Value Chain Jan 13

Continuous Power atYour fingertips.

www.smjafferco.com

Complete Backup And Maintenance Facilities

Managed by Qualified Professional Engineers

having 50 Years of Dedicated Experience.

Complete Installation & Commissioning Facility

with Auto Starts/Stop & Auto Load Transfer System.

Spare Parts Availabilty

Gerneral Leasing/Rental Facility

Sound Proof Canopy Options.

Round the Clock After Sale Services Availability

Trusted Name Since 1949

S. M. JAFFER & CO.MECHANICAL & ELECTRICAL ENGINEERSFor sale, service & spare parts, please contact:

Head Office Karachi:Jaffer House 17, Timber Pond, Keamari,P.O.Box No. 4488, Karachi-75620Fax: (+92-21) 3285-1162, 3285-0086Email: [email protected], [email protected]

Lahore Branch Office:Plot No. Q-29CGulberg II, Lahore.Fax: (+92-42) 3571-5021Email: [email protected]

Karachi - Lahore - Islamabad: 111 - 765 - 765 URL: ww.smjafferco.com

Islamabad Branch Office:House # 32-A Nazimauddin RoadSector # F-7/a, Islamabad, Pakistan.Fax: (+92-51) 2653474Email: [email protected]

Published by

INSIDE

TRAINING & DEVELOPMENT - 61-63Leadership Revisited: A critical analysis

Mr Rauf NizamaniMr Raza KhanMr Tahir RaufMr Mubashir MalikMr Ferozeali HussainiMs Raeda LatifMr Sohailuddin AlaviMs Naila Aman KhanMr Farhan AnwarDr Aameer Mian

CONTRIBUTORS

Address: Room No. 612, 6th Floor, Clifton Center, Khayaban-e-Roomi, Clifton, Karachi.Ph: 021-35293371-72 Email: [email protected] Website: www.valuechainmagazine.com

Facebook: www.facebook.com/Value.Chain

Disclaimer: The views expressed by the writers do not necessarily re�ect those of the magazine or its editorial sta�.

11-16 Global & National Briefs17-18 Voice of Industry - In brief64-65 Regulatory Compliance66-67 Events68 Science & Technology69 Discovery72 Monthly Stock Market Review73 Monthly Commodity Review74 Art & Literature75-77 Travel and Tourism78-82 Sports85-86 Your Horoscope - Jan 201387 Quotes88-90 Entertainment

REGULAR FEATURES

Smuggling across durand lineGoods transporters strike:Sincerity with country or self interest

TRADE & INDUSTRY - 40-45

Innovating for saving our coastal ecologyHEALTH & ENVIRONMENT - 58-60

Tablet PCs VS. LaptopsINFORMATION & TECHNOLOGY - 70-71

BANKING & FINANCE - 50-54Paying for serious regulatory violationsCountry Risk Management

Everyone for himself and God for us allIs anarchy the promise of the future?Monetary Policy: its election year version

EDUCATION & TRAINING - 46-49Performance Management

EDITORIALS - 19-21

Trampled values, no regretsCorruption – the never-ending tragedyThe 5 year long unresolved mystery Fair elections in Pakistan: foreseeable as per schedule?

POLITICS - 22-26

IMF’s review of Pakistan’s economyReasons for Decline in Foreign InvestmentComplex Interdependence:Transforming Int’l Political Economy

ECONOMY - 27-35

HSBC vs. BCCI – Hypocrism at its bestCOVER STORY - 36-39

Importance of the Rural RoadsAGRICULTURE -55-57

Volume - 2 Issue - XXI - January - 2013 Price: PKR - 150

30-32

27-29 33-35

40-42

55-57

24

• Askari Bank Ltd.• Allied Bank Ltd.• Al-Baraka Bank Pakistan Ltd.• Bank Alfalah Ltd.• Bank Al-Habib Ltd.• Bank of Khyber Ltd.• BankIslami Pakistan Ltd.• Bank of Punjab• Burj Bank Ltd.• Barclays Bank PLC Pakistan• Dubai Islamic Bank • Faysal Bank Ltd.• Habib Bank Ltd.• Habib Metropolitan Bank • JS Bank Ltd.• KASB Bank Ltd.• MCB Bank Ltd.• Meezan Bank Ltd.• National Bank Ltd. • NIB Bank Ltd.• Soneri Bank Ltd.• Standard Chartered Bank• Summit Bank• Silk Bank Ltd.• United Bank Ltd.

Clients

K.G. Traders (Pvt.) Limited, is a leading knowledge based services organization which aims to fulfill the outsourced business needs of organizations in Banking and Corporate Sectors. Established in 1964, the organization is considered as most professional and reputable consul-tants, whereby, the service quality has always been appreci-ated by its valued customers.The firm is fully equipped and backed by a team of qualified personnel who believe in continuous improvement in service quality. The organization is diligent in its efforts to uphold the principles of professional practice, follows modern approaches and techniques in its strategies. Our product range includes but not limited to the following:

Key Services1. Collateral Management (Banks’ Muccadam) Services

2. Asset Valuation – PBA Approved No Limit Valuator

3. Supervision Services

4. Stock Inspection Services

5. Clearing & Forwarding Services

6. SECP related Services

7. BIR Services – Local Credit Report & Income Estimation

Our nation-wide presenceKARACHI BRANCH609 - Clifton Center, Block – 5, Kahkashan, Clifton.Tel: 021-35293377-80Fax: [email protected]

HYDERABAD BRANCHA-184, Bait-ul-Khair Building, Mezz. Floor, Near Meezan Bank, Jamia Masjid Road, Saddar.Tel: 022-2730941- 022303828Fax: [email protected]

FAISALABAD BRANCH05,04th Floor, Ashraf Butt Centre Circular.Tel: 041-2412028Fax: [email protected]

RAHIMYAR KHAN BRANCH05, Main Shafi Town, Shahbazpur Road.Tel: 068-5000428Fax: [email protected]

SUKKUR BRANCHC-28,1st Floor, Street No.6, Hamdard HousingSoceiety, Airport Road.Tel: 071-5000695Fax: [email protected]

GUJRANWALA BRANCH1st Floor, Dr. Nadeem Nazir, Muhallah Amir Park, Commissioner Road.Tel: 055-3017516Fax: [email protected]

ISLAMABAD BRANCH08,3rd Floor, Shahnawaz Plaza, Plot No.11, G-11 Markaz.Tel: 051-2100461Fax: [email protected]

LAHORE BRANCH305, Gulberg Arcade, Gulberg-IITel: 042- 35788428-29Fax: [email protected]

MULTAN BRANCH7 & 8, 1st Floor, Trust Plaza, LMQ Road.Tel: 061-4542535, 061-4542536Fax: [email protected]

August 2012

February 2012

May 2012

December 2011

March 2012

June 2012

January 2012

April 2012

July 2012

September 2012 October 2012 November 2012

Select an option: One year Rs.1500.00Two year Rs. 3000.00

Fatima Khalid Publications (Pvt) Ltd.

Pay OrderPlease enclose a Cheque/ Draft/ Payable to:

www.valuechainmagazine.com

Chief EditorDr. Zeeshan [email protected]

EditorJauhar [email protected]

Advisor Editorial TeamA.B. [email protected]

Deputy EditorMustafa Ali [email protected]

Assistant EditorSyed Asif [email protected]

Director MarketingK. Jehangeer [email protected]

VisualizerTaimoor Akhtar [email protected]

Design ManagerAli Siddique [email protected]

Bureau ChiefsSyed [email protected]

Ajmal [email protected]

Mumtaz [email protected]

Ibn-e-Hassan Printing Press, Hockey Stadium, Karachi.

Rehbar News Agency, Karachi. 0333-2168390

Syed Yasir Ali, Book Mart, Lahore. 042-35773717-18

Irfan Book PointNear Cantonment Police Station,Jammia Masjid Road Saddar,Hyderabad. 0300-3012131

Ahmad Rehman, Best Book Sellers,Faisalabad. 041-38733763Kitab Ghar, M. Khalid, I-144, Iqbal Road,Rawalpindi. 051-5552929

National News Agency, Book Mart, Karachi. 021-35688828

Printed By

Distributors

OUR TEAM E d i t o r ’ s n o t eEditor’s note

The Quaid’s vision of PakistanThe sunset on the 31st of December marks the end of the year 2012 heralding the world into the new year. From Pakistan’s point of view, the year gone by was eventful and turbulent in terms of loss of life and property. Let us hope and pray that the new year would usher us in an era of peace, progress and prosperity. The establishment of Pakistan is a remarkable achievement of Quaid-e-Azam Mohammad Ali Jinnah. With his multifaced qualities of leadership, he changed the course of history and created Pakistan as a new state where the subcontinent Muslims could enjoy and advance their socio-cultural identity, profess their religious beliefs freely and independently, exercise their rights and protect their interests. To build up his case for Pakistan as a separate country, the Quaid had to contest at three different fronts-- the British who were not convinced with the idea of dividing India, the Congress leaders who opposed the partition of India based on the Muslims’ ‘Two Nation Theory,’ and some of the Muslim groups who, perhaps on instigation of the Congress, were against the demand for establishment of Pakistan. The Quaid-e-Azam succeeded on all these fronts.By nature, the Quaid was cool and calculated and always looked for a compromise solution in case of controversies and was willing to accommodate others’ viewpoints without compromising on the principles he cherished and considered inviolable. Disappointed by the attitude of the British and the Hindus towards the Indian Muslims, Jinnah was convinced that Hindus and the Muslims could not co-exist in undivided India. Therefore, while convincing the British and the Hindus for division of India into two independent nation sates, he devoted his whole-hearted concentra-tion to creating consensus among the Muslims for achieving a separate homeland for them. He articulated the Muslims demands and aspirations so forcefully and effec-tively that it helped him gain full confidence of the predominant majority of the Muslims in his leadership for steering them out of the morass. Thus Pakistan appeared on the world map as an independent country on 14th August 1947. From his various speeches and statements it is evident that the Quaid had envisioned Pakistan as a modern democratic state that draws its inspirations from the teachings and principles of Islam as one of the sources in running the affairs of the state. He stood for constitutionalism, democratisation, the supremacy of the rule of law, socio-economic justice, religious tolerance and non-discrimination of the citizens of the state on the basis of religion, cast or creed. In his address to the people of Australia in February 1948, the Quaid-e-Azam is reported to have said that “Islam demands from us the tolerance of other creeds and we welcome in closest association with us all those who, of whatever creed, are themselves willing and ready to play their part as true and loyal citizens of Pakistan.”What we see today is unfortunate; we have drifted away from the Quaid’s vision of this country. Corruption, violence, terrorism, targeted killings, street crimes, extor-tion, loot and arson, and evils of the sort are the hallmark that have pushed the coun-try economically backward. More than 2200 people were killed during 2012 in Kara-chi alone. These events call for soul searching.As we enter the New Year we need to revisit the Quaid-e-Azam’s vision and ideals of Pakistan, imbibe them and try to rebuild the country accordingly. In his efforts to achieve Pakistan, the Quaid-e-Azam had dreamt of a country that would be based on an egalitarian modern democracy that offers equal opportunities to all to live a happy, prosperous life. We need to fulfill the Quaid’s dream if at all we wish to survive and sustain in the comity of nations with pride and honour.

10 www.valuechainmagazine.com

“Value Chain” welcomes the views of its valued readers. Please send us

your views on the address below:

Fatima Khalid Publications (Pvt) Ltd.Room No. 612, Clifton Centre,

Block 5, Clifton, KarachiEmail: [email protected]

The Editor reserves the right to edit your letters for making it brief or for

any linguistic flaws therein.

Congratulations:It had been a delightful experience to go through Value Chain (November 2012 issue). It is rich in form and content, appearance and reality. It serves the basic purpose of commu-nication: to inform, to persuade and to entertain. It is refreshing and motivating. It will not only be welcomed in business world but also in economic and social circles because it has a general appeal, and, probably, there is something for every reader. Variety is its hallmark. It offers ideas and ideas control the world. A great idea is a great discov-ery. Ideas help us advance in every field of life; enkindle the fire of struggle which leads to change. We cannot progress without change. Therefore, through Value Chain, go on spreading new ideas and contrib-ute towards making the society more harmonious and dynamic.I congratulate you on bringing out such a flowery, spicy and useful maga-zine. It is your service to the nation.In the end let me share with you a few words on business; A business with-out profit cannot exist, but a business without a higher purpose has no life.Prof. Miskeen Ahmad MansoorHyderabad.Suggestion for further improvement:I am a regular subscriber of Value Chain which I find interesting and informative. ‘Global and national briefs’ and ‘Voice of Industry’ are useful contributions as they give a birds’ eye view of news and views in Pakistan and abroad at a glance. The editorials and articles cover a wide variety of subjects. I suggest if possible please also include in the magazine

sections on Profiles of important personalities who could serve as role model for others to follow, and Indus-try SWOT Analysis. These additions might add value to the contents of the magazine.Shamsul HaqueIslamabad

De-weaponization:Your editorial on De-weaponization (December 2012 issue) is a true reflec-tion of the people’s sentiments; a regime with a conscience alive must accept its failures and opt out of the office. Country-wide deweaponiza-tion and change of ‘policies that have been fuelling militancy in the country’ are important for restoring peace and order but this is not the right time when the next general elections are around the corner. The editorial rightly maintains that any such move ‘will create grounds for imposing country-wide state of emergency to help the regime stay in power, most likely, for an indefinite period.’ Safdar ZaidiLahore

Financing Infrastructure: Importance for socio-economic development:The title and the cover story of Value Chain (December 2012 issue) are attrac-tive and impressive. The author has quite elaborately dealt with the need and importance of infrastructure development for ensuring socio-economic development. As rightly mentioned, infrastructure is the main-stay of the country’s economy while infrastructure assets are vital for economic and social activity. Inad-equate physical infrastructure has been ‘one of the critical reasons for holding back more rapid economic growth ‘ in Pakistan. The author’s view that infrastructure development should be combined with other factors such as good governance and law and order situation carries weight. One hopes that the authorities concerned will give thought to it.Naila MasoodQuetta

Karachi: a mega city without a viable public transit system:The article is a reflection of the prob-lems of public transit system the city lacks to meet the growing needs of the ever increasing population. It is unfortunate that the planning agen-cies have failed to realise and make successful efforts to develop and manage the urban infrastructure to meet the growing requirements of the commuters. The suggestions in the

article are important and need to be given serious consideration by the authorities concerned. Salman HussainKarachiEnvironmental pollution:The article is topical and interesting. Environmental pollution is fraught with serious consequences in times to come making living on this planet tougher. It is a global problem. How-ever, none of the countries around the world seem to have taken the problem seriously. As pointed out by the author, the problem has contin-ued to multiply because ‘global forums have failed to impose univer-sally applicable regulations to steadily cut the emission of the harmful gases.’ It is high time the govern-ments the world over take it seriously. Samina KhalidSialkotDire need of investment in agicul-tural R&D:The above article is on a subject of critical importance and needs to be given due attention on a priority basis. Population in Pakistan and elsewhere in the world is continuously growing making it inevitable to increase agricultural productivity to feed them. The need is equally as important and emergent in Pakistan that is highly dependent on agriculture. To ensure increase per acre yield in agriculture there is need, besides other factors, to have enhanced investment in agricultural research and develop-ment. Seen in this context, the article is of topical interest and importance. One hopes that the authorities concerned witll take note of the sugges-tions contained in the article for achieving higher agricultural growth in Pakistan.Brishna Shah Karachi

Letters to the EditorE d i t o r ’ s n o t e

BRIEFS

Global Politics

Iran claimed captured US drone: The naval arm of the Iranian Revolutionary Guards said in a statement on its website Sepahnews.com on 4 December that "the unmanned US drone patrolling Persian Gulf waters, performing reconnaissance and gathering intel, was captured as soon as it entered Iranian airspace”. US Navy denied the Iranian claim.

Turkey to keep buying gas from Iran: Turkish Prime Minister Tayyip Erdogan has said that Turkey will continue to buy natural gas from Iran despite the prospect of tighter US sanctions. He said that gas imports from Iran were vitally important for Turkey which depends heavily on imported energy.

Egypt’s Morsi caves in; scraps immu-nity decree: A concession offered by President Mohamed Morsi by scrapping immunity decree failed to placate oppo-nents who accused him on December 9 of plunging Egypt deeper into crisis by refusing to postpone a vote on a constitu-tion shaped by Islamists.

Russia and China block UN resolu-tions against Assad: Russia and China blocked UN resolutions against Bashar al-Assad, saying they oppose foreign intervention in the conflict. Meanwhile, Washington and its NATO allies, who have thrown their weight behind the opposition, are pressing for Asad’s depar-ture to end the conflict in Syria. Russia has dismissed speculation that it is preparing for its ally’s possible exit from power.

US blacklists Qaeda-linked Syrian rebel group: The United States on December 11 blacklisted and designated the radical Syrian rebel group “Jabhat al Nusra”, an important element in the opposition struggle, as a foreign terrorist organisation and said it was trying to hijack the rebellion on behalf of al- Qaeda in Iraq.

Syrian jets fired rockets at Palestin-ian camp in Damascus: Syrian fighter jets bombed the Palestinian Yarmouk camp in Damascus on December 16 killing at least 25 people sheltering in a mosque. Yarmouk camp has steadily been drawn into the conflict in Damas-cus over the past month.

Israeli foreign minister quits after indictment: Israeli Foreign Minister Avigdor Lieberman, a key ally of the premier, resigned on December 14 after having been charged with breach of trust, barely five weeks ahead of general elections.

Iran warns against Patriot deploy-ment on Syrian border: Iran’s army chief of staff warned NATO on December 15 that stationing Patriot anti-missile batteries on Turkey’s border with Syria was setting the stage for world war. He called on the Western military alliance to reverse its decision to deploy the defence system.

Hillary Clinton says countries should meet Afghan funding pledges: US Secretary of State, Hillary Clinton said in Brussels on December 5 that it was crucial that NATO allies stick to their commitments to fund Afghanistan’s security forces after Western forces end their combat role in the country in 2014. Afghanistan’s foreign backers had pledged $4.1 billion per year to fund Afghan security forces after 2014 but there have been concerns expressed that austerity–hit European countries may not be able to meet their commitments.

US military to keep strong presence in Middle East: Defence Secretary Leon Panetta said on December 11 that the US military will retain a “strong presence” in the Middle East despite a strategic shift to Asia. Panetta said that the United States plans to deploy a majority of its naval fleet to the Asia-Pacific along with other advanced weaponry but a robust Ameri-can force would remain in place in the Middle East.

Chavez suffers new complications in his cancer surgery: Venezuelan Presi-dent Hugo Chavez, who is recovering from cancer surgery, has suffered "new complications," according to Vice Presi-dent Nicolas Maduro. Chavez, age 58, has not disclosed what type of cancer he has, and the Venezuelan government has released few details about his illness, fueling widespread speculation about his health and political future.

Victory bolsters Modi’s chances of India premiership: Controversial Hindu national-ist Narendra Modi secured a landslide poll victory in the Indian state of Gujrat on December 20, firming up his chances of running for prime minister in 2014.

Former Marine released from Mexi-can prison: A former U.S. Marine Jon Hammar, aged 27, who suffered for more than four months in a Mexican prison in the border town of Matamoros, just across from Brownsville, Texas on a questionable gun charge was freed to spend Christmas with his family after U.S. politicians inter- vened for his release.

Argentine government blasts farm-ers’ strike: Argentine Agriculture and Livestock Minister Norberto Yauhar accused farmers who organized what proved to be a very effective 24 hours livestock trading strike on 26 Dec, of responding to ‘political interests’. The farmers’ Liaison Board said they are considering extending the protest to other economic activities.

11www.valuechainmagazine.com

BRIEFS

Global Politics27 killed in US school shooting: At least 27 people, including 18 children, were killed on December 14 when at least one shooter opened fire at an elementary school in Newtown, Connecticut. It was one of the worst mass shooting in US history.

China demands Vietnam to stop oil probe in South China Sea: China told Vietnam on December 6 to stop unilat-eral oil exploration in disputed areas of the South China Sea and not harass Chinese fishing boats. Vietnam held protests against China on December 9 after Beijing’s demand.

Afghan’s attack Iran consulate over alleged killings: Hundreds of angry demonstrators tried to storm the Iranian consulate in the western Afghan city of Herat on December 9 in protest at the alleged killing of Afghan immigrants by Iranian security forces.

Taliban to attend Paris Conference: The Taliban reportedly said on December 10 that they would attend a conference on Afghanistan in Paris but would not hold peace talks with Afghan government delegates or other groups. President Hamid Karzai has long sought peace talks with the Taliban, but the Islamists have dismissed his government as a puppet of the United States.

Park Geunhye wins South Korean presi-dency: Park Geunhye, daughter of a former military ruler, won South Korea’s presidential election on December 19 to become the country’s first female leader saying she would work to heal a divided society.

Japan’s new PM said no compromise on islands: Japan’s newly elected Prime Minis-ter Shinzo Abe said on Dec 17 that Japan’s relationship with China was important but there can be no compromise on the sovereignty of islands at the centre of a dispute with China.

Italy’s PM says he will resign in coming days: Italy geared up for early elections after Prime Minister Mario Monti said on December 9 that he will resign in the coming days and Silvio Berlusconi announced that he will run again for the sixth time in two decades.

Nobel laureates received prizes at Stockholm ceremony: The 2012 Nobel laureates in medicine, literature, econom-ics, physics and chemistry received their prizes from Swedish King Carl XVI Gustaf at a gala ceremony in Stockholm on December 10.

