani amp Vellani Advocates 148 18th East Street Phase-I Defence Officersrsquo Housing Authority Karachi Tel +92 21 5801000 Fax +92 21 5802120 E-mail khawajamansoorvellanicom Usman Ahmed Khan Asst Program Coordinator TRTA-ITC Programme Office House 2 Street 59 F-84 Islamabad Tel +92 51 285 6373 Fax +92 51 2856242 E-mail khan-usmanintracenorg
International Trade Centre Page 37
Page 40 International Trade Centre
Page 40 International Trade Centre