Germany expelled four Syrian embassy staff: Germany on December 10 expelled four employees of the Syrian embassy in Berlin, the foreign minister Guido Wester-welle said, as part of moves to further isolate the regime of Syrian President Bashar al-Assad.

Russia negotiates union with ex-Soviet states: On December 19, Russia sought to expand its influence over former territories during integration talks that Washington has cast as a bid to “Re-Sovietise” the region. President Vladimir Putin met separately with the leaders of Belarus and Armenia before engaging the head of resource-rich Kazakhstan about ways to more closely bind the neighbours' economies. He also attended a collective security meeting that resolved to create a Moscow led air defence unit that would focus its activities on the regions surrounding war-torn Afghanistan.

US concerned over Tibet violence: The United States has expressed concern over self-immolations in Tibet and called on China to let residents express their grievances freely following a spike in violence in the Himalayan region. Wash-ington also urged Beijing to talk with the Dalai Lama without preconditions and to allow journalists, diplomats and other observers’ unrestricted access to China’s Tibetan areas.

Mali PM resigns after being arrested: The Prime Minister of Mali, Cheick Modibo Diarra resigned on December 11, hours after he was arrested at home by soldiers acting on the orders of former coup leader Amadou Sanogo. The resignation plunges further into chaos the country which is already effec-tively split in two after armed Islamists linked to al Qaeda took over the north.

Sri Lanka defends China’s expansion in Indian Ocean: Sri Lankan Defense Secretary Gotabaya Rajapaksa has defended China’s increased naval presence in the Indian Ocean and rejected claims that it is a threat to regional power India. Addressing a gathering of naval delega-tions from 28 countries at the annual maritime conference in the southern city of Galle on December 13, Rajapaksa insisted that multimillion-dollar funding from China to Sri Lankan ports was purely a commercial interest.

Chinese intellectuals urged party leaders to disclose wealth: About 65 Chinese academics, lawyers and human rights activists have signed an open letter demanding that top members of the ruling Communist Party reveal their financial assets, saying it is the most fundamental way to solve corruption.

North Korea replacing faulty rocket stage: North Korea is replacing a faulty section of a long-range rocket in a bid to put its launch schedule back on track, and is receiving help from Iranian missile experts. The head of US Pacific Command said on December 6 that the United States has deployed naval ships equipped with ballistic missile defences and is monitoring North Korea very closely ahead of an anticipated rocket launch. Cambodian Prime Minister and ASEAN Chairman Hun Sen urged North Korea on December 10 to scrap its planned rocket launch as it would bring “fear and tension” to the region.


Global Economy

IMF, EU push for less drastic deficit cuts: The International Monetary Fund and European Commission officials have encouraged France and its eurozone partners not to fixate on deficit reduction targets if it would exacerbate the bloc's debt crisis. The head of an IMF mission in France, Edward Gardner, urged officials in Paris to consider their 2013 budget targets "in a broader European context." The IMF and the EU Commis-sion expect the French public deficit to amount to 3.5 percent of gross domestic product (GDP) next year.

IMF extends zero-interest rates for low income nations: The International Monetary Fund (IMF) said it has approved a two-year extension to the zero-interest rates charged on loans to low-income countries. The financial institution said the extension is part of a wider strategy to support concessional lending to poorer countries as they combat the effects of the global economic crisis. The move, approved by the IMF Executive Board, extends the waiver through 2014.

China’s economy may grow 8.2 percent in 2013: China’s economic growth, according to the Chinese Academy of Social Sciences, may quicken to 8.2 percent in 2013 from an expected 7.7 percent in 2012 in response to official growth-promoting policies, but downside risk remains from global uncertainties. The 8.2 percent GDP growth forecast is, however, contingent on the European debt crisis not worsening and the US avoiding a “fiscal cliff.” A US intelligence report said on December 10 that China’s economy is likely to surpass the United States in less than two decades while Asia will overtake North America and Europe combined in global power by 2030.

OPEC cartel to reap record $1tn: The Organization of the Petroleum Exporting Countries will reap more than $1 trillion in net oil revenue for 2012. The report said

Brent oil prices would average about $111.50 for the year, higher than the previous record of $110.90 set in 2011.

Analysts see 2013 Brent price around $110/barrel: Petroleum analysts are in consensus in forecasting Brent crude to average around $110/b in 2013. Geopo-litical tensions were generally considered the biggest threat to higher oil prices given the muted global economic growth anticipated for the coming year.

China lets foreign sovereigns, banks exceed $1bn investment limit: China’s foreign exchange regulator has removed the $1 billion limit for foreign sovereign wealth funds, central banks and monetary authorities buying Chinese assets through the Qualified Institutional Investor Prog- ram (QFII).

Ukraine says no to IMF loan in 2013: Ukraine has ruled out taking any money from the International Monetary Fund next year. In an interview, Ukraine’s Prime Minister Mykola Azarov criticised the IMF’s debt crisis measures as being ineffective in several European countries, and said they have even led to stagnation. The IMF mission planned to visit Kiev this month to discuss the agreement on a standby loan but the visit has now been postponed till mid January.

Federal Reserve Board proposed new rules to regulate US operations of foreign banks: The proposal would require foreign banking organizations with a significant U.S. presence to create an intermediate holding company over their U.S. subsidiaries, which would help facilitate consistent and enhanced super-vision and regulation of the U.S. opera-tions of these foreign banks. Foreign banks would also be required to main-tain stronger capital and liquidity positions in the United States, helping to increase the resiliency of their U.S. operations.

Belarus to reopen talks on IMF new program in spring 2013: Belarus is planning to reopen talks on the new loan program with the International Mon-etary Fund in the spring of 2013, Chair-person of the Board of the National Bank of the Republic of Belarus (NBRB) Nadezhda Yermakova said during the Q&A phone session with local journalists.

Japan’s economy contracted in July- September 2012: Revised government data showed on December 10 that Japan’s economy contracted for a second straight quarter in July-September, indicating that weak global demand nudged the export-reliant economy into a mild recession. Analysts expect another quarter of contraction in the final three months of this year due to sluggish exports to China, keeping the Bank of Japan under pressure to loosen monetary policy.

World Bank predicts 6.3 percent growth in Burma in 2013: The World Bank announced that Burma’s economy continues to grow and is expected to reach 6.3 percent in the fiscal year 2012- 13 despite the fact that the country has yet to realize its potential. In its bi-annual East Asia and Pacific Economic Update released on December 19, the World Bank said that the economies of devel-oping East Asia and the Pacific “remained resilient despite the lackluster performance of the global economy.”

World Bank lowers PNG’s growth forecast: The World Bank predicted slower growth for Papua New Guinea compared to the past decade. The bank reports economic growth at eight per cent for 2012, down one per cent on last year, due to a weaker currency and commodity prices with low rural and government incomes. The report predicted further marked slowing of growth in 2013 and 2014 with fewer new investments.


BRIEFS

BRIEFS

Global EconomyWorld Bank private arm to issue bonds in African markets: The International Finance Corp, the World Bank's private sector arm, plans to issue local currency bonds in 10 African markets from next year to build capital in one of the world's fastest growing regions. Jingdong Hua, vice president and treasurer at IFC, said the group is looking at Nigeria, South Africa, Ghana, Zambia, Rwanda, Namibia, Botswana, Uganda, Kenya and the West Africa franc bloc. The bonds would be priced in the likes of South Africa rand, Botswana pula, Nigerian naira, Ugandan shilling or Zambian kwacha rather than the US dollar or euro, Hua told Reuters in an interview. The project could prove a boon to Africa which is growing on average at 5 to 6 percent a year and is eager to develop transport and power infrastructure.

World Bank said NATO pullout could hit Afghan development: Afghanistan is having trouble keeping hard-earned development gains due to looming security challenges when Nato military forces withdraw in 2014, an internal World Bank audit report revealed. The review said the Bank’s programs in the war-torn country had achieved “impressive results” in areas like public health, telecommunications and community development. However, it warned that “with the expected reduction of the international presence in 2014, sustainability of development gains remains a major risk because of capacity constraints and inadequate human resources planning on the civilian side.”

World Bank boosts Philippines anti- poverty project: The World Bank will lend $100 million to the Philippines to bolster a government scheme that helps millions of poor families give their children proper schooling and healthcare. The extra funding will mean 200,000 more households are given a monthly subsidy of not more than $34 in return for ensuring children under 14 go to school and get regular health checks. The government program already covers three million families, and has kept 7.9 million children in school while also requiring that pregnant mothers must receive proper care.

UK lawmakers call for tax crackdown on multinationals: A committee of UK lawmakers has reportedly called on govern-ment to crack down on multinational companies that make substantial sales in Britain but pay little tax, echoing demands from leaders across Europe for measures to tackle corporate tax avoidance.

Monetary stimulus Bank of Japan: The Bank of Japan delivered its third shot of monetary stimulus in four months on December 20, in a prelude to more aggressive action next year as it faces intensifying pressure from the country’s next leader for bolder action to beat deflation. It also signaled setting a higher inflation target at its next meeting in January, when a new government will be in place.

Weak US exports, imports signal tepid growth: The US trade deficit widened in October as exports suffered the biggest drop in nearly four years, indicating slowing global demand was spilling over into the already struggling US economy. The trade gap reportedly increased 4.9 percent to $42.2 billion while imports hit the lowest level in 1-1/2 years.

Islamic banking expansion aided by ADB: The Asian Development Bank (ADB) has provided a $750,000 grant to promote Islamic banking in Indonesia, Pakistan and Bangladesh. The money will be shared between those countries’ governments to help their banking systems to meet regulatory standards set by the Islamic Financial Services Board.

Mitsubishi Bank fined $8.6m for flouting US sanctions: Mitsubishi UFJ, Japan’s biggest bank has been fined US $8.6 million for flouting US sanctions on Iran, Sudan, Myanmar and Cuba.

Greece gets new EU aid: The eurozone agreed on December 13 to provide nearly 50 billion euros ($64 billion) in long-delayed aid to Athens prompting its Prime Minister Antonis Samaras to declare an end to talk of a Greek exit from the single currency.

Merkel sets limits on eurozone risk-sharing: European leaders agreed on December 14 to press on with further steps to tackle their debt crisis but German Chancellor Angela Merkel threw out a proposal to boost risk-sharing with a fund to help eurozone states in trouble.

Brazil’s economy grows by 0.6 percent in third quarter: Brazil’s economy grew just 0.6 percent in the third quarter of 2012 compared with the previous three months, signaling a weaker than anticipated recov-ery, the Brazilian statistics office, Institute of Geography and Statistics reported. The economy rose 0.9 percent in the July-to-September quarter compared with the same period of last year, and a mere 0.7 percent so far this year.

Banking deal boosts EU leaders in fighting crisis: European governments reached a landmark deal on December 13 that gives the European Central Bank new powers to supervise banks, boosting confidence in the single currency bloc as it enters the fourth year of its debt crisis. Under the deal, the ECB would regulate some 150 to 200 banks directly, mostly major cross-border lenders and state aided institutions, with the power to delve into all 6,000 banks in case of problems.


BRIEFS

Pakistan’s defense requirements: At the 21st meeting of the US Pakistan Defense Consultative Group on December 4 both countries recognized the security require-ments on both sides of Pakistan-Afghanistan border and agreed to coop-erate on a prioritize set of Pakistan’s defense requirements.

Caretaker setup likely in January: PPP leaders and coalition partners have report-edly advised President Asif Ali Zardari to dissolve the National Assembly in January 2013 and install a caretaker setup for elections holding elections by mid April. The President is reported to have told them that election date was in his heart which he would share with his party and coalition partners at an appropriate time.

Mirwaiz urges linking MFN status to India with resolution of Kashmir dispute: Chairman, All Parties Hurriyat Conference, Mirwaiz Umar Farooq on December 19 urged Pakistan to link granting of Most Favoured Nation (MFN) status to India with its recognition of the rights of Kashmiri people.

India denounces 42 Pakistan terrorist camps: India’s Junior Home Affairs Minister Mullappally Ramachandran told the Indian parliament on December 4 that there were more than 40 training camps in Pakistan for militants who make regular attempts to cross the border between the two countries. He said that India has identified 25 camps in Azad Kashmir and 17 in other parts of Pakistan containing around 2,500 militants. He claimed that Pakistan- based militants with the support of Pakistan Army have made 249 attempts to sneak into Indian territory so far this year.

Parties with militant wings behind Karachi unrest: PML-N President, Mian Nawaz Sharif said on December 5 that the political parties with militant wings are involved in unrest in Karachi and are also part of the government. He called for collective effort for peace in the city.

Pakistan has paid high price-NATO head: NATO head Anders Fogh Rasmus-sen told Foreign Minister Hina Rabbani Khar in Brussels on December 3 that Pakistan has paid a high price in the fight against terrorism and that NATO attaches importance to its ties with Pakistan in these efforts.

SC orders verification of electoral rolls with Army, FC help: Despite opposition by MQM’s leadership, the Supreme Court on December 5 directed Election Commission of Pakistan (ECP) to seek Pakistan Army and Frontier Constabulary’s help regarding door-to- door verification process of electoral rolls in Karachi to ensure conduct of free, fair and transparent elections. In a statement, the Chief Election Commis-sioner said that the Commission was ready for door- to-door verification of voters in Karachi with the help of the Army. Reportedly, Speaker of the Sindh Assembly is unhappy over the Supreme Court decision to get the Army and FC involved in the process.

Ch. Nisar vows to resist tax amnesty scheme: Opposition leader in the National Assembly, Chaudhry Nisar Ali Khan on December 10 vowed to strongly resist the government’s move to pass the proposed Tax Amnesty Scheme under Finance (Amendment) Bill 2012, the National Accountability Commission Bill 2012 and Dual Nationality (Amendment) Bill from the Lower House.

National PoliticsTTP threatens to step up attacks on secular parties: The banned Tehrik-e-Taliban Pakistan has reportedly threat-ened to stage further attacks targeting political gatherings of the country’s secular Awami National Party and the Muttahida Qaumi Movement.

SC issues contempt notice to Altaf: Taking notice of the speech delivered by MQM Chief Altaf Hussain on Decem-ber 2, the Supreme Court has issued show-cause notice for explanation as to why he should not be proceeded against for contempt of court in accordance with the constitution and the law. According to reports, MQM Chief Altaf Hussain has said he has no plan to protest against the Supreme Court’s judgment, rather he would prefer to submit his reply in the court while living in the ambit of the constitution.

Pakistan wastes up to $72m a day- NAB: Chairman, National Accountabil-ity Bureau (NAB) Admiral Fasih Bokhari (retired) said on December 13 that Pakistan wastes a whopping $51 to $72 million every day as a result of ineffi-ciency, corruption and tax shortcomings. He said that the losses come from leaks, corruption and incompetence, tax losses, land grabbing, loans and defaults, over- staffing, energy losses, project delays, cost overruns, administrative costs and foreign exchange outflow.

Visa accord between Pakistan and India: India and Pakistan on December 14 sealed an agreement to ease tough visa restrictions for travelers as part of efforts aimed at rebuilding relations that soured in 2008 between the two nuclear- armed neighbors when militants attac- ked India’s financial capital.

NA passes Fair Trial Bill 2012: The National Assembly on December 20 passed the “The Investigation for Fair Trial Bill 2012” which is devised to give the government more powers to fight terrorism.


Size of undocumented economy is expanding: Securities and Exchange Commission of Pakistan Chairman said on December 3 that the size of undocu-mented economy, which has developed a parallel economy, is expanding and to tackle the situation, the government is seriously concentrating on expanding the tax base and making all out efforts to raise Tax-to-Gross Domestic Product (GDP) ratio.

Indo-Pak trade normalization process appears stalled: According to reports, Pakistan-India trade normalization process appears to have hit snags and phasing out of negative list by December 31, 2012 as promised by Islamabad is in doubt.

Old cars age limit reduction may cost kitty Rs. 13.7 bn: The Federal Board of Revenue has reportedly estimated revenue lost of Rs. 13.7 billion during January- June 2013 on curtailing age limit of old and used vehicles from 5 to 3 years.

Commerce Ministry barred from issuing notification to reduce age limit of old cars: The National Assembly’s Standing Committee on Finance on Tuesday termed the Economic Coordina-tion Committee of the Cabinet’s decision on reducing age limit of old and used cars from 5 years to 3 years as non-transparent and barred the Ministry of Commerce from issuing notification for the imple-mentation of the decision.

Iran to provide $500m for gas pipeline: Prime Minister’s Advisor on Petroleum Dr. Asim Hussain said on December 4 that Iran has agreed, on Pakistan’s request, to provide $500 million for construction of Iran-Pakistan gas pipeline inside Pakistan out of which $250 million would be provided directly to Pakistani govern-ment and the remainder would be provided via an Iranian bank.

FBR to ask Swiss authorities about black money: The Federal Board of Revenue (FBR) is reportedly planning to approach Swiss authorities in order to retrieve billions of dollars in black money that were transferred by Pakistani individuals and corporate entities to Switzerland. It was possible to retrieve money from Switzerland under article 25(I) of the avoidance of double taxation treaty between Pakistan and Switzerland which clearly makes it obligatory on Switzerland to provide information regarding Pakistanis maintaining accounts in Switzerland.

MFBs urged to emphasize on savings mobilization, cost reduction: Inaugurating the 6th Pakistan Microfi-nance Country Forum in Karachi on December 5, SBP Deputy Governor Kazi Abdul Muktadir urged Micro Finance Banks (MFBs) to emphasize on savings mobilization and cost reduction by developing new strategies and infrastructure such as branchless bank-ing. He also disclosed that International Strengthening Fund (ISF) has so far approved Rs. 632 million for 13 microfi-nance providers including top and middle tier Micro Finance Banks and Micro Finance Institutions.

Pak farmers demand Rs. 12,000 per acre subsidy: Representatives of farmer organizations have asked the federal government to either give subsidy of Rs. 12,000 per acre to growers on various inputs or impose Rs. 400 per 40 kg regula-tory import duty on Indian produce to ensure level playing field against highly subsidized Indian agriculture sector.

Foreign investment in Pakistan plummets-World Bank: The World Bank has revealed that foreign investment in Pakistan has declined by $4.13 billion during the four years of the present government.

President Zardari wants APC on economic issues: Addressing a recep-tion hosted by him in honor of the mem-bers and officials of Overseas Investors Chamber of Commerce and Industry (OICCI) on December 6, President Asif Ali Zardari asked businessmen to organ-ize an all-parties conference on economic issues. He said that he would also attend such a conference to reach a consensus on vital issue of investment and economic policies of the country. He also empha-sized the need for more foreign invest-ment in Pakistan and urged the investors to play their due role in the formation of long-term investment policies.

Kalabagh Dam project opposed: All the political parties allied with the govern-ment or opposition benches in the Sindh Assembly have joined hands against the Lahore High Court’s recent verdict in favor of Kalabagh Dam project.

OGDCL discovers gas in Khairpur: Oil and Gas Development Company Ltd (OGDCL) has discovered 20 Million Cubic Feet per Day (MMCFD) gas from Suleman-1 exploratory well located in District Khairpur, Sindh.

National EconomyTI statistics in corruption report wrong- PAC: Chairman, Public Accounts Committee Nadeem Afzal Gondal on December 6 challenged the Transparency International report on corruption saying the report was not prepared in good faith.

US committed to release $600 million: Finance Minister Dr. Abdul Hafeez Shaikh is reported to have informed the Prime Minister Raja Pervez Ashraf that US government has reaffirmed its commit-ment to release $600 million for the Coalition Support Fund, to rehabilitate power distribution system and electricity plants at Guddu, Jamshoro and Muzaffar-garh and committed to support in the completion of Diamer-Bhasha dam for which $200 million had been approved to start the work.

NAB saves corruption of Rs. 1.5 trillion: The National Accountability Bureau (NAB) on December 9 claimed that during the last 6 months under its Aware-ness and Prevention of corruption regime it had saved Rs. 1.5 trillion from being embezzled through its early interventions in more than a thousand projects.

Currency swap arrangement between Iran and Pakistan: Reportedly, Pakistan and Iran are unlikely to sign currency swap arrangement (CSA) as central banks of both the countries believe that such an option is not available. Because of interna-tional sanctions on Iran, Pakistani banks were hesitant to conduct transactions with Iranian banks and most of trade activities were either carried out in cash or via third country, particularly Dubai.

Govt collects more revenues from auto industry, than estimated: Contradicting the Federal Board of Revenue’s claim of revenue loss of Rs. 17 billion due to cut in age limit of import of used cars, the auto industry has pointed out that loss linked to unabated arrival of used cars is more colos-sal. They said that the revenue generated by the government on similar vehicles manu-factured by the local industry would have been Rs. 21.5 billion exceeding the levy on used cars by Rs. 4.5 billion per annum.

Overseas Pakistanis remit over $5.98bn in 5 months of FY13: Overseas Pakistanis remitted an amount of $,982.04 million in the first five months of the current fiscal year showing a growth of 14.16 percent when compared with $5,239.99 million received during the same period of the last fiscal year.

BRIEFS


BRIEFS

APTMA protests against reduced gas supply: All Pakistan Textile Mills Associa-tion (APTMA) Chairman, Shahzad Ali Khan has strongly protested against five days a week gas curtailment to textile indus-try by the SNGPL, as the industry would not be able to perform when it is already passing through six hours a day electricity loadshedding. He said that the government was looking for IMF assistance to meet balance of payment commitments while losing three billion dollars foreign exchange by curtailing gas to textile industry.

Govt urged to announce cotton policy: Kisan Board Pakistan (KBP) Central President, Sardar Zafar Hussein Khan has urged the federal government to immedi-ately announce a cotton policy as growers are being exploited in absence of such a policy. In a statement on December 4, he said that prices of agricultural inputs including fertiliser and petroleum products had increased manifold and cotton prices also need upward revision in the light of increase in input cost. He demanded that the government should fix ‘phutti’ price at Rs. 4000 per maund and ensure that the cotton growers are not exploited by the stakeholders.

Mr. Manzar Khurshid Shaikh, President, Rawalpindi Chamber of Commerce & Industry, visited the Karachi Chamber of Commerce & Industry and had a meeting with the President, Mr. Muhammad Haroon Agar. In the picture, Mr. Muham-mad Haroon Agar, President of the Cham-ber, is seen presenting Chamber’s Crest to Mr. Manzar Khurshid Shaikh.

SCCI proposes to slash mark-up rate on export refinance: The Sarhad Cham-ber of Commerce and Industry (SCCI) Standing Committee on ‘Banking and FDIs’ has proposed for lowering the mark-up rate on export refinancing and suggested that commercial banks should extend soft-loans to war- affected business community, for economic development and industrial growth in the Khyber Pakhtunkhwa.

Mr. Siraj Kassam Teli, Chairman, Businessmen Group and former President of the Karachi Chamber of Commerce & Industry (KCCI) is seen presenting souvenir to Honourable Raja Pervez Ashraf, Prime Minister of the Islamic Republic of Pakistan, at a meeting, at Aiwan-e-tijarat. Syed Naveed Qamar, Federal Minister for Defence, is also seen in the picture.

Millers seek enhancement of limit for sugar export: Fearing market saturation in the wake of fresh sugar production of 5 million tons in addition to 1.2 million tons in unsold stock, millers have urged the government to allow them to export at least 1.2 million tons of white refined sugar from the existing limit of 400,000 tons.

Textile associations reject raise in gas prices: The leaders of textile associa-tions have rejected the proposed raise in gas prices by 9.87 percent and termed it an unwise move, as it would further increase the cost of doing business, hit industrial production, affect exports and would be detrimental to the national economy as well as industry.

LCCI supports NTN drive by FBR: The Lahore Chamber of Commerce and Industry (LCCI) has supported the FBR’s decision making it mandatory for the businesses to display their National Tax Number (NTN) at their place of business as it will help broaden the tax base that is the need of the hour.

Need to expedite normalisation of Indo-Pak trade ties underlined: Chair-man, Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) India, Vinod Kumar Ladia has said that India has strong base in the textile sector, particularly in man-made fabric and can provide its technology to Pakistan. Speaking at the Lahore Chamber of Commerce and Industry on December 3, he urged the governments of Pakistan and India to expedite normalisation of trade relations at a much faster speed.

Voice of IndustryKCCI urges Spanish envoy to invite investors: President, Karachi Chamber of Commerce and Industry (KCCI), Muhammad Haroon Agar has urged the Ambassador of Spain, Javier M. Carba-josa Sanchez to invite Spanish investors to invest in renewable energy solutions in Pakistan as Spain is one of the world’s leading countries in the development and production of renewable energy and Pakistan is energy-hungry and desperately needs energy on war- footing. The Spanish envoy said that to attract investment, safety, political stabil-ity, infrastructure and utilities are of prime importance.

REAP enumerates benefits of trade with India: Rice Exporters Association of Pakistan (REAP), appreciating government’s decision to allow trade with India, has said that India being a market of around 1.3 billion people offers bright prospects for food and agricul-tural products. The REAP Chairman, Ch. Samee Ullah, however, criticized bureaucracy for not involving stakehold-ers into the negotiation process.

Mr, Siraj Kassam Teli, Chairman, Business-men Group and former President of the Karachi Chamber of Commerce & Industry is seen presenting Chamber’s Crest to Mr. Imran Khan, Chairman, Pakistan Tehreek- e-Insaaf (PTI) at the Presentation on Economic Road Map for the Revival of Pakistan’s Economy, at Aiwan-e-Tijarat. Mr. Jehangir Tareen, is also seen in the picture.

KCCI urged Romania to invest in Pakistan: Talking to the Ambassador of Romania Emilian Ion, Karachi Chamber of Commerce and Industries President Haroon Agar said that Pakistan offers attractive packages to Romanian investors for increasing capital inflows just as it happened in the past through their comprehensive technical offers in oil-refining, cement factories, power equipment, food, metal and wood processing in machinery, agricultural machinery etc.


BRIEFS


KCCI officials including Mr. Naeem Qureshi, Mr. Ateeq ur Rehman, Mr. Kaleem Siddiqui and Engr. Nadeem Ashraf and others at the “Fire & Safety Convention and Award 2012, at local hotel.

Small traders seek clean-up operation against criminals: Small traders on December 13 showed deep concern over a sharp rise in bomb attacks at shopping centres, saying the government’s pathetic policies helped grow violence in the city since 2008. They urged the government to begin clean-up operation against the criminals in the city.

SBP should reduce mark-up to 8pc: The Lahore-based business community has termed 50-basis point cut in the mark-up by the State Bank of Pakistan as insufficient and demanded further reduction to bring it down to 8 percent.

PAAPAM urges govt to extend 5pc levy on tractors to 1 year: The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has urged the government to extend the reduced levy of 5 percent on tractors sale for another year with a view to sustaining manufacturing growth, which is under serious threat of closure due to gas supply suspension and long hours of unan-nounced power loadshedding in Punjab.

Textile industry demands reduction in interest rate: Textile industry has report-edly demanded reduction in interest rate by 250 bps to 7.5 percent in the forthcom-ing monetary policy as growth of Large Scale Manufacturing (LSM) sector is stalemate due to shortage of investment.

APTMA to protest against energy crisis: All Pakistan Textile Mills Association (APTMA) has decided to protest strongly against the severe energy crisis, especially in the province of Punjab where 80 percent of textile industry exists and passing through electricity and gas supply shortages.

All Pakistan Anjum-e-Tajran President and former MNA from Faisalabad, Mian Abdul Manan visited Islamabad Chamber of Commerce & Industry (ICCI) for a meeting with Mr.Saeed Ahmed Bhatti, Vice President of ICCI. Speaking on the occasion, Mr.Saeed Ahmed Bahtti, Vice President of ICCI said that traders of Federal Capital were facing many problems which should be solved on priority basis by the Government. He said that a balanced Rent Control Act in Islamabad would greatly reduce and resolve the rental issues of traders of the Federal Capital.

Anti-dumping duty on polyester yarn opposed: The textile sector has expressed hope that anti-dumping duty on polyester yarn will not be imposed as importers have already to pay 6 percent import duty on it, which is not refunded even after exports. Chairman, All Pakistan Mills Association, Ahsan Bashir, said that globally 55 percent of the fiber used by textile companies as important raw material is manmade while only 45 percent of it is made from cotton. In Pakistan, 75 percent of fiber used in textiles is made from cotton. He said “we want to come at par with the world but are constrained by the incorrect government policies that are affecting local textile market.”

FPCCI wants to promote Pak-Canada business relations: Sheikh Haroon Rashid, Vice President FPCCI stated that FPCCI wants to further promote and strengthen the economic relationship particularly through developing trade ties with Canada. He said this during a meeting with Mr. Jawad Qureshi, Analyst, South Asia, Government of Canada, Privy Council Office and Mr. Uday Sequeira, First Secretary (Political), Canadian High Commission Islamabad, held at FPCCI in Karachi. Mr. Uday Sequeira highlighted the importance of frequent exchanges of trade delegation as a tool to strengthen people-to-people contacts between the two countries. He said that he found the Pakistani people very open, forthcoming and hospitable.

APTMA criticizes SNGPL for suspending gas supply to textile indus-try: The All Pakistan Textile Mills Associa-tion (APTMA) Punjab Zone Chairman, Shahzad Ali Khan has criticized the Sui Northern Gas Pipelines Ltd (SNGPL) for suspending gas supply to the textile indus-try for an indefinite time period, saying that it was an anti-industry and anti-worker action and detrimental to country’s exports. He urged the government to direct the SNGPL to resume gas supply to textile industry without any delay to save the country’s exports and employment at large.

New Trade Policy: Pakistan Industrial and Traders Association Front (PIAF) has urged the Federal Commerce Minister to finalise new Trade Policy in the light of business community suggestions and proposals to make it more meaningful and acceptable to the stakeholders.

Govt urged to devise Leather Develop-ment Plan: Chairman, Pakistan Tanners Association (PTA), Agha Saiddain, has urged the government to devise a ‘Leather Development Plan’ providing a level playing field for enabling the local leather industry to compete internationally that has potential to double existing leather and leather-products exports. He said that Pakistan is second quality leather producer in the world after Italy but could not tap its potential mainly because of lacking prudent approach on the part of govern-ment functionaries. China, India and Bangladesh are witnessing respectively 46.67 percent, 40 percent and 17 percent growth in leather sector export as compared to Pakistan whose exports have declined by 14 percent.

Govt urged to reduce mark-up rate: Chairman, Pakistan Bedwear Exporters Association (PBEA), Zain Bashir on December 8 said that with a view to augmenting the country’s export of bedwear textile, the government should reduce the mark-up rate and high cost of inputs to enable the local manufacturers to compete with India, Sri Lanka, China and Bangladesh on world markets.

FPCCI upbeat on improved intra-regional trade expectations: Director, Pak-UK Business Council and Chairman, FPCCI Committee on Health has said that intra-regional trade would get a boost when government reduces trade barriers towards the end of December 2012. It will bring a major change in the region, which will have a positive impact on the lives of tens of millions of people, he added.

Voice of Industry

Editor’s note

The Quaid’s vision of PakistanThe sunset on the 31st of December marks the end of the year 2012 heralding the world into the new year. From Pakistan’s point of view, the year gone by was eventful and turbulent in terms of loss of life and property. Let us hope and pray that the new year would usher us in an era of peace, progress and prosperity. The establishment of Pakistan is a remarkable achievement of Quaid-e-Azam Mohammad Ali Jinnah. With his multifaced qualities of leadership, he changed the course of history and created Pakistan as a new state where the subcontinent Muslims could enjoy and advance their socio-cultural identity, profess their religious beliefs freely and independently, exercise their rights and protect their interests. To build up his case for Pakistan as a separate country, the Quaid had to contest at three different fronts-- the British who were not convinced with the idea of dividing India, the Congress leaders who opposed the partition of India based on the Muslims’ ‘Two Nation Theory,’ and some of the Muslim groups who, perhaps on instigation of the Congress, were against the demand for establishment of Pakistan. The Quaid-e-Azam succeeded on all these fronts.By nature, the Quaid was cool and calculated and always looked for a compromise solution in case of controversies and was willing to accommodate others’ viewpoints without compromising on the principles he cherished and considered inviolable. Disappointed by the attitude of the British and the Hindus towards the Indian Muslims, Jinnah was convinced that Hindus and the Muslims could not co-exist in undivided India. Therefore, while convincing the British and the Hindus for division of India into two independent nation sates, he devoted his whole-hearted concentra-tion to creating consensus among the Muslims for achieving a separate homeland for them. He articulated the Muslims demands and aspirations so forcefully and effec-tively that it helped him gain full confidence of the predominant majority of the Muslims in his leadership for steering them out of the morass. Thus Pakistan appeared on the world map as an independent country on 14th August 1947. From his various speeches and statements it is evident that the Quaid had envisioned Pakistan as a modern democratic state that draws its inspirations from the teachings and principles of Islam as one of the sources in running the affairs of the state. He stood for constitutionalism, democratisation, the supremacy of the rule of law, socio-economic justice, religious tolerance and non-discrimination of the citizens of the state on the basis of religion, cast or creed. In his address to the people of Australia in February 1948, the Quaid-e-Azam is reported to have said that “Islam demands from us the tolerance of other creeds and we welcome in closest association with us all those who, of whatever creed, are themselves willing and ready to play their part as true and loyal citizens of Pakistan.”What we see today is unfortunate; we have drifted away from the Quaid’s vision of this country. Corruption, violence, terrorism, targeted killings, street crimes, extor-tion, loot and arson, and evils of the sort are the hallmark that have pushed the coun-try economically backward. More than 2200 people were killed during 2012 in Kara-chi alone. These events call for soul searching.As we enter the New Year we need to revisit the Quaid-e-Azam’s vision and ideals of Pakistan, imbibe them and try to rebuild the country accordingly. In his efforts to achieve Pakistan, the Quaid-e-Azam had dreamt of a country that would be based on an egalitarian modern democracy that offers equal opportunities to all to live a happy, prosperous life. We need to fulfill the Quaid’s dream if at all we wish to survive and sustain in the comity of nations with pride and honour.


n December 8, Maulana Fazlur Rehman, chief of Jamiat-ul Ulema-e-Islam (JUI-F) faulted the Supreme Court (SC) for what he called its ‘undem-ocratic’ judgment in the case that thoroughly examined the

law and order scenario prevailing in Balochistan and came to the conclusion that Balochistan’s government had failed in meeting its obligations in this area. Addressing a press conference at the conclusion of JUI’s 2-day Central Executive Committee meeting, JUI-F chief said that he could not comprehend the SC verdict regarding the constitu-tional status of Balochistan government and advised the SC to refrain from interfering in such matters because it was the peoples' right to elect or reject any government, or a political party. According to him, "such a decision should be left to the people of Balochistan." Thereafter, he said something which was far more amazing. He said that judges were not ‘supposed’ to contest elections (i.e. for publicity); it is the politicians who do that, and "will be facing the people".Maulana Fazlur Rehman isn’t the first politician to fault the SC and demand that its verdicts should be ‘democratic’, that is, they should not fault the in-power political regime for its failures. This demand is a new invention–the product of the sort of democracy we now have in Pakistan wherein all the issues must be decided, not on their merits, but on how they help support the regime in power, impliedly, to win the next election and perpetuate its flawed governance. What is odd though is the fact that such a demand has been made by a religious stalwart who should be concerned more about court verdicts being based on facts and realities rather than their acceptability to an in-power regime, which is what the edicts of Islam teach us all. This is the first time that a religious leader has ‘advocated’ that court verdicts be based on popular majority vote rather than ground realities. To his embarrass-ment, only a day later, NAB’s Director General in Balochistan told a press conference that at least six ministers of Balochistan government were being investigated by NAB for their alleged misconduct in handling the affairs of their respective ministries. That is not all; in early December, there were reports that a hefty amount of Rs 48bn, spent by Balochistan government, was unaccounted for and the Balochistan Chief Minister had instructed his cabinet ministers not to appear in the hearing on the issue called by the Public Accounts Committee. This isn’t the only report about such events in Balochistan; earlier a press report (not denied by the Balochistan government or the federal government) said that Rs 152bn, spent by MPAs of Balochistan on ‘development’ projects in their respective constituencies, also remained unaccounted for. This was hardly the setting wherein JUI’s Chief should have opted to advise the judiciary on what it should be doing and what it should be avoiding. Yet, he chose to do so, reflecting the mindset of Pakistan’s many self-proclaimed democracy lovers– the clan that is democracy’s worst enemy.

After telling the SC what it should do and not do, he shifted his focus on Lahore High Court's verdict on building of the Kala Bagh dam. He rightly said that it was a technical and not a politi-cal issue, but added that the court’s verdict won’t ‘serve’ this project. Hopefully, he didn’t imply that judiciary can’t hear cases involving technology since they don’t have technical knowl-edge. But if that is what he implied, which is what one may conclude from this remark, the Maulana was defining yet another limit that the judiciary must not cross.What he didn’t opt to define as bluntly, as he did in the case of judiciary, was whether our ‘vociferous’ parliamentarians have the requisite technological know-how to decide on the fate of the Kala Bagh Dam? So far, what parliamentarians in Sindh and Khyber Pukhtun Khaw have done, is to overrule the decision of the Council of Common Interests (CCI) that has raised a crucial unanswered question: can the parliament overrule the CCI, and if so, how should it go about it?Pakistan’s parliamentarians–many of them holding a variety of distinctions like fake educational certificates and degrees, foreign nationalities, undisclosed assets abroad, and cases of their alleged (in many cases, also proven) roles in corruption – are quite an ‘admirable’ lot. Now it seems they are striving to earn yet another such distinction – revise the constitution of the country to allow for justice being dispensed on the basis of popular vote. What they appear far less concerned about is the undeniable truth that, courtesy corruption in state offices and pervasive tax evasion, the escalating fiscal deficit is widening the gaps in the country’s physical infrastructure (the widest being in the power generation sector) and the depreciating exchange value of the Rupee is making things worse because this setting has already forced many businesses to shut and thus pushed unemploy-ment to dangerous levels. They are not concerned over the rapid slide in Pakistan’s credit, sovereign risk, and transparency ratings that are distancing Pakistan from global market access. Yet the parliamentarians seem hopeful about winning the elections scheduled for May 2013.Terrorism–the biggest single negative that is driving foreign businesses away from dealing with entities in Pakistan–is the outcome of rising poverty that is rooted in denial and gross neglect of the under-privileged, by a bankrupt (and corrupt) state administration, as well as by that element of inflation which is ‘engineered’ by the trading community. You rarely notice a parliamentarian backing the drive for expanding the tax net (unless the target is a political adversary) or including self-regulation in the code of ethics of the many chambers of trade and industry and trade associations in Pakistan.The immoral and self-serving mindset of the politicians has inculcated a trend for defying the law. The politicians don’t realize that, over time, it will make governance of the state a near impossibility, and the mantra that everyone will recite will be “everyone for himself and God for us all”.

O

EDITORIAL

Everyone for himself and God for us all

Congratulations:It had been a delightful experience to go through Value Chain (November 2012 issue). It is rich in form and content, appearance and reality. It serves the basic purpose of commu-nication: to inform, to persuade and to entertain. It is refreshing and motivating. It will not only be welcomed in business world but also in economic and social circles because it has a general appeal, and, probably, there is something for every reader. Variety is its hallmark. It offers ideas and ideas control the world. A great idea is a great discov-ery. Ideas help us advance in every field of life; enkindle the fire of struggle which leads to change. We cannot progress without change. Therefore, through Value Chain, go on spreading new ideas and contrib-ute towards making the society more harmonious and dynamic.I congratulate you on bringing out such a flowery, spicy and useful maga-zine. It is your service to the nation.In the end let me share with you a few words on business; A business with-out profit cannot exist, but a business without a higher purpose has no life.Prof. Miskeen Ahmad MansoorHyderabad.Suggestion for further improvement:I am a regular subscriber of Value Chain which I find interesting and informative. ‘Global and national briefs’ and ‘Voice of Industry’ are useful contributions as they give a birds’ eye view of news and views in Pakistan and abroad at a glance. The editorials and articles cover a wide variety of subjects. I suggest if possible please also include in the magazine

sections on Profiles of important personalities who could serve as role model for others to follow, and Indus-try SWOT Analysis. These additions might add value to the contents of the magazine.Shamsul HaqueIslamabad

De-weaponization:Your editorial on De-weaponization (December 2012 issue) is a true reflec-tion of the people’s sentiments; a regime with a conscience alive must accept its failures and opt out of the office. Country-wide deweaponiza-tion and change of ‘policies that have been fuelling militancy in the country’ are important for restoring peace and order but this is not the right time when the next general elections are around the corner. The editorial rightly maintains that any such move ‘will create grounds for imposing country-wide state of emergency to help the regime stay in power, most likely, for an indefinite period.’ Safdar ZaidiLahore

Financing Infrastructure: Importance for socio-economic development:The title and the cover story of Value Chain (December 2012 issue) are attrac-tive and impressive. The author has quite elaborately dealt with the need and importance of infrastructure development for ensuring socio-economic development. As rightly mentioned, infrastructure is the main-stay of the country’s economy while infrastructure assets are vital for economic and social activity. Inad-equate physical infrastructure has been ‘one of the critical reasons for holding back more rapid economic growth ‘ in Pakistan. The author’s view that infrastructure development should be combined with other factors such as good governance and law and order situation carries weight. One hopes that the authorities concerned will give thought to it.Naila MasoodQuetta

Karachi: a mega city without a viable public transit system:The article is a reflection of the prob-lems of public transit system the city lacks to meet the growing needs of the ever increasing population. It is unfortunate that the planning agen-cies have failed to realise and make successful efforts to develop and manage the urban infrastructure to meet the growing requirements of the commuters. The suggestions in the

ow craving for freedom can be a self-damaging tendency has rarely been proved as emphatically, as is the case now. In today’s Pakistan freedom implies defying the law as being manifested by all and

sundry; you only need to form a group to frighten the state into submission because the state – as heartless and twice as clueless – listens only to this profile of demand. That we are fast becoming a failed state occurs to no one, much less to the institutions that should be worried about this trend.What makes this developing scenario extremely worrisome is the fact that this chaos is being caused by well organized outfits–the associations of physicians, nurses, lawyers, transporters, CNG station owners, traders and retailers. They all directly impact daily life routines of hundreds of millions of Pakistanis, and that is what builds the harrowing prospect of a total collapse of the society.Abduction of one doctor or assumed fall in the purchasing power afforded by doctors’ and nurses’ salaries is sufficient for them to stop their critical life-saving services for days at a stretch. On the one hand lawyers despise delays in settle-ment of cases because of both, shortage of judges and flawed legal processes, but don’t find anything wrong with going on strikes; transporters don’t care about the negative impact of delayed shipments of much needed export orders or loss of this business completely, or rotting of the goods in trucks parked for days on the highways; CNG station owners don’t care one bit about the misery caused to millions by closure of their stations. This chaos is made worse by traders and retailers, who shut shops even on issues such as a valid FBR demand to display NTN Certificates on their premises. But, the worst part is the state and politicians’ defiance of court orders and verdicts – the latest by the MQM. This scenario portrays a total lawless society but none seems bothered about what this image holds out for the future. In civilized societies, the common belief that induces a rational behaviour is that “one’s freedom ends where ends the tip of his nose; beyond that begins the freedom of other humans.” We, on the contrary, believe in a setup that offers an arena –a ‘free for all forum’ – the worst environment, in which any society can expect to survive for days, let alone years. This environment develops if, for a sustained period of time, the state fails in its obligation, firstly, to ensure a reasonable standard of living for the majority and secondly, doesn’t allow the law enforcement strength to grow at a rational pace with the rise in population to ensure that citizens realize that they must abide by the law; any change therein must be sought by adopt-ing the legal course, neither defiance nor organized chaos. Successive Pakistani regimes failed to take steps that could raise the majority’s standard of living or up-grade the law enforce-ment capacity. This combination was the recipe for the build- up of suicidal flaws in the society that we now face, and are condemned globally therefor.

The real unfortunate part is that, those who can mend these flaws are not willing to do so, because they all suffer from a disease called “politicking”. They make faulting the judiciary for its ‘activism’ a common cause but don’t look inside their shirts to see that this activism is entirely the result of failure of the state in delivering on its obligations, especially cutting resource waste, and rampant corruption of practically every shade that is causing peoples’ miseries to escalate to a point, which can fairly be termed as “explosive.” In December 2007, Prof. Michel Chossudovsky (University of Ottawa) quoted a 2005 CIA and US National Intelligence Council (NIC) report that forecast a "Yugoslav-like fate" for Pakistan predicting it to become a “country raven by civil war, bloodshed, and inter-provincial rivalries" in a decade. Accord-ing to that confidential report, Pakistan was ‘slated’ to become a "failed state" by 2015.What was more frightening in that report was a reference to a concerted effort to malign the Army to demoralize and incapacitate it thus limiting its role in containing the chaos that will be ‘escalated’ over a decade to destabilize Pakistan. That trend is clearly visible; a part of the media too is overly busy in tarnishing the image of the Army, and its adverse commentar-ies haven’t been reprimanded by any state office-holder. If Pakistan’s political leaders didn’t note this build-up and the way it has continued, it reflects poorly on their competence to safeguard the sovereignty of Pakistan. And if they noticed it, and yet did what they did beginning 2005 (more so since March 2008, when the country became what politicians call ‘real’ democracy), it is a shocking portrayal of its much-touted sincer-ity and loyalty to Pakistan.While Pakistan’s stability is at stake, courtesy an escalating social chaos caused by rising inflation, which is the combined result of mismanagement of the economy by the government, and corrupt pricing practices in all consumer markets that are expanding the gulf between the rich and the poor, politicians are busy denying the fact that their majority does not pay income tax. After publication of the report exposing this reality, FBR officials were taken to task for sharing FBR data with the media, but no politician regretted his conduct.It is unbelievable that politicians in a civilized country would obstruct or oppose de-weaponization of the society if there are indications that a sizeable section of its population holds un-licensed weapons that have been acquired from criminal outfits operating on the instructions of foreign elements. It is only in Pakistan that political parties blatantly oppose de-weaponization in spite of courts condemning them for their total failure in containing organized crime and anti-state acts committed by a class of citizens. It is in these circumstances that commentators are justified in classifying such criminal outfits as ‘private armies’ within political parties. Is this what ‘real’ democracy must deliver? There can hardly be a worse way of defaming democracy.

H

EDITORIAL

Is anarchy the promise of the future?


Iran claimed captured US drone: The naval arm of the Iranian Revolutionary Guards said in a statement on its website Sepahnews.com on 4 December that "the unmanned US drone patrolling Persian Gulf waters, performing reconnaissance and gathering intel, was captured as soon as it entered Iranian airspace”. US Navy denied the Iranian claim.

Turkey to keep buying gas from Iran: Turkish Prime Minister Tayyip Erdogan has said that Turkey will continue to buy natural gas from Iran despite the prospect of tighter US sanctions. He said that gas imports from Iran were vitally important for Turkey which depends heavily on imported energy.

Egypt’s Morsi caves in; scraps immu-nity decree: A concession offered by President Mohamed Morsi by scrapping immunity decree failed to placate oppo-nents who accused him on December 9 of plunging Egypt deeper into crisis by refusing to postpone a vote on a constitu-tion shaped by Islamists.

Russia and China block UN resolu-tions against Assad: Russia and China blocked UN resolutions against Bashar al-Assad, saying they oppose foreign intervention in the conflict. Meanwhile, Washington and its NATO allies, who have thrown their weight behind the opposition, are pressing for Asad’s depar-ture to end the conflict in Syria. Russia has dismissed speculation that it is preparing for its ally’s possible exit from power.

US blacklists Qaeda-linked Syrian rebel group: The United States on December 11 blacklisted and designated the radical Syrian rebel group “Jabhat al Nusra”, an important element in the opposition struggle, as a foreign terrorist organisation and said it was trying to hijack the rebellion on behalf of al- Qaeda in Iraq.

Syrian jets fired rockets at Palestin-ian camp in Damascus: Syrian fighter jets bombed the Palestinian Yarmouk camp in Damascus on December 16 killing at least 25 people sheltering in a mosque. Yarmouk camp has steadily been drawn into the conflict in Damas-cus over the past month.

Israeli foreign minister quits after indictment: Israeli Foreign Minister Avigdor Lieberman, a key ally of the premier, resigned on December 14 after having been charged with breach of trust, barely five weeks ahead of general elections.

Iran warns against Patriot deploy-ment on Syrian border: Iran’s army chief of staff warned NATO on December 15 that stationing Patriot anti-missile batteries on Turkey’s border with Syria was setting the stage for world war. He called on the Western military alliance to reverse its decision to deploy the defence system.

Hillary Clinton says countries should meet Afghan funding pledges: US Secretary of State, Hillary Clinton said in Brussels on December 5 that it was crucial that NATO allies stick to their commitments to fund Afghanistan’s security forces after Western forces end their combat role in the country in 2014. Afghanistan’s foreign backers had pledged $4.1 billion per year to fund Afghan security forces after 2014 but there have been concerns expressed that austerity–hit European countries may not be able to meet their commitments.

US military to keep strong presence in Middle East: Defence Secretary Leon Panetta said on December 11 that the US military will retain a “strong presence” in the Middle East despite a strategic shift to Asia. Panetta said that the United States plans to deploy a majority of its naval fleet to the Asia-Pacific along with other advanced weaponry but a robust Ameri-can force would remain in place in the Middle East.

Chavez suffers new complications in his cancer surgery: Venezuelan Presi-dent Hugo Chavez, who is recovering from cancer surgery, has suffered "new complications," according to Vice Presi-dent Nicolas Maduro. Chavez, age 58, has not disclosed what type of cancer he has, and the Venezuelan government has released few details about his illness, fueling widespread speculation about his health and political future.

Victory bolsters Modi’s chances of India premiership: Controversial Hindu national-ist Narendra Modi secured a landslide poll victory in the Indian state of Gujrat on December 20, firming up his chances of running for prime minister in 2014.

Former Marine released from Mexi-can prison: A former U.S. Marine Jon Hammar, aged 27, who suffered for more than four months in a Mexican prison in the border town of Matamoros, just across from Brownsville, Texas on a questionable gun charge was freed to spend Christmas with his family after U.S. politicians inter- vened for his release.

Argentine government blasts farm-ers’ strike: Argentine Agriculture and Livestock Minister Norberto Yauhar accused farmers who organized what proved to be a very effective 24 hours livestock trading strike on 26 Dec, of responding to ‘political interests’. The farmers’ Liaison Board said they are considering extending the protest to other economic activities.

EDITORIAL

BP’s Monetary Policy announcement on December 14 was a bit of a surprise for some observers because SBP opted to cut its policy rate by another 50 basis points, citing a reduction in consumer and core inflation

indices as the logic therefor. The reduction in SBP’s discount rate is in line with the reported fall in non-food and non-fuel core inflation index, which came down from 10.2 to 9.7 percent. But this logic is questioned by observers for more than one reason. Non-partisan market observers fault SBP’s monetary policy for two reasons: first, in a country like Pakistan, should non-food and non-fuel core inflation index be the yardstick for determin-ing SBP’s policy rate and, second, do the inflation indices posted by Pakistan Bureau of Statistics (PBS) reflect market reality or suit the government’s public image needs? During 2009, while answering to a select committee of the US Senate, Federal Reserve Bank Governor Ben Bernanke was asked “why is the Fed’s discount rate aligned with core inflation index, and not consumer price index?” In response he said that interest rates cannot be aligned with an inflation index that includes goods and services whose prices change too often, because that could destabilize the entire financial system. He was right because doing so would destabilize the markets and create huge opportunities for the speculators to benefit at the cost of the society, and thus expand the rich-poor gap. This logic makes sense only if, as a percentage of the total expenditure of the vast majority in a country, food and fuel constitute a minor share. This no longer is the reality even in America, given the large-scale unemployment, and rising poverty, far less in countries like Pakistan where over 80% of the people spend between 30 to 75% of their incomes on food and fuel. PBS-generated inflation indices have lost their credibility. According to them, as of November 2012, on a year-on-year basis, CPI was 6.9 percent and food inflation dropped to 5.3 percent. How many of us believe these estimates to be true is not worth asking; that lot is only a handful, most of them in the ranks of the political parties that form the ruling coalition. In a period close to the elections, it is only ‘wise’ not to question such attractive inflation estimates.Yet, the business community that pays zero attention to its role in fuelling inflation, or to incentives that are necessary (positive real returns to savers) to increase domestic savings, is unhappy because it wanted the SBP discount rate to be cut by a hefty 200 basis points. Statistics quoted in SBP’s monetary policy clearly show that weighted average real rate of return being paid on savings is ‘negative’ 4.11 percent per annum; this negative return isn’t the incentive for domestic savings to go above their current pathetic level. It is not odd that we have the lowest (9 percent) savings to GDP ratio in South Asia region–a big ‘nega-tive’ that made Pakistan overly dependent on external borrow-ings that are hard to get, and the existing load of repaying them

is now beyond Pakistan’s capacity. The monetary policy itself admits that “The overall stress in the external position, however, is increasing given declining financial inflows and substantial debt repayments. Led by direct and portfolio investment flows, the total net capital and financial account inflows are on a declining path for some years……. these inflows have come down from a peak of 7.2 percent of GDP in FY07 to 0.7 percent of GDP in FY12…… during the first four months, there has been a net outflow of $304 million”. Since February 2012, Pakistan has repaid only $2.52bn to the IMF; it has to repay $6.12bn more beginning February 2013 until September 2015.That aside, the monetary policy included an observation that surprised many. It said “the persistent energy shortages have already decreased the utilization of productive capacity of the economy. Resultantly, output gap – difference between aggre-gate demand and the ability of the economy to meet this demand is now almost negligible” implying thereby that supply now equals demand. Is that really so? Or is this logic being offered to justify a PBS-manipulated drop in inflation indices to help the in-power regime in an election year?In its November 21 post-programme monitoring discussion with the Pakistani delegates for exploring the possibility of ‘Exceptional Access’ under its 2008 Stand-By Arrangement, IMF had emphasized on the need for minimizing ‘monetary accommodations’–a covert reference to facilitating excessive government borrowing, at progressively lower interest rates. IMF had also warned that, given the current trend in Trade and Balance of Payment deficits, and the expected drop in official exchange reserves to $7.38bn by mid-2013, sustaining the exchange rate of the Rupee could prove tough, with grave implications for inflation, which could again rise to a low double digit figure. That this will happen, is no more an uncer-tainty. In this scenario, cutting the policy rate is odd. According to the monetary policy, lower interest rates could potentially affect credit demand, including that for imports, and return on Rupee denominated assets relative to foreign currency assets, but then said “the first consideration is not a source of concern at the moment, given the weak overall credit conditions and consistent decline in the quantum of imports. The second consideration is important, and puts a natural limit on downward adjustments in the interest rate. However, it has to be weighed against the expected budgeted foreign inflows, which are not linked to the interest rate, but can boost much needed financial inflows.”These hoped for ‘inflows’ are the proceeds of auctioning G3 telecom licenses and realization of the dues from CFS, but timing of both is uncertain, courtesy bureaucratic tangles. That aside, the key issue consistently ignored is taming of inflation to lower the policy rate on credible bases, to offer positive real returns to the savers; without higher domestic saving the future of Pakistan will remain as uncertain as it is.

S

Monetary Policy: itselection year version


27 killed in US school shooting: At least 27 people, including 18 children, were killed on December 14 when at least one shooter opened fire at an elementary school in Newtown, Connecticut. It was one of the worst mass shooting in US history.

China demands Vietnam to stop oil probe in South China Sea: China told Vietnam on December 6 to stop unilat-eral oil exploration in disputed areas of the South China Sea and not harass Chinese fishing boats. Vietnam held protests against China on December 9 after Beijing’s demand.

Afghan’s attack Iran consulate over alleged killings: Hundreds of angry demonstrators tried to storm the Iranian consulate in the western Afghan city of Herat on December 9 in protest at the alleged killing of Afghan immigrants by Iranian security forces.

Taliban to attend Paris Conference: The Taliban reportedly said on December 10 that they would attend a conference on Afghanistan in Paris but would not hold peace talks with Afghan government delegates or other groups. President Hamid Karzai has long sought peace talks with the Taliban, but the Islamists have dismissed his government as a puppet of the United States.

Park Geunhye wins South Korean presi-dency: Park Geunhye, daughter of a former military ruler, won South Korea’s presidential election on December 19 to become the country’s first female leader saying she would work to heal a divided society.

Japan’s new PM said no compromise on islands: Japan’s newly elected Prime Minis-ter Shinzo Abe said on Dec 17 that Japan’s relationship with China was important but there can be no compromise on the sovereignty of islands at the centre of a dispute with China.

Italy’s PM says he will resign in coming days: Italy geared up for early elections after Prime Minister Mario Monti said on December 9 that he will resign in the coming days and Silvio Berlusconi announced that he will run again for the sixth time in two decades.

Nobel laureates received prizes at Stockholm ceremony: The 2012 Nobel laureates in medicine, literature, econom-ics, physics and chemistry received their prizes from Swedish King Carl XVI Gustaf at a gala ceremony in Stockholm on December 10.

Germany expelled four Syrian embassy staff: Germany on December 10 expelled four employees of the Syrian embassy in Berlin, the foreign minister Guido Wester-welle said, as part of moves to further isolate the regime of Syrian President Bashar al-Assad.

Russia negotiates union with ex-Soviet states: On December 19, Russia sought to expand its influence over former territories during integration talks that Washington has cast as a bid to “Re-Sovietise” the region. President Vladimir Putin met separately with the leaders of Belarus and Armenia before engaging the head of resource-rich Kazakhstan about ways to more closely bind the neighbours' economies. He also attended a collective security meeting that resolved to create a Moscow led air defence unit that would focus its activities on the regions surrounding war-torn Afghanistan.

US concerned over Tibet violence: The United States has expressed concern over self-immolations in Tibet and called on China to let residents express their grievances freely following a spike in violence in the Himalayan region. Wash-ington also urged Beijing to talk with the Dalai Lama without preconditions and to allow journalists, diplomats and other observers’ unrestricted access to China’s Tibetan areas.

Mali PM resigns after being arrested: The Prime Minister of Mali, Cheick Modibo Diarra resigned on December 11, hours after he was arrested at home by soldiers acting on the orders of former coup leader Amadou Sanogo. The resignation plunges further into chaos the country which is already effec-tively split in two after armed Islamists linked to al Qaeda took over the north.

Sri Lanka defends China’s expansion in Indian Ocean: Sri Lankan Defense Secretary Gotabaya Rajapaksa has defended China’s increased naval presence in the Indian Ocean and rejected claims that it is a threat to regional power India. Addressing a gathering of naval delega-tions from 28 countries at the annual maritime conference in the southern city of Galle on December 13, Rajapaksa insisted that multimillion-dollar funding from China to Sri Lankan ports was purely a commercial interest.

Chinese intellectuals urged party leaders to disclose wealth: About 65 Chinese academics, lawyers and human rights activists have signed an open letter demanding that top members of the ruling Communist Party reveal their financial assets, saying it is the most fundamental way to solve corruption.

North Korea replacing faulty rocket stage: North Korea is replacing a faulty section of a long-range rocket in a bid to put its launch schedule back on track, and is receiving help from Iranian missile experts. The head of US Pacific Command said on December 6 that the United States has deployed naval ships equipped with ballistic missile defences and is monitoring North Korea very closely ahead of an anticipated rocket launch. Cambodian Prime Minister and ASEAN Chairman Hun Sen urged North Korea on December 10 to scrap its planned rocket launch as it would bring “fear and tension” to the region.

s done every year, on December 25, we remem-bered the Father of the Nation in a ritualistic manner, recalling a bit of the lot that he did for us, and that’s where the exercise ended; not many

recalled the golden principles he gave us–unity, faith and discipline–and regretted over the fact that we practice none of those values. Pakistan’s politics thrives on dividing the nation into ever-more fragments, without any concern about the consequences this gross mis-governance of the state will have. When confronted about this state of affairs, the politi-cians justify their own failures by pointing to the fact that their failures are not worse than those of the previous regime. This profile of politics is defended in the name of democracy. In the opening line of his remarkable book “Jinnah of Pakistan”, Stanley Wolpert wrote: “Few individuals significantly alter the course of history. Fewer still modify the map of the world. Hardly anyone can be credited with creating a nation-state. Mohammad Ali

Jinnah did all three.”The creation of Pakistan proved what unity, faith and discipline deliver. Today, to confront a hostile world, we need to be far more united and disciplined, with unflinching faith in ourselves as an indomitable nation. Jinnah wanted Pakistanis to show the world what unity meant–belief in the unity of human beings irrespective of their racial origins, religious beliefs, cultures and traditions, and recognize delivery capability as the ‘only’ merit that distinguished human beings. The tragedy is that our leadership did just the opposite–trample merit.Today, we pride ourselves in being Sindhi, Punjabi, Seraiki, Baloch, Pashtun, Mohajir, Shia, Sunny, Deobandi, Ahmedi, etc., not Pakistanis–a malaise that was fuelled by the state-created inequalities on ethnic and sectarian bases that began developing in the 1950s. ‘Unity’–the core value enunciated by the Jinnah–is to be found only in the books of history. The number of religious and ethnic parties, with virtually no representation in the parliament, that now dominate the political scene, manifests a refusal to imbibe the concept of ‘one-nation’–the biggest failure of Pakistanis as a nation.What we have is unrepresentative democracy that elevates only Chaudhuries, Rajas, Nawabs, Khan Bahadurs, Sardars etc., to power; suffering from eternal political shortsighted- ness, this lot with petty, indecent and self-serving ambitions practices its pre-partition culture of cronyism, which injects into the state administration lethal diseases like corruption, resource waste and greater social and economic inequalities.

The separation of East Pakistan was the bitter fruit of rising economic inequalities, and that too, blatantly. The height of this injustice was proved by the fact that, despite forming 56% of the country’s population, people of East Pakistan were forced to agree to being counted as 50%, courtesy the ‘parity’ principle. What this injustice led to was the tragedy of 1971. Within 17 years of its birth, Pakistan was reduced to half its size crystallizing Indian National Congress’s forecast about its break-up, and Pakistan also suffered its most humiliating military defeat to-date. But economic disparities kept escalating because the leadership remained focused on serving vested interests–a slide wherein Pakistan’s unwitting middle class had its share.

The assumption that the decent were obliged to ‘quietly’ shun the corrupt, and do nothing more, was a blunder on its part. What the middle class– which forms the vast majority of the nation–didn’t realize was that doing so, it was helping the corrupt. Now it has lost its faith in Pakistan, and is keen on migrating to foreign lands; this escapist tendency manifests the denial of this class to accept its fair share of responsi-bility and its failure to assert its weight in correcting the course of history.What now distinguishes Pakistan as a state is indiscipline, not discipline. Despite leading a freedom struggle all across India, Quaid-e-Azam was never found guilty of breaking any of the laws. He believed in disciplined protests that symbolized unity for a cause to induce people to support it, and non-violence was his key value.

Public demonstrations now portray destructive might; you must support the demonstrators, not because you also see merit in the demonstrators’ cause but out of fear of massive destructive might of the demonstrators. Demon-strators on their part consider it their right to kill and destroy anyone who dares to continue an economic activity; this is the most worrying part because we are turning into a self-destructive society, and frightening away even those who want to help us get out of the socio-economic mess our politicians have created over the years.Massive resource shortfalls of all varieties, sliding economic growth, pervasive corruption and defiance of the law, and violence on the streets have made Pakistan, a very high-risk country that is also close to bankruptcy. Isn’t it tragic that we sidelined Jinnah’s values–the values that elevate nations to the highest pedestal and make the world respect them? It is time we recognized this big failure, and made amends.

A

Trampled values,no regrets

POLITICS


by Khalid MZ

IMF, EU push for less drastic deficit cuts: The International Monetary Fund and European Commission officials have encouraged France and its eurozone partners not to fixate on deficit reduction targets if it would exacerbate the bloc's debt crisis. The head of an IMF mission in France, Edward Gardner, urged officials in Paris to consider their 2013 budget targets "in a broader European context." The IMF and the EU Commis-sion expect the French public deficit to amount to 3.5 percent of gross domestic product (GDP) next year.

IMF extends zero-interest rates for low income nations: The International Monetary Fund (IMF) said it has approved a two-year extension to the zero-interest rates charged on loans to low-income countries. The financial institution said the extension is part of a wider strategy to support concessional lending to poorer countries as they combat the effects of the global economic crisis. The move, approved by the IMF Executive Board, extends the waiver through 2014.

China’s economy may grow 8.2 percent in 2013: China’s economic growth, according to the Chinese Academy of Social Sciences, may quicken to 8.2 percent in 2013 from an expected 7.7 percent in 2012 in response to official growth-promoting policies, but downside risk remains from global uncertainties. The 8.2 percent GDP growth forecast is, however, contingent on the European debt crisis not worsening and the US avoiding a “fiscal cliff.” A US intelligence report said on December 10 that China’s economy is likely to surpass the United States in less than two decades while Asia will overtake North America and Europe combined in global power by 2030.

OPEC cartel to reap record $1tn: The Organization of the Petroleum Exporting Countries will reap more than $1 trillion in net oil revenue for 2012. The report said

Brent oil prices would average about $111.50 for the year, higher than the previous record of $110.90 set in 2011.

Analysts see 2013 Brent price around $110/barrel: Petroleum analysts are in consensus in forecasting Brent crude to average around $110/b in 2013. Geopo-litical tensions were generally considered the biggest threat to higher oil prices given the muted global economic growth anticipated for the coming year.

China lets foreign sovereigns, banks exceed $1bn investment limit: China’s foreign exchange regulator has removed the $1 billion limit for foreign sovereign wealth funds, central banks and monetary authorities buying Chinese assets through the Qualified Institutional Investor Prog- ram (QFII).

Ukraine says no to IMF loan in 2013: Ukraine has ruled out taking any money from the International Monetary Fund next year. In an interview, Ukraine’s Prime Minister Mykola Azarov criticised the IMF’s debt crisis measures as being ineffective in several European countries, and said they have even led to stagnation. The IMF mission planned to visit Kiev this month to discuss the agreement on a standby loan but the visit has now been postponed till mid January.

Federal Reserve Board proposed new rules to regulate US operations of foreign banks: The proposal would require foreign banking organizations with a significant U.S. presence to create an intermediate holding company over their U.S. subsidiaries, which would help facilitate consistent and enhanced super-vision and regulation of the U.S. opera-tions of these foreign banks. Foreign banks would also be required to main-tain stronger capital and liquidity positions in the United States, helping to increase the resiliency of their U.S. operations.

Belarus to reopen talks on IMF new program in spring 2013: Belarus is planning to reopen talks on the new loan program with the International Mon-etary Fund in the spring of 2013, Chair-person of the Board of the National Bank of the Republic of Belarus (NBRB) Nadezhda Yermakova said during the Q&A phone session with local journalists.

Japan’s economy contracted in July- September 2012: Revised government data showed on December 10 that Japan’s economy contracted for a second straight quarter in July-September, indicating that weak global demand nudged the export-reliant economy into a mild recession. Analysts expect another quarter of contraction in the final three months of this year due to sluggish exports to China, keeping the Bank of Japan under pressure to loosen monetary policy.

World Bank predicts 6.3 percent growth in Burma in 2013: The World Bank announced that Burma’s economy continues to grow and is expected to reach 6.3 percent in the fiscal year 2012- 13 despite the fact that the country has yet to realize its potential. In its bi-annual East Asia and Pacific Economic Update released on December 19, the World Bank said that the economies of devel-oping East Asia and the Pacific “remained resilient despite the lackluster performance of the global economy.”

World Bank lowers PNG’s growth forecast: The World Bank predicted slower growth for Papua New Guinea compared to the past decade. The bank reports economic growth at eight per cent for 2012, down one per cent on last year, due to a weaker currency and commodity prices with low rural and government incomes. The report predicted further marked slowing of growth in 2013 and 2014 with fewer new investments.


by A. B. Shahid

POLITICS

he latest findings of the US-based World Justice Project have ranked Pakistan as the seventh ‘most corrupt nation’ with one of the weakest and ineffec-tive system of accountability in the world, and

endorsed what the Supreme Court of Pakistan has repeatedly observed about this ongoing saga –the failure of the country’s crime investigative agencies. In this context, it is worth pointing out that even in April 2004, this saga was no less a threat to Pakistan and prompted a get together of the stakeholders to find ways of addressing it.I was one of the invitees, and as a part of the expert group that contemplated for two days on improving the taxation system to present its recommendations to NAB, participated in that conference. On my return to Karachi after this get together, I had penned down my perception of the fundamental issue that sustains a rise in corruption, despite all the efforts to contain it by the regulatory, supervisory, investigative and enforcement institutions including NAB, and advised Lt. Gen. Munir Hafiz (the then Chairman, NAB) my views.While the UN Conference on Anti-Corruption was a landmark event in more ways than one because the pervasive rise in corruption was brought to the fore in a befitting manner, the conference did not address the fundamental flaw–faulty school and college education systems–I had pointed to the fact that it will keep adding to the number of devious minds in spite of imposition of ever more-stringent anti-corruption laws. The exercise to instil integrity in human conduct has to be under-taken much earlier when the future managers of the state are at schools where the lasting contours of their personality are formed. As long as education systems that downgrade principles and values in favour of profit-oriented expediency–a trend rampant in the mushrooming business schools–remain intact, dangerously devious minds will keep coming out of these institutions to manage the state, business and industry. The code that needs urgent reform is the curricula taught at schools. This applies to every state, especially the big ones that indirectly influence all others, because they account for the bulk of the world trade. The events of 2002-03 were a rude shock because they unmasked the largest-ever number of crooks, fraudsters and criminals running some of the world’s biggest corporations whose failures had devastating consequences for their shareholders, employees and stock markets the world over. The disclosure shattered investor confidence at a time when it needed rapid revival to stem the recession that was engulfing the world. It was not appreciated that ethics, especially the critically important values of integrity and a sense of social responsibility, cannot be drilled into people’s heads at late stages in their lives, more so by governments which remain suspect in the eyes of the people for a variety of conduct unbe-coming the hallmark of which is their manifest disregard for maintaining equity between the rights and obligations of the citizens and the State.

Falling economic growth, rising unemployment, poverty, and terrorism speak volumes about the style of state governance all over the world. It has institutionalised inefficiency and corrupt- tion and led to economic chaos and pervasive lack of respect for the law. It has encouraged debasement of values, which is a slow process of death of the society as a whole. Yet, we punish only those who fall within the legal definition of murderers, but not the apathetic politician-bureaucrat-businessman mafia. Shouldn’t the law re-define killers? Shouldn’t it include those whose deliber-ate actions lead to widespread misery and consequent slow death of millions from poverty, deprivation and starvation?Our failure to redefine murderers is largely due to the gullibility of the media (including the Human Rights Commission) to the cold and faulty logic advanced by the politician-bureaucrat- businessman mafia to justify criminal transfer of advantage from the masses to the State and business and industry, who continue to misuse resources, especially cheap public savings. Does it bother anyone that small savers, who contribute the largest single chunk to bank deposit bases in any country, get a return that is way below the going rate of inflation? Doesn’t it amount to organized deception, and isn’t it the shortest route to spreading poverty among the largest section of a country’s population?We don’t seem to realize that, going by the recent record of politicians everywhere, democracy's chances are worryingly low because people have little trust left in them. Statecraft (Western democracies included) is now a decadent art. The sustained economic decline of Europe, US and Japan has shaken our belief in democracy. In the developing countries, politicians continue to treat the electoral constituencies as their ancestral property, turning them into private battlegrounds; their erstwhile cohorts in state bureaucracies lend a helping hand in weakening institutional arrangements only to enrich themselves at the cost of the people. It is this setting that bodes ill for whatever you may try to do to nab corrupt organizations and individuals. In a TV talk show, the sitting Chairman of NAB admitted the pressures he was experi-encing from the political circles, but emphasized the fact that anti-corruption outfits need to develop the capacity whereby it can prevent crime from taking place because catching a thief after he has committed a crime is a tough task requiring produc-tion of evidence that usually is well concealed. Besides, criminals escape abroad, courtesy violations of the ECL.

Post-scriptDuring that conference, I assisted in drafting of that part of the anti-corruption strategy, which was aimed at containment of tax evasion. This formed part of the conference brief that was later published by NAB. I had also arranged NAB’s contacts with Taseer Hadi Khalid & Co. as consultant for restructuring of NAB’s organizational setup. I don’t know how far it helped because NAB lost contact with me thereafter.

T

Corruption – the never-ending tragedy

World Bank private arm to issue bonds in African markets: The International Finance Corp, the World Bank's private sector arm, plans to issue local currency bonds in 10 African markets from next year to build capital in one of the world's fastest growing regions. Jingdong Hua, vice president and treasurer at IFC, said the group is looking at Nigeria, South Africa, Ghana, Zambia, Rwanda, Namibia, Botswana, Uganda, Kenya and the West Africa franc bloc. The bonds would be priced in the likes of South Africa rand, Botswana pula, Nigerian naira, Ugandan shilling or Zambian kwacha rather than the US dollar or euro, Hua told Reuters in an interview. The project could prove a boon to Africa which is growing on average at 5 to 6 percent a year and is eager to develop transport and power infrastructure.

World Bank said NATO pullout could hit Afghan development: Afghanistan is having trouble keeping hard-earned development gains due to looming security challenges when Nato military forces withdraw in 2014, an internal World Bank audit report revealed. The review said the Bank’s programs in the war-torn country had achieved “impressive results” in areas like public health, telecommunications and community development. However, it warned that “with the expected reduction of the international presence in 2014, sustainability of development gains remains a major risk because of capacity constraints and inadequate human resources planning on the civilian side.”

World Bank boosts Philippines anti- poverty project: The World Bank will lend $100 million to the Philippines to bolster a government scheme that helps millions of poor families give their children proper schooling and healthcare. The extra funding will mean 200,000 more households are given a monthly subsidy of not more than $34 in return for ensuring children under 14 go to school and get regular health checks. The government program already covers three million families, and has kept 7.9 million children in school while also requiring that pregnant mothers must receive proper care.

UK lawmakers call for tax crackdown on multinationals: A committee of UK lawmakers has reportedly called on govern-ment to crack down on multinational companies that make substantial sales in Britain but pay little tax, echoing demands from leaders across Europe for measures to tackle corporate tax avoidance.

Monetary stimulus Bank of Japan: The Bank of Japan delivered its third shot of monetary stimulus in four months on December 20, in a prelude to more aggressive action next year as it faces intensifying pressure from the country’s next leader for bolder action to beat deflation. It also signaled setting a higher inflation target at its next meeting in January, when a new government will be in place.

Weak US exports, imports signal tepid growth: The US trade deficit widened in October as exports suffered the biggest drop in nearly four years, indicating slowing global demand was spilling over into the already struggling US economy. The trade gap reportedly increased 4.9 percent to $42.2 billion while imports hit the lowest level in 1-1/2 years.

Islamic banking expansion aided by ADB: The Asian Development Bank (ADB) has provided a $750,000 grant to promote Islamic banking in Indonesia, Pakistan and Bangladesh. The money will be shared between those countries’ governments to help their banking systems to meet regulatory standards set by the Islamic Financial Services Board.

Mitsubishi Bank fined $8.6m for flouting US sanctions: Mitsubishi UFJ, Japan’s biggest bank has been fined US $8.6 million for flouting US sanctions on Iran, Sudan, Myanmar and Cuba.

Greece gets new EU aid: The eurozone agreed on December 13 to provide nearly 50 billion euros ($64 billion) in long-delayed aid to Athens prompting its Prime Minister Antonis Samaras to declare an end to talk of a Greek exit from the single currency.

Merkel sets limits on eurozone risk-sharing: European leaders agreed on December 14 to press on with further steps to tackle their debt crisis but German Chancellor Angela Merkel threw out a proposal to boost risk-sharing with a fund to help eurozone states in trouble.

Brazil’s economy grows by 0.6 percent in third quarter: Brazil’s economy grew just 0.6 percent in the third quarter of 2012 compared with the previous three months, signaling a weaker than anticipated recov-ery, the Brazilian statistics office, Institute of Geography and Statistics reported. The economy rose 0.9 percent in the July-to-September quarter compared with the same period of last year, and a mere 0.7 percent so far this year.

Banking deal boosts EU leaders in fighting crisis: European governments reached a landmark deal on December 13 that gives the European Central Bank new powers to supervise banks, boosting confidence in the single currency bloc as it enters the fourth year of its debt crisis. Under the deal, the ECB would regulate some 150 to 200 banks directly, mostly major cross-border lenders and state aided institutions, with the power to delve into all 6,000 banks in case of problems.

n December 27, PPP and Pakistanis observed the fifth death anniversary of Mohtarama Bena-zir Bhutto, who was assassinated this day in 2007. What is odd, however, is the fact that,

despite the PPP being in power beginning March 2008, the exact cause of her death, and the characters who are involved in her assassination, remain a mystery.According to the UN inquiry Commission, doctors who examined her body were of the opinion that she died of a severe head injury as she hit the edge of the roof opening of her vehicle. At the Rawalpindi General Hospital, Dr Qudsiya Anjum Qureshi cleaned Ms Bhutto’s head, neck and upper body. She saw no wounds other than the one to the right side of her head and the thoracotomy wound. She was next dressed in hospital clothing and her clothes given to her maid. The doctors stated that in their opinion there was no bullet mark on her head or her body. The doctors also didn’t see her dupatta, which was missing. Ms Bhutto’s death certificate was filled and signed by the hospital’s senior Registrar Dr Aurangzeb, who recorded the cause of death as “to be determined on autopsy”, but autopsy wasn’t conducted because Mr Asif Ali Zardari disallowed it. On December 30, speaking to the press he said “I have lived long enough in Pakistan to know how post-mortems are done.... I know the forensics reports are useless. We know what the wound is and how it was caused”, explaining his reasons for rejecting the official requirement of an autopsy, which left the real cause of Ms. Bhutto’s death unclear. Besides Rawalpindi hospital’s report, the UN Inquiry Com-mission as well as the Scotland Yard inquiry team also couldn’t say with certainty whether Ms. Bhutto was shot and killed. As per Scotland Yard’s video analysis, the flash of the bomb blast appeared just over two-thirds of a second after Ms. Bhutto disappeared from view.Ms. Butto’s burial, without the autopsy of her body, created many doubts. Although Mr. Zardari admitted his role in disallowing the autopsy, Interior Minister Rehman Malik said that post-mortem was dropped on the instructions of the police officer on duty or this contradiction created doubts about who prevented the autopsy. Nor has Rehman Malik explained where was he when Ms. Bhutto was return-ing from Liaquat Bagh–the venue of that unfortunate public meeting–when she was fatally injured.The investigation into this sad event too did not proceed at the pace it should have, though by February 14, 2008 police had arrested 5 suspects. The trial finally began on February 29; in November the Anti-Terrorist Court (ATC) framed the charges, and in the summer of 2009, the ministry of interiorappointed Chaudhry Zulfiqar Ali as special prosecutor. But in 2009, the federal government took over the investigation and the FIA formed a new Joint Investigation Team (JIT) to oversee the investigation, and in August 2009, the then

Deputy Attorney General and a member of the federal JIT requested the ATC to adjourn the case till the completion of FIA’s investigation. Later, FIA included in its challan then President Gen. (r) Musharraf, then Rawalpindi police chief Saud Aziz, and SP Khurram Shahzad Haider, both responsible for the security arrangements at the public meeting on Dec 27, 2007. But these two officers were arrested for their likely involvement in Ms. Bhutto’s assassination only in 2011–three years after PPP assumed power. Besides their delayed arrest, progress in the case was practically zero until October 10, 2010. How the proceedings were stretched is visible from the fact that until 2012, eight challans were filed. In 2010 the third challan (FIA’s first) was filed as late as May 25, the fourth on June 11, fifth on November 11 and the sixth on December 12. The seventh challans was filed on February 2, 2011, and the eighth and the last on June 6, 2012. That’s not all; 5 differ-ent judges headed the trial court since the case proceedings began on February 29, 2008.Yet the mystery remains unresolved, and gives rise to huge doubts about the political regime’s integrity because, since December 30, 2007, when Mr Zardari first spoke about Ms Bhutto’s assassination, PPP leadership has done much to confound the mystery. During that press conference, Mr Zardari referred to Ms. Bhutto’s email sent to Mark Siegel that indicted the then President, Gen. Pervez Musharraf because she accused him of non-seriousness about her security. Mr Zardari used the term ‘dying declaration’ for that e-mail because it nomi-nated her potential killers, simultaneously calling PML-Q as ‘Qatil’ League. Doing so, he repeated Ms Bhutto’s accusa-tions against Choudhury Pervaiz Elahi along with former ISI chief Lt. Gen. Hameed Gul, and the then IB chief Ejaz Shah, of planning her assassination. In addition thereto, the government hasn’t disclosed a harsh response it received to its objections over the UN inquiry report. That response had accused the government of protecting the conspira-tors.To the ordinary, Mr Zardari’s sincerity is rendered further doubtful because PML-Q (‘Qatil’ League) is now a partner in the PPP-led coalition regime, and Choudhury Pervaiz Elahi (allegedly a partner in the assassination plan), is now the deputy prime minister in the coalition government. In the election year, it may prove a deadly liability.

O

The 5 year longunresolved mystery

POLITICS


Pakistan’s defense requirements: At the 21st meeting of the US Pakistan Defense Consultative Group on December 4 both countries recognized the security require-ments on both sides of Pakistan-Afghanistan border and agreed to coop-erate on a prioritize set of Pakistan’s defense requirements.

Caretaker setup likely in January: PPP leaders and coalition partners have report-edly advised President Asif Ali Zardari to dissolve the National Assembly in January 2013 and install a caretaker setup for elections holding elections by mid April. The President is reported to have told them that election date was in his heart which he would share with his party and coalition partners at an appropriate time.

Mirwaiz urges linking MFN status to India with resolution of Kashmir dispute: Chairman, All Parties Hurriyat Conference, Mirwaiz Umar Farooq on December 19 urged Pakistan to link granting of Most Favoured Nation (MFN) status to India with its recognition of the rights of Kashmiri people.

India denounces 42 Pakistan terrorist camps: India’s Junior Home Affairs Minister Mullappally Ramachandran told the Indian parliament on December 4 that there were more than 40 training camps in Pakistan for militants who make regular attempts to cross the border between the two countries. He said that India has identified 25 camps in Azad Kashmir and 17 in other parts of Pakistan containing around 2,500 militants. He claimed that Pakistan- based militants with the support of Pakistan Army have made 249 attempts to sneak into Indian territory so far this year.

Parties with militant wings behind Karachi unrest: PML-N President, Mian Nawaz Sharif said on December 5 that the political parties with militant wings are involved in unrest in Karachi and are also part of the government. He called for collective effort for peace in the city.




TTP threatens to step up attacks on secular parties: The banned Tehrik-e-Taliban Pakistan has reportedly threat-ened to stage further attacks targeting political gatherings of the country’s secular Awami National Party and the Muttahida Qaumi Movement.

SC issues contempt notice to Altaf: Taking notice of the speech delivered by MQM Chief Altaf Hussain on Decem-ber 2, the Supreme Court has issued show-cause notice for explanation as to why he should not be proceeded against for contempt of court in accordance with the constitution and the law. According to reports, MQM Chief Altaf Hussain has said he has no plan to protest against the Supreme Court’s judgment, rather he would prefer to submit his reply in the court while living in the ambit of the constitution.

Pakistan wastes up to $72m a day- NAB: Chairman, National Accountabil-ity Bureau (NAB) Admiral Fasih Bokhari (retired) said on December 13 that Pakistan wastes a whopping $51 to $72 million every day as a result of ineffi-ciency, corruption and tax shortcomings. He said that the losses come from leaks, corruption and incompetence, tax losses, land grabbing, loans and defaults, over- staffing, energy losses, project delays, cost overruns, administrative costs and foreign exchange outflow.

Visa accord between Pakistan and India: India and Pakistan on December 14 sealed an agreement to ease tough visa restrictions for travelers as part of efforts aimed at rebuilding relations that soured in 2008 between the two nuclear- armed neighbors when militants attac- ked India’s financial capital.

NA passes Fair Trial Bill 2012: The National Assembly on December 20 passed the “The Investigation for Fair Trial Bill 2012” which is devised to give the government more powers to fight terrorism.

POLITICS


Free and fair elections in Pakistan:foreseeable as per schedule?

he general perception seen among the people today is that, seemingly our politicians in general have lost the credibility of whatever they say or commit. The President and the Prime Minister

have repeatedly expressed their government’s resolve that elections would not be postponed, that they would be held “on time,” and that they will be “free‚ fair and transparent.” Addressing a cabinet meeting in Islamabad recently, the Prime Minister said, “Holding free‚ fair and transparent elections is my top priority.” At a public gathering in Kot Najibullah, he reiterated this commitment by saying “This time, there will be no manipulation, and the voters will be able to exercise their free will to elect their representatives for the assemblies.” Despite these assurances, however, the political rumour mills are churning out continuously and vociferously the doubts about whether or not the polls would be held on time and that, if they are held at all, would they be credible, free, fair and transparent, as claimed. Recent political developments have further contributed to the creation of an environment of uncertainty which could be used as an excuse for postponing the elections. Address-ing a mammoth gathering at Meenar-e-Pakistan on Decem-ber 23, 2012 in Lahore, Dr. Tahirul Qadri, chief of Tehri-e-Minhajul Quran called for electoral reforms, and gave the government three weeks’ ultimatum to install an indepen-dent interim government in consultation with all the stake-holders including the army and the judiciary, which could hold fair and transparent elections within the stipulated 90 days, or more if so required, to meet all mandatory consti-tutional obligations in order to have an “honest, sincere and trustworthy” leadership capable of steering the country out of the crises under a real democratic system. At a time when the elections are round the corner, such a demand, though appreciable, is seen as untenable as it is improbable, if not impossible, to give it a practical manifes-tation in the short time left for the coming polls. The demand is seen in certain quarters as contradictory, and in conflict with the provisions of the Constitution of Pakistan. Although Dr. Qadri has repeatedly claimed that his agenda is not to postpone the polls but to facilitate fair and free elections providing for the election of honest and sincere leadership, can a government, which has not been able to introduce the desired electoral reforms in its 5-year term of office, be expected to do so in three weeks’ time? On the other hand, the Election Commission of Pakistan (ECP) has announced that political parties failing to have held their in-party elections in terms of Article 14 of Politi-cal Parties Order 2002 would not be allotted symbols to contest the elections. Some of the parties including PML-N, PML-Q, MQM, Jamat-e-Islami, Tehrik-e-Insaf and JUI, etc., did fulfill this requirement. However, of the

216 parties registered with the Election Commission of Pakistan, there are still around 136 parties that have not so far held their party elections. If the ECP is firm in imple-menting this requirement, it would mean that the 136 politi-cal parties would be kept out of the electoral process. In all fairness, the requirement should be met, but if such a large number of political parties are kept out of the elections, would it not lead to pointing of fingers on the fairness of the electoral process? If the ECP really means it, it should have taken notice of this outcome much earlier, and notified accordingly affording enough time for the political parties to hold their in-party elections.Regretfully, while reiterating that elections would be held ‘on time’, none of the government functionaries ever mentioned the ‘date’ on which the elections would actually be held although, constitutionally, the present assemblies would be dissolved by 16th March 2013, where after a caretaker government would be bound to arrange for hold-ing of the general elections in 90 days. The government’s failure in giving the exact date of the polls may be for what-ever reason, but it does lend strength to apprehensions about the government’s intentions. It is about time that a firm date of election is announced and arrangements made to ensure that election would not be deferred. Holding of elections is not a new phenomenon; it has its roots in the distant past when people in ancient Greece and Rome, and throughout the medieval period, used this route to electing their rulers. The modern system of "free, fair and transparent elections,” however, didn’t emerge until the beginning of the 17th century when the idea of representa-tive government took hold in North America and Europe. Yet, they were not representative because of the eligibility criteria attached therewith. Hence the rulers elected did not truly represent the people’s will and aspirations. The conduct of free, fair and impartial elections is vital for political integration which is inevitably important for survival of a democratic dispensation. Elections serve as a tool for the expression of people’s will to choose their representatives to hold public offices. Ironically, however, the history of elections in Pakistan has not been that enviable. Historically, between 1947 and 1958, the country did not have any direct elections at the national level. Provincial elections were held occasionally, but they too were not reflective of the will of the people. The provincial elections held in the then West Pakistan, were described as "a farce, a mockery, and a fraud upon the electorate."With the arrival of Gen. Ayub Khan on the political stage in 1958 came the system of Basic Democracy wherein the voters were required to surrender their rights in favour of some 80,000 representatives called Basic Democrats who chose the president and the members of the national and provincial assemblies. The first presidential election in Pakistan

Tby Jauhar Ali

Size of undocumented economy is expanding: Securities and Exchange Commission of Pakistan Chairman said on December 3 that the size of undocu-mented economy, which has developed a parallel economy, is expanding and to tackle the situation, the government is seriously concentrating on expanding the tax base and making all out efforts to raise Tax-to-Gross Domestic Product (GDP) ratio.

Indo-Pak trade normalization process appears stalled: According to reports, Pakistan-India trade normalization process appears to have hit snags and phasing out of negative list by December 31, 2012 as promised by Islamabad is in doubt.

Old cars age limit reduction may cost kitty Rs. 13.7 bn: The Federal Board of Revenue has reportedly estimated revenue lost of Rs. 13.7 billion during January- June 2013 on curtailing age limit of old and used vehicles from 5 to 3 years.

Commerce Ministry barred from issuing notification to reduce age limit of old cars: The National Assembly’s Standing Committee on Finance on Tuesday termed the Economic Coordina-tion Committee of the Cabinet’s decision on reducing age limit of old and used cars from 5 years to 3 years as non-transparent and barred the Ministry of Commerce from issuing notification for the imple-mentation of the decision.

Iran to provide $500m for gas pipeline: Prime Minister’s Advisor on Petroleum Dr. Asim Hussain said on December 4 that Iran has agreed, on Pakistan’s request, to provide $500 million for construction of Iran-Pakistan gas pipeline inside Pakistan out of which $250 million would be provided directly to Pakistani govern-ment and the remainder would be provided via an Iranian bank.

FBR to ask Swiss authorities about black money: The Federal Board of Revenue (FBR) is reportedly planning to approach Swiss authorities in order to retrieve billions of dollars in black money that were transferred by Pakistani individuals and corporate entities to Switzerland. It was possible to retrieve money from Switzerland under article 25(I) of the avoidance of double taxation treaty between Pakistan and Switzerland which clearly makes it obligatory on Switzerland to provide information regarding Pakistanis maintaining accounts in Switzerland.

MFBs urged to emphasize on savings mobilization, cost reduction: Inaugurating the 6th Pakistan Microfi-nance Country Forum in Karachi on December 5, SBP Deputy Governor Kazi Abdul Muktadir urged Micro Finance Banks (MFBs) to emphasize on savings mobilization and cost reduction by developing new strategies and infrastructure such as branchless bank-ing. He also disclosed that International Strengthening Fund (ISF) has so far approved Rs. 632 million for 13 microfi-nance providers including top and middle tier Micro Finance Banks and Micro Finance Institutions.

Pak farmers demand Rs. 12,000 per acre subsidy: Representatives of farmer organizations have asked the federal government to either give subsidy of Rs. 12,000 per acre to growers on various inputs or impose Rs. 400 per 40 kg regula-tory import duty on Indian produce to ensure level playing field against highly subsidized Indian agriculture sector.

Foreign investment in Pakistan plummets-World Bank: The World Bank has revealed that foreign investment in Pakistan has declined by $4.13 billion during the four years of the present government.

President Zardari wants APC on economic issues: Addressing a recep-tion hosted by him in honor of the mem-bers and officials of Overseas Investors Chamber of Commerce and Industry (OICCI) on December 6, President Asif Ali Zardari asked businessmen to organ-ize an all-parties conference on economic issues. He said that he would also attend such a conference to reach a consensus on vital issue of investment and economic policies of the country. He also empha-sized the need for more foreign invest-ment in Pakistan and urged the investors to play their due role in the formation of long-term investment policies.

Kalabagh Dam project opposed: All the political parties allied with the govern-ment or opposition benches in the Sindh Assembly have joined hands against the Lahore High Court’s recent verdict in favor of Kalabagh Dam project.

OGDCL discovers gas in Khairpur: Oil and Gas Development Company Ltd (OGDCL) has discovered 20 Million Cubic Feet per Day (MMCFD) gas from Suleman-1 exploratory well located in District Khairpur, Sindh.

TI statistics in corruption report wrong- PAC: Chairman, Public Accounts Committee Nadeem Afzal Gondal on December 6 challenged the Transparency International report on corruption saying the report was not prepared in good faith.

US committed to release $600 million: Finance Minister Dr. Abdul Hafeez Shaikh is reported to have informed the Prime Minister Raja Pervez Ashraf that US government has reaffirmed its commit-ment to release $600 million for the Coalition Support Fund, to rehabilitate power distribution system and electricity plants at Guddu, Jamshoro and Muzaffar-garh and committed to support in the completion of Diamer-Bhasha dam for which $200 million had been approved to start the work.

NAB saves corruption of Rs. 1.5 trillion: The National Accountability Bureau (NAB) on December 9 claimed that during the last 6 months under its Aware-ness and Prevention of corruption regime it had saved Rs. 1.5 trillion from being embezzled through its early interventions in more than a thousand projects.

Currency swap arrangement between Iran and Pakistan: Reportedly, Pakistan and Iran are unlikely to sign currency swap arrangement (CSA) as central banks of both the countries believe that such an option is not available. Because of interna-tional sanctions on Iran, Pakistani banks were hesitant to conduct transactions with Iranian banks and most of trade activities were either carried out in cash or via third country, particularly Dubai.

Govt collects more revenues from auto industry, than estimated: Contradicting the Federal Board of Revenue’s claim of revenue loss of Rs. 17 billion due to cut in age limit of import of used cars, the auto industry has pointed out that loss linked to unabated arrival of used cars is more colos-sal. They said that the revenue generated by the government on similar vehicles manu-factured by the local industry would have been Rs. 21.5 billion exceeding the levy on used cars by Rs. 4.5 billion per annum.

Overseas Pakistanis remit over $5.98bn in 5 months of FY13: Overseas Pakistanis remitted an amount of $,982.04 million in the first five months of the current fiscal year showing a growth of 14.16 percent when compared with $5,239.99 million received during the same period of the last fiscal year.


was held on January 2, 1965 in which the president and the members of the assemblies were elected through the votes of 'basic democrats' in their capacity as members of urban and regional councils. The election was allegedly rigged by Conven-tion Muslim League led by the then Gen. Ayub Khan to defeat the combined opposition led by Mohtarma Fatimah Jinnah.The only election generally believed to have been free and fair, was that of 1970 under the then dictator Gen. Yahya Khan. But then we lost the Eastern wing of the country consequent to the election results as their implementation did not reflect the popular will of the people. All the elections held subsequent to 1970 were allegedly flawed and rigged. Keeping in view the past history of elections in the country, it is hard to endorse the oft-repeated statements that “PPP is committed to ensure free, fair and impartial elections in the country’’, and that “the nation should shun despondency because desperation and hopeless-ness are a sin in Islam.” Generally speaking, for an election to be free, fair and impartial, one of the essential prerogatives is that it should be held under an independent, non-partisan electoral organization that ensures that the 'playing field' is accessible by all eligible voters, parties, and candidates and that there is no interference from the incum-bent government through the use of executive machinery to win and remain in power against the will of the people in favour of its removal. Measured on this yardstick, even modern elections in many countries are not truly free and fair. Therefore, monitor-ing and minimizing electoral fraud is an ongoing task even in countries with strong traditions of free and fair elections.In the current scenario in Pakistan, indications are that the goal of fairness and transparency may be achieved. The presence of an independent ECP, its avowed vision and determined moves so far witnessed, seem gradually shedding away the apprehen-sions about any lack of its capacity and capability, and lead one to believe that the challenge of generating a genuine electoral environment will squarely be met if the issues coming in its way are amicably settled. The several issues that may impinge upon the election results the most emergent and important are:• Incomplete voters’ list• Manipulated constituencies• Compromised polling stations • Law and order around polling stations• Code of electoral conductDespite the good work done by NADRA, the voters’ list has been found to be incomplete. Reportedly, of the 8.6 million eligible voters, names of around 3 million are missing; they have neither been registered at their permanent addresses outside Karachi nor included in the list of voters maintained for Karachi. Under an order of the Supreme Court, voters lists need to be updated. It is appreciable that the ECP has volun-tarily taken upon itself the onerous responsibility of rectifying this distortion through door-to-door re-verification by its staff and including Army personnel in those teams, for security of the verifiers. ECP has announced the schedule of door-to-door campaign for verification of voters’ lists in Karachi.The delimitation of the constituencies is yet another tricky issue amenable to solution. Since the correction of the voters lists and delimitation of constituencies, are Karachi-specific, and have drawn a strong reaction from the MQM, it calls for deftness to resolve them amicably. MQM has expressed its reservations about these issues, and perhaps rightly so, and demanded the exercise, if needed, to be undertaken throughout the country. MQM has described the Karachi-specific exercise

of delimitation without a census, as pre-poll rigging, and warned that it could have dangerous consequences. One can hardly disagree with MQM’s point of view, but taking up such an exercise on an all-Pakistan basis is a time-consuming job, and may call for postponement of the elections. It is to be seen how deftly the ECP is able to resolve this serious issue.For parties that claim to have their vote bank intact, issues like correction of the voters list or delimitation of constituencies may hardly have any adverse impact on the election results. What is important is to ensure that voters are encouraged and facilitated to come to the polling stations and cast their votes freely accord-ing to the dictates of their conscience. It is heartening to note that, to facilitate voters in casting their votes, the ECP has decided that the number of polling stations will be increased ensuring that they are set up at a distance of 2 kilo meters each.Equally important is the need to maintain peace and order at and around the polling stations. Historically, the powerful among the contenders are used to taking over polling stations by use of force. The ECP decision to deploy the army person-nel inside and around the polling stations will hopefully make the polling exercise peaceful and transparent. Last but not the least important is the need for adoption of a code of electoral conduct and ensuring maximum electoral turnout to make the results truly representative.It is for the first time in the chequered history of Pakistan that a democratic setup will be completing its full five-year term by 17th March 2013. Thereafter, a caretaker government is to be installed which will be bound to hold the general elections within 90 days. Certain quarters are voicing the fear that attempts may be made to create a situation that may help the government to defer the elections for a year or so. The height-ened incidents of killings in Karachi and other parts of the country are being quoted as part of such machinations. The demand for undertaking country-wide delimitation of constitu-encies is also being considered an attempt to facilitate for the postponement of the elections. Should that be true, it would be tragic. The ECP, the politicians, and the common man need to be wary of such machinations and avoid playing into the hands of those who may be out to delay the elections.The forthcoming elections in Pakistan will shape the direction the country will take in the years ahead. According to the National Democratic Institute (NDI) that visited Pakistan between December 16 and 21, to review the political environ-ment and framework for the elections to national and provin-cial assemblies, “2013 elections present an opportunity for Pakistan to continue its reform momentum and advance its democratic transition,” pointing out that the polls could mark in Pakistan’s history first time that an elected civilian govern-ment transferred power through a democratic process’’. Holding of free, fair and impartial election is a moral as well as constitutional obligation. On its part, the ECP has made elabo-rate arrangements to ensure transparency and fairness in the elections to expose the popular will of the people. But the former Canadian Prime Minister, Joe Clarke, who visited Islam-abad at the head of a multinational delegation for pre-election assessment of electoral process, trends and attitudes, termed the arrangements for the forthcoming general elections as ‘satisfac-tory or credible’ but not ‘perfect’. One hopes and wishes that the coming elections are held on time, are peaceful, fair and transparent, and in accordance with the spirit of the Constitu-tion of Pakistan. If this can be ensured, it would be a feather in the cap of the ECP and of the sitting government.

APTMA protests against reduced gas supply: All Pakistan Textile Mills Associa-tion (APTMA) Chairman, Shahzad Ali Khan has strongly protested against five days a week gas curtailment to textile indus-try by the SNGPL, as the industry would not be able to perform when it is already passing through six hours a day electricity loadshedding. He said that the government was looking for IMF assistance to meet balance of payment commitments while losing three billion dollars foreign exchange by curtailing gas to textile industry.

Govt urged to announce cotton policy: Kisan Board Pakistan (KBP) Central President, Sardar Zafar Hussein Khan has urged the federal government to immedi-ately announce a cotton policy as growers are being exploited in absence of such a policy. In a statement on December 4, he said that prices of agricultural inputs including fertiliser and petroleum products had increased manifold and cotton prices also need upward revision in the light of increase in input cost. He demanded that the government should fix ‘phutti’ price at Rs. 4000 per maund and ensure that the cotton growers are not exploited by the stakeholders.

Mr. Manzar Khurshid Shaikh, President, Rawalpindi Chamber of Commerce & Industry, visited the Karachi Chamber of Commerce & Industry and had a meeting with the President, Mr. Muhammad Haroon Agar. In the picture, Mr. Muham-mad Haroon Agar, President of the Cham-ber, is seen presenting Chamber’s Crest to Mr. Manzar Khurshid Shaikh.

SCCI proposes to slash mark-up rate on export refinance: The Sarhad Cham-ber of Commerce and Industry (SCCI) Standing Committee on ‘Banking and FDIs’ has proposed for lowering the mark-up rate on export refinancing and suggested that commercial banks should extend soft-loans to war- affected business community, for economic development and industrial growth in the Khyber Pakhtunkhwa.

Mr. Siraj Kassam Teli, Chairman, Businessmen Group and former President of the Karachi Chamber of Commerce & Industry (KCCI) is seen presenting souvenir to Honourable Raja Pervez Ashraf, Prime Minister of the Islamic Republic of Pakistan, at a meeting, at Aiwan-e-tijarat. Syed Naveed Qamar, Federal Minister for Defence, is also seen in the picture.

Millers seek enhancement of limit for sugar export: Fearing market saturation in the wake of fresh sugar production of 5 million tons in addition to 1.2 million tons in unsold stock, millers have urged the government to allow them to export at least 1.2 million tons of white refined sugar from the existing limit of 400,000 tons.

Textile associations reject raise in gas prices: The leaders of textile associa-tions have rejected the proposed raise in gas prices by 9.87 percent and termed it an unwise move, as it would further increase the cost of doing business, hit industrial production, affect exports and would be detrimental to the national economy as well as industry.

LCCI supports NTN drive by FBR: The Lahore Chamber of Commerce and Industry (LCCI) has supported the FBR’s decision making it mandatory for the businesses to display their National Tax Number (NTN) at their place of business as it will help broaden the tax base that is the need of the hour.

Need to expedite normalisation of Indo-Pak trade ties underlined: Chair-man, Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) India, Vinod Kumar Ladia has said that India has strong base in the textile sector, particularly in man-made fabric and can provide its technology to Pakistan. Speaking at the Lahore Chamber of Commerce and Industry on December 3, he urged the governments of Pakistan and India to expedite normalisation of trade relations at a much faster speed.

KCCI urges Spanish envoy to invite investors: President, Karachi Chamber of Commerce and Industry (KCCI), Muhammad Haroon Agar has urged the Ambassador of Spain, Javier M. Carba-josa Sanchez to invite Spanish investors to invest in renewable energy solutions in Pakistan as Spain is one of the world’s leading countries in the development and production of renewable energy and Pakistan is energy-hungry and desperately needs energy on war- footing. The Spanish envoy said that to attract investment, safety, political stabil-ity, infrastructure and utilities are of prime importance.

REAP enumerates benefits of trade with India: Rice Exporters Association of Pakistan (REAP), appreciating government’s decision to allow trade with India, has said that India being a market of around 1.3 billion people offers bright prospects for food and agricul-tural products. The REAP Chairman, Ch. Samee Ullah, however, criticized bureaucracy for not involving stakehold-ers into the negotiation process.

Mr, Siraj Kassam Teli, Chairman, Business-men Group and former President of the Karachi Chamber of Commerce & Industry is seen presenting Chamber’s Crest to Mr. Imran Khan, Chairman, Pakistan Tehreek- e-Insaaf (PTI) at the Presentation on Economic Road Map for the Revival of Pakistan’s Economy, at Aiwan-e-Tijarat. Mr. Jehangir Tareen, is also seen in the picture.

KCCI urged Romania to invest in Pakistan: Talking to the Ambassador of Romania Emilian Ion, Karachi Chamber of Commerce and Industries President Haroon Agar said that Pakistan offers attractive packages to Romanian investors for increasing capital inflows just as it happened in the past through their comprehensive technical offers in oil-refining, cement factories, power equipment, food, metal and wood processing in machinery, agricultural machinery etc.


by A. B. Shahid

ECONOMY

n January 2013, an IMF team is scheduled to visit Pakistan to explore the prospects of fresh lending. On November 21, 2012, IMF concluded its first post-programme monitoring to explore the possibilities of

‘Exceptional Access’ under its 2008 Stand-By Arrangement (SBA) implying a request on Pakistan’s part to avail the last tranche of the SBA that IMF didn’t disburse because of poor progress under the SBA. The pressure built by payment of the IMF tranches as they fall due, and the expanding Trade and Balance of Payment deficits eroding SBP’s exchange reserves, are weakening the Rupee–a worrying prospect. Given the continuing trends in these two deficits, the IMF projects that (excluding the gold and forex deposits with SBP) by June 2013 official exchange reserves will decline to $7.38bn, and pose a serious threat to sustaining the Rupee’s exchange rate with grave implications for inflation, which could rise to double digits by June 2013. In early December 2012, official reserves

had already declined to $8.51bn making it likely because, by June 2013, the Rupee would be backed by a very low level of exchange reserves. The fact that the Rupee had already depreciated by around 8 percent compared to its January 1, 2012 level, and was on a slide allthrough December 2012, was an indication of its depreciating further unless fresh backing in the shape of foreign inflows could be provided.According to the IMF “The situation is compounded by an uncertain global environment, and a difficult domestic situation, as well as adverse effects of natural disasters.” IMF had emphasised that strong policy measures and deeper reforms were critical to addressing vulnerabilities, boosting a sustainable growth, and containing poverty. The most worrisome aspect of this scenario is that, throughout the past five years (during which IMF’s fund-ing was available) the government failed to inject tangible stability in the economy. According to the IMF it “led to a decline in State Bank of Pakistan’s foreign exchange reserves

I

IMF’s review ofPakistan’s economy

KCCI officials including Mr. Naeem Qureshi, Mr. Ateeq ur Rehman, Mr. Kaleem Siddiqui and Engr. Nadeem Ashraf and others at the “Fire & Safety Convention and Award 2012, at local hotel.

Small traders seek clean-up operation against criminals: Small traders on December 13 showed deep concern over a sharp rise in bomb attacks at shopping centres, saying the government’s pathetic policies helped grow violence in the city since 2008. They urged the government to begin clean-up operation against the criminals in the city.

SBP should reduce mark-up to 8pc: The Lahore-based business community has termed 50-basis point cut in the mark-up by the State Bank of Pakistan as insufficient and demanded further reduction to bring it down to 8 percent.

PAAPAM urges govt to extend 5pc levy on tractors to 1 year: The Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) has urged the government to extend the reduced levy of 5 percent on tractors sale for another year with a view to sustaining manufacturing growth, which is under serious threat of closure due to gas supply suspension and long hours of unan-nounced power loadshedding in Punjab.

Textile industry demands reduction in interest rate: Textile industry has report-edly demanded reduction in interest rate by 250 bps to 7.5 percent in the forthcom-ing monetary policy as growth of Large Scale Manufacturing (LSM) sector is stalemate due to shortage of investment.

APTMA to protest against energy crisis: All Pakistan Textile Mills Association (APTMA) has decided to protest strongly against the severe energy crisis, especially in the province of Punjab where 80 percent of textile industry exists and passing through electricity and gas supply shortages.

All Pakistan Anjum-e-Tajran President and former MNA from Faisalabad, Mian Abdul Manan visited Islamabad Chamber of Commerce & Industry (ICCI) for a meeting with Mr.Saeed Ahmed Bhatti, Vice President of ICCI. Speaking on the occasion, Mr.Saeed Ahmed Bahtti, Vice President of ICCI said that traders of Federal Capital were facing many problems which should be solved on priority basis by the Government. He said that a balanced Rent Control Act in Islamabad would greatly reduce and resolve the rental issues of traders of the Federal Capital.

Anti-dumping duty on polyester yarn opposed: The textile sector has expressed hope that anti-dumping duty on polyester yarn will not be imposed as importers have already to pay 6 percent import duty on it, which is not refunded even after exports. Chairman, All Pakistan Mills Association, Ahsan Bashir, said that globally 55 percent of the fiber used by textile companies as important raw material is manmade while only 45 percent of it is made from cotton. In Pakistan, 75 percent of fiber used in textiles is made from cotton. He said “we want to come at par with the world but are constrained by the incorrect government policies that are affecting local textile market.”

FPCCI wants to promote Pak-Canada business relations: Sheikh Haroon Rashid, Vice President FPCCI stated that FPCCI wants to further promote and strengthen the economic relationship particularly through developing trade ties with Canada. He said this during a meeting with Mr. Jawad Qureshi, Analyst, South Asia, Government of Canada, Privy Council Office and Mr. Uday Sequeira, First Secretary (Political), Canadian High Commission Islamabad, held at FPCCI in Karachi. Mr. Uday Sequeira highlighted the importance of frequent exchanges of trade delegation as a tool to strengthen people-to-people contacts between the two countries. He said that he found the Pakistani people very open, forthcoming and hospitable.

APTMA criticizes SNGPL for suspending gas supply to textile indus-try: The All Pakistan Textile Mills Associa-tion (APTMA) Punjab Zone Chairman, Shahzad Ali Khan has criticized the Sui Northern Gas Pipelines Ltd (SNGPL) for suspending gas supply to the textile indus-try for an indefinite time period, saying that it was an anti-industry and anti-worker action and detrimental to country’s exports. He urged the government to direct the SNGPL to resume gas supply to textile industry without any delay to save the country’s exports and employment at large.

New Trade Policy: Pakistan Industrial and Traders Association Front (PIAF) has urged the Federal Commerce Minister to finalise new Trade Policy in the light of business community suggestions and proposals to make it more meaningful and acceptable to the stakeholders.

Govt urged to devise Leather Develop-ment Plan: Chairman, Pakistan Tanners Association (PTA), Agha Saiddain, has urged the government to devise a ‘Leather Development Plan’ providing a level playing field for enabling the local leather industry to compete internationally that has potential to double existing leather and leather-products exports. He said that Pakistan is second quality leather producer in the world after Italy but could not tap its potential mainly because of lacking prudent approach on the part of govern-ment functionaries. China, India and Bangladesh are witnessing respectively 46.67 percent, 40 percent and 17 percent growth in leather sector export as compared to Pakistan whose exports have declined by 14 percent.

Govt urged to reduce mark-up rate: Chairman, Pakistan Bedwear Exporters Association (PBEA), Zain Bashir on December 8 said that with a view to augmenting the country’s export of bedwear textile, the government should reduce the mark-up rate and high cost of inputs to enable the local manufacturers to compete with India, Sri Lanka, China and Bangladesh on world markets.

FPCCI upbeat on improved intra-regional trade expectations: Director, Pak-UK Business Council and Chairman, FPCCI Committee on Health has said that intra-regional trade would get a boost when government reduces trade barriers towards the end of December 2012. It will bring a major change in the region, which will have a positive impact on the lives of tens of millions of people, he added.


to under $10bn in October 2012, [i.e.] below adequate level.”IMF believes that deep-seated structural problems and weak macroeconomic policies continue to sap the economy, since annual real GDP growth during the last four years averaged just about 3 percent, and may be about 3.5 percent in 2012-13, which is insufficient for achieving a significant improvement in the living standards and absor- bing the rising labour force. While the IMF wasn’t explicit on this issue, it pointed to the consequences of such a build up i.e. frustration leading to chaos, and a higher state of instability. The likelihood that headline inflation could again rise to a double digit figure by mid-2013, could make this chaos even worse.Like everyone else, the IMF too pointed to the key structural impediment to economic growth–state of Pakistan’s energy sector that causes widespread unpredictable power outages– that has significantly reduced economic growth, and added to unemployment–a fact ignored by the politicians.In 2011-12, the fiscal deficit (excluding grants) reached 8.5 percent of GDP–well over the budgeted target of 4 percent, reflecting large revenue and expenditure slippages (inclusive of higher subsidies), but slippage in expenditures was largely the result of settlement of arrears in the power sector. For 2012-13, the government had planned a fiscal deficit of 4.7 percent of GDP, but based on its current performance and policies even after including grants, fiscal deficit may be 6.5 percent of GDP; it could be higher if grants are excluded.The impact of ending up with such a huge deficit would be passed on to the SBP and the financial services sector in the shape of higher market borrowing by the government, and will further cut credit to the private sector that is already in a bad shape. The IMF expressed its dismay over the fact that private sector credit growth remained subdued, with adverse conse-quences for economic growth. Rising financing needs of the state, its considerable commodity operations, and risk aversion by banks, forced diversion of credit away from the private sector. The fact that liquidity indicators in banks are being boosted by higher investment in government debt is lowering economic growth. According to the IMF “The financial sector appears healthy based on standard indicators, but financial stability risks do exist.” The reason for expressing such fears was that at end-June 2012, banks’ non-performing loans rose to 15.9 percent of their loan portfolios. Although banks reported a decline in this indicator to 15 percent as of end-September 2012 the non-performing loans of domestic private as well as foreign banks and DFIs went up, indicating a rise in systemic risk–a risk that showed its colours during the August-September 2008 crisis that heralded the global recession. Besides pointing to the importance of diverting more credit to the private sector, and further developing the capital markets, the IMF advised early recapitalisation of public and specialised lending institutions (DFI) and passage of the long overdue legislation for creation of the deposit insurance mechanism. While the IMF report does not specifically hint about printing of more currency and the resultant increase in money in circu-lation (which could trigger higher inflation), the risk of its happening is there; that the currency printing option was exercised in the past four years is true as proved by the fact that against average annual GDP growth of 3 percent, rise in money in circulation crossed 14 percent. This trend that has also been fuelled by low profit rates on bank deposits due to unrealistic estimates of consumer and core inflation,

which determine the SBP discount rate to which are linked all the money market rates. Backed by claims about falling inflation and pointing to weak investment environment, in July-Dec 2012, SBP brought down its policy rate by a cumulative 250 basis points (including the cut announced on December 14). This bolstered the argument that monetary policy is helping fund the fiscal deficit. SBP’s direct lending to the state, and injection of liquidity in the banking sector to assist banks in buying government debt securities increased the currency in circulation, pushed up inflation and speeded up depreciation of the Rupee, which reflected that SBP was under pressure to compromise its independence. IMF is of the opinion that SBP needs ‘real’ independence in deciding on the objectives and profile of its monetary policy because sustaining a low level of inflation requires a prudent monetary policy that is supported by very substantial fiscal adjustments. Only then will the pressure for funding fiscal needs ease that hike up the demand for money and cause inflation to rise. IMF has underscored the need for reducing the large fiscal deficit, which is imperative for restoring macroeconomic as well as external stability. Achieving the governments’ 2012-13 deficit target requires broadening the tax net to collect higher amounts of key taxes and reducing subsidies in a way that still protects the vulnerable. In the long run, however, strengthening the fiscal position will require creating space for investing in the crumbling physical infrastructure and on projects that lower poverty–aims whose realization calls for comprehensive and credibly implemented reforms to ensure the transparency of expenditures and substantially improved collection of tax and non-tax revenues. The fiscal consolidation effort must focus on changes in tax policy to rationalize it, and also ensure its compliance by all–taxpayers as well as taxation authorities. Presently, the government isn’t focused on beginning a process of imple-menting comprehensive tax reforms; the focus is on a “tax amnesty scheme” that, it claims, will encourage the inflow of external resources to the tune of Rs 15 trillion, and additional Rs 150 billion in taxes. This is a reflection of the wealth Pakistanis are suspected to have stashed away abroad, as well as on the prolonged period of bad administration in the country that prompted the citizens to stash their wealth away instead of investing it in Pakistan’s economy. The tax amnesty scheme was not seen by many as the right course for resolving the long-running fiscal deficit issue. On the contrary, it was likely to serve as a disincentive for the honest taxpayers to go on paying taxes. Some IMF directors had there-fore urged reconsideration of the amnesty scheme being devised by the Finance Ministry. This wasn’t the first time the IMF had expressed its reservations over the merits and ethical aspects of the tax amnesty, that the government seems hell-bent on granting. After the IMF’s unfavourable reaction to the tax amnesty scheme, the only change in the government stance has been to limit the period of amnesty to 75 days, which is a reflection of the importance it gives to morality and ethics in the affairs of the state.IMF did recognise the ‘political’ difficulties in implementing a nation-wide VAT collection system. This was odd because the real issue is FBR’s inability/reluctance to devise credible and practical record keeping systems that should be adopted by businesses, and preparing a committed FBR inspectors’ workforce to verify the implementation of that system by all businesses. Instead, IMF directors advised the authori-ties to consider credible alternative tax collection systems

n December 8, Maulana Fazlur Rehman, chief of Jamiat-ul Ulema-e-Islam (JUI-F) faulted the Supreme Court (SC) for what he called its ‘undem-ocratic’ judgment in the case that thoroughly examined the

law and order scenario prevailing in Balochistan and came to the conclusion that Balochistan’s government had failed in meeting its obligations in this area. Addressing a press conference at the conclusion of JUI’s 2-day Central Executive Committee meeting, JUI-F chief said that he could not comprehend the SC verdict regarding the constitu-tional status of Balochistan government and advised the SC to refrain from interfering in such matters because it was the peoples' right to elect or reject any government, or a political party. According to him, "such a decision should be left to the people of Balochistan." Thereafter, he said something which was far more amazing. He said that judges were not ‘supposed’ to contest elections (i.e. for publicity); it is the politicians who do that, and "will be facing the people".Maulana Fazlur Rehman isn’t the first politician to fault the SC and demand that its verdicts should be ‘democratic’, that is, they should not fault the in-power political regime for its failures. This demand is a new invention–the product of the sort of democracy we now have in Pakistan wherein all the issues must be decided, not on their merits, but on how they help support the regime in power, impliedly, to win the next election and perpetuate its flawed governance. What is odd though is the fact that such a demand has been made by a religious stalwart who should be concerned more about court verdicts being based on facts and realities rather than their acceptability to an in-power regime, which is what the edicts of Islam teach us all. This is the first time that a religious leader has ‘advocated’ that court verdicts be based on popular majority vote rather than ground realities. To his embarrass-ment, only a day later, NAB’s Director General in Balochistan told a press conference that at least six ministers of Balochistan government were being investigated by NAB for their alleged misconduct in handling the affairs of their respective ministries. That is not all; in early December, there were reports that a hefty amount of Rs 48bn, spent by Balochistan government, was unaccounted for and the Balochistan Chief Minister had instructed his cabinet ministers not to appear in the hearing on the issue called by the Public Accounts Committee. This isn’t the only report about such events in Balochistan; earlier a press report (not denied by the Balochistan government or the federal government) said that Rs 152bn, spent by MPAs of Balochistan on ‘development’ projects in their respective constituencies, also remained unaccounted for. This was hardly the setting wherein JUI’s Chief should have opted to advise the judiciary on what it should be doing and what it should be avoiding. Yet, he chose to do so, reflecting the mindset of Pakistan’s many self-proclaimed democracy lovers– the clan that is democracy’s worst enemy.

After telling the SC what it should do and not do, he shifted his focus on Lahore High Court's verdict on building of the Kala Bagh dam. He rightly said that it was a technical and not a politi-cal issue, but added that the court’s verdict won’t ‘serve’ this project. Hopefully, he didn’t imply that judiciary can’t hear cases involving technology since they don’t have technical knowl-edge. But if that is what he implied, which is what one may conclude from this remark, the Maulana was defining yet another limit that the judiciary must not cross.What he didn’t opt to define as bluntly, as he did in the case of judiciary, was whether our ‘vociferous’ parliamentarians have the requisite technological know-how to decide on the fate of the Kala Bagh Dam? So far, what parliamentarians in Sindh and Khyber Pukhtun Khaw have done, is to overrule the decision of the Council of Common Interests (CCI) that has raised a crucial unanswered question: can the parliament overrule the CCI, and if so, how should it go about it?Pakistan’s parliamentarians–many of them holding a variety of distinctions like fake educational certificates and degrees, foreign nationalities, undisclosed assets abroad, and cases of their alleged (in many cases, also proven) roles in corruption – are quite an ‘admirable’ lot. Now it seems they are striving to earn yet another such distinction – revise the constitution of the country to allow for justice being dispensed on the basis of popular vote. What they appear far less concerned about is the undeniable truth that, courtesy corruption in state offices and pervasive tax evasion, the escalating fiscal deficit is widening the gaps in the country’s physical infrastructure (the widest being in the power generation sector) and the depreciating exchange value of the Rupee is making things worse because this setting has already forced many businesses to shut and thus pushed unemploy-ment to dangerous levels. They are not concerned over the rapid slide in Pakistan’s credit, sovereign risk, and transparency ratings that are distancing Pakistan from global market access. Yet the parliamentarians seem hopeful about winning the elections scheduled for May 2013.Terrorism–the biggest single negative that is driving foreign businesses away from dealing with entities in Pakistan–is the outcome of rising poverty that is rooted in denial and gross neglect of the under-privileged, by a bankrupt (and corrupt) state administration, as well as by that element of inflation which is ‘engineered’ by the trading community. You rarely notice a parliamentarian backing the drive for expanding the tax net (unless the target is a political adversary) or including self-regulation in the code of ethics of the many chambers of trade and industry and trade associations in Pakistan.The immoral and self-serving mindset of the politicians has inculcated a trend for defying the law. The politicians don’t realize that, over time, it will make governance of the state a near impossibility, and the mantra that everyone will recite will be “everyone for himself and God for us all”.


will help Pakistan focus on ensuring better fiscal discipline, boosting its tax and revenue, minimizing harmful monetary ‘accommodations’, strengthening the process of implement-ing structural reforms in the economy, and in managing the process of fiscal decentralisation so that local and provincial governments accept a larger share in providing the essential services and collecting taxes. Some hopes, aren’t they? This softly worded conclusion is very meaningful because it points to a series of failures that went on unaddressed, since the government remained focused on politicking, not on its obligation to address these escalating distortions; that this is the ‘truth’ is amply proved by the increasing public unrest as seen on the streets of almost every town and city, and the dangerous level to which has risen the open defiance of the law that is sapping all the energies of the state. What the IMF has warned Pakistan about, and rightly so, is that going forward, it would “better” analyse the risks to the SBA, and this includes the risks to:• Donor financing • Strong ownership • Securing broad political support for tax/other reforms This is an indirect pointer to the sagging image of Pakistan and how it will impede attracting foreign donors or investment that Pakistan badly needs given its escalating trade and Balance of Payment deficits. Tales about resorting to flawed auctioning practices in case of the G3 telecom licenses and doubts about receiving funds under the Kerry-Lugar Bill or recovering dues from CSF, make things more uncertain.

including a modified GST, and improving income tax collection. This compromise, though not fair, may work but the key issue is expanding the tax net that the FBR is failing in; the fact that according to FBR, only 0.3 percent Pakistanis (compared to 4.3 percent in India) pay taxes, manifests FBR’s prolonged failure. This failure also reflects trade bodies’ respect for the law; they openly defied a FBR directive requiring businesses to display the National Tax Number (NTN) Certificates on their premises–an exercise that aimed to identify businesses that were out of the tax net. What the trade bodies did was to malign the FBR by labelling this directive a blackmailing effort, though the FBR demand was perfectly legal.According to IMF, Pakistan’s implementation of SBA terms was initially good but remained incomplete thereafter pointing to adverse external and domestic shocks, and the mixed results achieved in progress on structural reforms. But the key goal of sustainable fiscal consolidation couldn’t be met. Surprisingly, in the context of this key failure, there was no explicit reference in the IMF review to the resource waste, which has been the hot topic in Pakistani media, and now in the assessment released by Transparency Interna-tional. It is surprising not to find a reference to this big impediment to reducing the fiscal deficit. By ignoring this aspect, and yet by levy of indirect taxes that disregard the concept of the “ability to pay”, and impact the rich and the poor alike, IMF is seriously damaging its public image.IMF Directors believe that continued engagement with IMF would prove beneficial for Pakistan and IMF’s policy advice

ow craving for freedom can be a self-damaging tendency has rarely been proved as emphatically, as is the case now. In today’s Pakistan freedom implies defying the law as being manifested by all and

sundry; you only need to form a group to frighten the state into submission because the state – as heartless and twice as clueless – listens only to this profile of demand. That we are fast becoming a failed state occurs to no one, much less to the institutions that should be worried about this trend.What makes this developing scenario extremely worrisome is the fact that this chaos is being caused by well organized outfits–the associations of physicians, nurses, lawyers, transporters, CNG station owners, traders and retailers. They all directly impact daily life routines of hundreds of millions of Pakistanis, and that is what builds the harrowing prospect of a total collapse of the society.Abduction of one doctor or assumed fall in the purchasing power afforded by doctors’ and nurses’ salaries is sufficient for them to stop their critical life-saving services for days at a stretch. On the one hand lawyers despise delays in settle-ment of cases because of both, shortage of judges and flawed legal processes, but don’t find anything wrong with going on strikes; transporters don’t care about the negative impact of delayed shipments of much needed export orders or loss of this business completely, or rotting of the goods in trucks parked for days on the highways; CNG station owners don’t care one bit about the misery caused to millions by closure of their stations. This chaos is made worse by traders and retailers, who shut shops even on issues such as a valid FBR demand to display NTN Certificates on their premises. But, the worst part is the state and politicians’ defiance of court orders and verdicts – the latest by the MQM. This scenario portrays a total lawless society but none seems bothered about what this image holds out for the future. In civilized societies, the common belief that induces a rational behaviour is that “one’s freedom ends where ends the tip of his nose; beyond that begins the freedom of other humans.” We, on the contrary, believe in a setup that offers an arena –a ‘free for all forum’ – the worst environment, in which any society can expect to survive for days, let alone years. This environment develops if, for a sustained period of time, the state fails in its obligation, firstly, to ensure a reasonable standard of living for the majority and secondly, doesn’t allow the law enforcement strength to grow at a rational pace with the rise in population to ensure that citizens realize that they must abide by the law; any change therein must be sought by adopt-ing the legal course, neither defiance nor organized chaos. Successive Pakistani regimes failed to take steps that could raise the majority’s standard of living or up-grade the law enforce-ment capacity. This combination was the recipe for the build- up of suicidal flaws in the society that we now face, and are condemned globally therefor.

The real unfortunate part is that, those who can mend these flaws are not willing to do so, because they all suffer from a disease called “politicking”. They make faulting the judiciary for its ‘activism’ a common cause but don’t look inside their shirts to see that this activism is entirely the result of failure of the state in delivering on its obligations, especially cutting resource waste, and rampant corruption of practically every shade that is causing peoples’ miseries to escalate to a point, which can fairly be termed as “explosive.” In December 2007, Prof. Michel Chossudovsky (University of Ottawa) quoted a 2005 CIA and US National Intelligence Council (NIC) report that forecast a "Yugoslav-like fate" for Pakistan predicting it to become a “country raven by civil war, bloodshed, and inter-provincial rivalries" in a decade. Accord-ing to that confidential report, Pakistan was ‘slated’ to become a "failed state" by 2015.What was more frightening in that report was a reference to a concerted effort to malign the Army to demoralize and incapacitate it thus limiting its role in containing the chaos that will be ‘escalated’ over a decade to destabilize Pakistan. That trend is clearly visible; a part of the media too is overly busy in tarnishing the image of the Army, and its adverse commentar-ies haven’t been reprimanded by any state office-holder. If Pakistan’s political leaders didn’t note this build-up and the way it has continued, it reflects poorly on their competence to safeguard the sovereignty of Pakistan. And if they noticed it, and yet did what they did beginning 2005 (more so since March 2008, when the country became what politicians call ‘real’ democracy), it is a shocking portrayal of its much-touted sincer-ity and loyalty to Pakistan.While Pakistan’s stability is at stake, courtesy an escalating social chaos caused by rising inflation, which is the combined result of mismanagement of the economy by the government, and corrupt pricing practices in all consumer markets that are expanding the gulf between the rich and the poor, politicians are busy denying the fact that their majority does not pay income tax. After publication of the report exposing this reality, FBR officials were taken to task for sharing FBR data with the media, but no politician regretted his conduct.It is unbelievable that politicians in a civilized country would obstruct or oppose de-weaponization of the society if there are indications that a sizeable section of its population holds un-licensed weapons that have been acquired from criminal outfits operating on the instructions of foreign elements. It is only in Pakistan that political parties blatantly oppose de-weaponization in spite of courts condemning them for their total failure in containing organized crime and anti-state acts committed by a class of citizens. It is in these circumstances that commentators are justified in classifying such criminal outfits as ‘private armies’ within political parties. Is this what ‘real’ democracy must deliver? There can hardly be a worse way of defaming democracy.

ECONOMY

Reasons for Decline inForeign Investment

by Rauf Nizamani

Foreign Direct Investment in Pakistan has recorded a

decline of $ 4.13 billion during the four years of the present government

from 2008 to 2011

“

”

BP’s Monetary Policy announcement on December 14 was a bit of a surprise for some observers because SBP opted to cut its policy rate by another 50 basis points, citing a reduction in consumer and core inflation

indices as the logic therefor. The reduction in SBP’s discount rate is in line with the reported fall in non-food and non-fuel core inflation index, which came down from 10.2 to 9.7 percent. But this logic is questioned by observers for more than one reason. Non-partisan market observers fault SBP’s monetary policy for two reasons: first, in a country like Pakistan, should non-food and non-fuel core inflation index be the yardstick for determin-ing SBP’s policy rate and, second, do the inflation indices posted by Pakistan Bureau of Statistics (PBS) reflect market reality or suit the government’s public image needs? During 2009, while answering to a select committee of the US Senate, Federal Reserve Bank Governor Ben Bernanke was asked “why is the Fed’s discount rate aligned with core inflation index, and not consumer price index?” In response he said that interest rates cannot be aligned with an inflation index that includes goods and services whose prices change too often, because that could destabilize the entire financial system. He was right because doing so would destabilize the markets and create huge opportunities for the speculators to benefit at the cost of the society, and thus expand the rich-poor gap. This logic makes sense only if, as a percentage of the total expenditure of the vast majority in a country, food and fuel constitute a minor share. This no longer is the reality even in America, given the large-scale unemployment, and rising poverty, far less in countries like Pakistan where over 80% of the people spend between 30 to 75% of their incomes on food and fuel. PBS-generated inflation indices have lost their credibility. According to them, as of November 2012, on a year-on-year basis, CPI was 6.9 percent and food inflation dropped to 5.3 percent. How many of us believe these estimates to be true is not worth asking; that lot is only a handful, most of them in the ranks of the political parties that form the ruling coalition. In a period close to the elections, it is only ‘wise’ not to question such attractive inflation estimates.Yet, the business community that pays zero attention to its role in fuelling inflation, or to incentives that are necessary (positive real returns to savers) to increase domestic savings, is unhappy because it wanted the SBP discount rate to be cut by a hefty 200 basis points. Statistics quoted in SBP’s monetary policy clearly show that weighted average real rate of return being paid on savings is ‘negative’ 4.11 percent per annum; this negative return isn’t the incentive for domestic savings to go above their current pathetic level. It is not odd that we have the lowest (9 percent) savings to GDP ratio in South Asia region–a big ‘nega-tive’ that made Pakistan overly dependent on external borrow-ings that are hard to get, and the existing load of repaying them

is now beyond Pakistan’s capacity. The monetary policy itself admits that “The overall stress in the external position, however, is increasing given declining financial inflows and substantial debt repayments. Led by direct and portfolio investment flows, the total net capital and financial account inflows are on a declining path for some years……. these inflows have come down from a peak of 7.2 percent of GDP in FY07 to 0.7 percent of GDP in FY12…… during the first four months, there has been a net outflow of $304 million”. Since February 2012, Pakistan has repaid only $2.52bn to the IMF; it has to repay $6.12bn more beginning February 2013 until September 2015.That aside, the monetary policy included an observation that surprised many. It said “the persistent energy shortages have already decreased the utilization of productive capacity of the economy. Resultantly, output gap – difference between aggre-gate demand and the ability of the economy to meet this demand is now almost negligible” implying thereby that supply now equals demand. Is that really so? Or is this logic being offered to justify a PBS-manipulated drop in inflation indices to help the in-power regime in an election year?In its November 21 post-programme monitoring discussion with the Pakistani delegates for exploring the possibility of ‘Exceptional Access’ under its 2008 Stand-By Arrangement, IMF had emphasized on the need for minimizing ‘monetary accommodations’–a covert reference to facilitating excessive government borrowing, at progressively lower interest rates. IMF had also warned that, given the current trend in Trade and Balance of Payment deficits, and the expected drop in official exchange reserves to $7.38bn by mid-2013, sustaining the exchange rate of the Rupee could prove tough, with grave implications for inflation, which could again rise to a low double digit figure. That this will happen, is no more an uncer-tainty. In this scenario, cutting the policy rate is odd. According to the monetary policy, lower interest rates could potentially affect credit demand, including that for imports, and return on Rupee denominated assets relative to foreign currency assets, but then said “the first consideration is not a source of concern at the moment, given the weak overall credit conditions and consistent decline in the quantum of imports. The second consideration is important, and puts a natural limit on downward adjustments in the interest rate. However, it has to be weighed against the expected budgeted foreign inflows, which are not linked to the interest rate, but can boost much needed financial inflows.”These hoped for ‘inflows’ are the proceeds of auctioning G3 telecom licenses and realization of the dues from CFS, but timing of both is uncertain, courtesy bureaucratic tangles. That aside, the key issue consistently ignored is taming of inflation to lower the policy rate on credible bases, to offer positive real returns to the savers; without higher domestic saving the future of Pakistan will remain as uncertain as it is.

The net inflow of foreign investment into Pakistan further fell by 8.1% during FY11. The main contributing factor behind this decline was a substantial fall of $ 800.6 million in foreign private investment which more than offset an increase of $ 632 million in foreign public investment. The decline in foreign direct investment continued for the third consecutive year. A year on year decline of 26.8% in direct foreign investment was contributed by a decline in both equity capital and reinvested earnings. Equity capital recorded a fall of 22.6% whereas reinvested earnings declined by 83.7% during FY11. While foreign direct investment declined due to lingering issues such as terrorism, energy shortages, corruption etc, portfolio investment registered a relative improvement. The overall position of portfolio investment improved in FY11 as outflows in debt securities remained much lower than in FY10. However, the investment in equity securities declined in FY11. The decline of $ 222 million is a function of weak economic prospects and investors’ bleak view of listed Pakistani companies. Regarding debt securities, payment worth $ 21 million were made in FY 11 compared to $ 652.4 million in FY10 which was made on account of maturing Sukook bonds. This trend continued in FY 12 also. Net inflow of foreign investment declined sharply from $ 2 billion in FY 11 to $ 708 million or 64%. Although the main contribution in this respect was of foreign private investment which declined by $ 1239 million from $ 2.0 billion to $ 761 million or 62% but all other sectors also registered a decline. Portfolio investment declined by $ 424.6 million from $ 364.6 million to minus $ 60 million whereas foreign public investment declined by $ 32 million entirely due to the decline in the portfolio investment. FDI fell sharply by 66.9% to $87.2 million during the first quarter of the current fiscal year, posing a major challenge to the balance of payments outlook. The decline in FDI inflows was, however, more significant as foreign companies invested a $286.7 million during July-September FY13 as compared to $ 580.2 million in the same period last year. However, the FDI outflows, including divestments and repatriation from the foreign investors were recorded at $199.9 million this year as against the outflows of $ 317.2 million last year. During the month of September this year the FDI plunged to $ 53.9 million against $ 163.9 million last year with $113.1 million inflows and $59.2 million outflows. Foreign private investment declined by a modest 15.2% to $ 183.2 million during July-September FY13. During the same period last year the net inflows of foreign investment stood at $286.7 million. The portfolio investment at the local equity market witnessed a sharp increase of 305.2%. The foreign investment in the Karachi Stock Exchange stood at $96.3 million as against the outflow of $46.9 million during the same period last year. Of the total FDI $ 87.2 million, major investment was made in the oil and gas exploration sector followed by construction, information technology and the electrical machinery sectors. The net foreign investment in the power and financial sectors were at $ 0.7 million and $ 4.5 million with inflows of $ 5 million and $ 4.5 million respectively. Telecommunication sector witnessed the major divestment as the total of $ 179.2 million was withdrawn from the sector. However, the situation improved and FDI climbed sharply to $125 million in October 2012 as compared to $59.6 million in the same month last year depicting a significant jump of $71.2 million or 131% and also providing some relief to the deterio-rating balance of payments position.

he inflow of Foreign Direct Investment (FDI) in Pakistan is declining continuously for quite some time. As per the statement of Board of Investment, Pakistan attracted $ 25.66 million net Direct Foreign

Investment in the last ten years. Oil and gas, financial business, trade, construction, power and communication were the main sectors which attracted investment. Pakistan reached a record FDI of $ 5.44 billion in 2008 but experienced steep decline since then. The share of FDI flowing into Pakistan is negligible when compared with opportunities and economic fundamen-tals of the country. The inflow into the country is less than 1% of total FDI made globally.Recently World Bank in its report ‘World Investment and Political Risk’ has revealed that foreign investment in Pakistan has recorded a decline of $ 4.13 billion during the four years of the present government from 2008 to 2011. The report said that there was a continuous trend of decrease in foreign investment in Pakistan and a conspicuous decline was recorded in the tenure of present government. The report further said that $ 5.44 billion foreign investment was made in 2008 whereafter it is continuously falling having reduced to only $ 1.31 billion in 2011. In 2009, the investment went down to $ 2.34 billion which further reduced to $2.02 billion in 2010. The report said that the foreign investment had also declined in India; however, there is an upward trend now. Pakistan’s Finance Minister has also stated that foreign invest-ment in Pakistan has declined over the years due to security issues that the country was facing. He said that ‘we do not want to lose credibility by denying facts. There is a negative percep-tion of Pakistan which we are trying to counter’. He further said that ‘Pakistan had adopted the most liberal and open policies to attract investment.’ The World Investment Report 2012 published by United Nations Conference on Trade and Development (UNCTAD) says that inflows of FDI to South Asia recording an increase of 23% touched the figure of $39 billion in 2011 after a slide in 2009 and 2010. The recovery derived mainly from the inflows of $32 million to India, the dominant FDI recipient in South Asia. Inflows to Iran, the second largest recipient of FDI, amounted to $ 4.2 billion. Pakistan being the third in the list received $ 1.31 billion in 2011. Bangladesh has also emerged as an important recipient with inflows increasing to a record high of $1.1 billion in 2011.It is important to mention here that global economic conditions improved in 2010 compared to 2009. Foreign direct investment to developed, developing and transition economies rebounded sharply in 2010. Despite better global economic conditions, FDI flows to Pakistan declined further in 2010 owing to a number of domestic issues that substantially increased the cost of doing businesses in Pakistan. Sector-specific issues such as saturation in the telecom sector and acute energy shortages also deterred the investment flows. Sector-wise data on the FDI shows that the major fall in investment was registered in the telecommunication and oil and gas exploration sectors, whereas FDI flows to power and financial sectors recorded a modest rise. The decline in telecommunication sector probably reflects saturation in this sector. Moreover, stiff competition, rising advertisement cost, utilities cost and energy cost have squeezed the profits of telecommunication companies. On the other hand, the law and order situation i.e. increased incidents of attacks on gas pipelines and oil fields in Baluchistan and KP is a major hurdle in attracting fresh FDI in the oil and gas exploration sector as this issue is proving to be the major constraint on companies looking to expand their operations.

T


s done every year, on December 25, we remem-bered the Father of the Nation in a ritualistic manner, recalling a bit of the lot that he did for us, and that’s where the exercise ended; not many

recalled the golden principles he gave us–unity, faith and discipline–and regretted over the fact that we practice none of those values. Pakistan’s politics thrives on dividing the nation into ever-more fragments, without any concern about the consequences this gross mis-governance of the state will have. When confronted about this state of affairs, the politi-cians justify their own failures by pointing to the fact that their failures are not worse than those of the previous regime. This profile of politics is defended in the name of democracy. In the opening line of his remarkable book “Jinnah of Pakistan”, Stanley Wolpert wrote: “Few individuals significantly alter the course of history. Fewer still modify the map of the world. Hardly anyone can be credited with creating a nation-state. Mohammad Ali

Jinnah did all three.”The creation of Pakistan proved what unity, faith and discipline deliver. Today, to confront a hostile world, we need to be far more united and disciplined, with unflinching faith in ourselves as an indomitable nation. Jinnah wanted Pakistanis to show the world what unity meant–belief in the unity of human beings irrespective of their racial origins, religious beliefs, cultures and traditions, and recognize delivery capability as the ‘only’ merit that distinguished human beings. The tragedy is that our leadership did just the opposite–trample merit.Today, we pride ourselves in being Sindhi, Punjabi, Seraiki, Baloch, Pashtun, Mohajir, Shia, Sunny, Deobandi, Ahmedi, etc., not Pakistanis–a malaise that was fuelled by the state-created inequalities on ethnic and sectarian bases that began developing in the 1950s. ‘Unity’–the core value enunciated by the Jinnah–is to be found only in the books of history. The number of religious and ethnic parties, with virtually no representation in the parliament, that now dominate the political scene, manifests a refusal to imbibe the concept of ‘one-nation’–the biggest failure of Pakistanis as a nation.What we have is unrepresentative democracy that elevates only Chaudhuries, Rajas, Nawabs, Khan Bahadurs, Sardars etc., to power; suffering from eternal political shortsighted- ness, this lot with petty, indecent and self-serving ambitions practices its pre-partition culture of cronyism, which injects into the state administration lethal diseases like corruption, resource waste and greater social and economic inequalities.

The separation of East Pakistan was the bitter fruit of rising economic inequalities, and that too, blatantly. The height of this injustice was proved by the fact that, despite forming 56% of the country’s population, people of East Pakistan were forced to agree to being counted as 50%, courtesy the ‘parity’ principle. What this injustice led to was the tragedy of 1971. Within 17 years of its birth, Pakistan was reduced to half its size crystallizing Indian National Congress’s forecast about its break-up, and Pakistan also suffered its most humiliating military defeat to-date. But economic disparities kept escalating because the leadership remained focused on serving vested interests–a slide wherein Pakistan’s unwitting middle class had its share.

The assumption that the decent were obliged to ‘quietly’ shun the corrupt, and do nothing more, was a blunder on its part. What the middle class– which forms the vast majority of the nation–didn’t realize was that doing so, it was helping the corrupt. Now it has lost its faith in Pakistan, and is keen on migrating to foreign lands; this escapist tendency manifests the denial of this class to accept its fair share of responsi-bility and its failure to assert its weight in correcting the course of history.What now distinguishes Pakistan as a state is indiscipline, not discipline. Despite leading a freedom struggle all across India, Quaid-e-Azam was never found guilty of breaking any of the laws. He believed in disciplined protests that symbolized unity for a cause to induce people to support it, and non-violence was his key value.

Public demonstrations now portray destructive might; you must support the demonstrators, not because you also see merit in the demonstrators’ cause but out of fear of massive destructive might of the demonstrators. Demon-strators on their part consider it their right to kill and destroy anyone who dares to continue an economic activity; this is the most worrying part because we are turning into a self-destructive society, and frightening away even those who want to help us get out of the socio-economic mess our politicians have created over the years.Massive resource shortfalls of all varieties, sliding economic growth, pervasive corruption and defiance of the law, and violence on the streets have made Pakistan, a very high-risk country that is also close to bankruptcy. Isn’t it tragic that we sidelined Jinnah’s values–the values that elevate nations to the highest pedestal and make the world respect them? It is time we recognized this big failure, and made amends.

The increase in FDI inflows was evident from the fact that foreign companies invested $187.1 million in various sectors of the economy compared to $186.4 million during the corre-sponding month last year. Nevertheless, the FDI outflows including divestments and repatriation from the foreign inves-tors stood at $61.7 million as against the outflows of $126.8 million during October 2011. Oil & gas exploration, trade, electrical machinery, and transport were the main sectors which attracted a significant amount of foreign direct investment in the country during the month. Economic experts say that improvement in FDI inflows is a positive sign for the economy, showing revival in investors’ confidence in Pakistan. However, during the first four months of the current fiscal year FDI plummeted by 24.2% to $244.4 million as against $322.7 million during the same period last year. The portfolio investment at the Karachi Stock Exchange stood at $126.4 million as against the outflow of $74.9 million during the corresponding period last year. During the month of Octo-ber the portfolio investment was recorded at $30.1 million as against the outflow of $28 million last month. UK and Hong Kong are the major contributors in inflow with US$ 72 and $55 million respectively during the four months of the year. Pakistan has a long history of receiving project and non-project loans from International Financial Institutions (IFIs) like the World Bank and Asian Development Bank. However, such inflows have also declined in recent years. The IFIs seem reluc-tant to extend support in the absence of letter of comfort from IMF as Pakistan currently does not have any program with the Fund as IMF generally issues letter of comfort to countries which enter into a program with the Fund.Economic experts say that there is a dire need to attract large inflows of private and foreign investments to revive economic growth in the country. According to a study main causes of this sharp decline are political instability, law and order situation, energy crisis, corruption, lack of required infrastructure, lack of enforce-ment of contracts, comparatively less share of credit to non-government sectors and high corporate tax rates.Political stability is vital for the implementation of long-term consistent policies but due to frequent government changes, inconsistent policies have been a strong threat to foreign investors.

Pakistan’s on-going energy crisis has also been an alarming issue for foreign investors. The demand for energy has far exceeded the supply causing a vicious circle to start. The industries have to either put their production on hold or resort to alternative energy sources. This crisis has impacted the labor market causing hundreds of thousands of people to lose their jobs. Poor infrastructure facilities also contribute in pushing investors further away. Strong social and cultural factors have also been as issue to deal with by the foreign investors who misperceive Pakistan’s image and so are reluc-tant to make investments. Pakistan’s corporate tax rate is 35% of taxable income of a company. For non-residents a 15% tax is levied on the gross amount of royalties or technical service fees, and 30% for other payments under the presumptive tax regime. The tax structure also needs to be reviewed in order to attract foreign investment. According to the report of UNCTAD mentioned above, coun-tries in the region face various challenges which need to be tackled in order to build an attractive investment climate for enhancing development. The challenges facing the region are stabilization in Afghanistan, security concerns in Iran and Pakistan and macroeconomic as well as political issues in India. It points out that at the country level high political risks and obstacles have been an important factor deterring FDI inflows. Countries in the region rank high in the country risk guides of political-risk assessment services and political restrictions on both FDI and business links between countries in the region have long existed. This has deterred FDI inflows and negatively affected the countries FDI performance. However, recent development in the region have highlighted new opportunities in the wake of political relationship between India and Pakistan, the two major economies of the sub-continent, which have now being moving towards greater cooperation, with Pakistan granting India Most Favored Nation (MFN) status in November 2011 and India recently announcing that it will allow FDI from Pakistan. In Afghanistan, some FDI has also started to flow in extractive industries. The report forecast cautiously optimistic prospects saying that ‘whether countries in the South Asia region can overcome old challenges and grasp new opportunities to attract investment will depend to a large extent on governments efforts to further open up their economies and deepen regional economic integration.’

6,000

5,000

4,000

3,000

2,000

1,000

0

US$

Mill

ion

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

3521

5140 5410

3720

2199

1574

Foreign Direct Investment in Pakistan (US$ Million)


he latest findings of the US-based World Justice Project have ranked Pakistan as the seventh ‘most corrupt nation’ with one of the weakest and ineffec-tive system of accountability in the world, and

endorsed what the Supreme Court of Pakistan has repeatedly observed about this ongoing saga –the failure of the country’s crime investigative agencies. In this context, it is worth pointing out that even in April 2004, this saga was no less a threat to Pakistan and prompted a get together of the stakeholders to find ways of addressing it.I was one of the invitees, and as a part of the expert group that contemplated for two days on improving the taxation system to present its recommendations to NAB, participated in that conference. On my return to Karachi after this get together, I had penned down my perception of the fundamental issue that sustains a rise in corruption, despite all the efforts to contain it by the regulatory, supervisory, investigative and enforcement institutions including NAB, and advised Lt. Gen. Munir Hafiz (the then Chairman, NAB) my views.While the UN Conference on Anti-Corruption was a landmark event in more ways than one because the pervasive rise in corruption was brought to the fore in a befitting manner, the conference did not address the fundamental flaw–faulty school and college education systems–I had pointed to the fact that it will keep adding to the number of devious minds in spite of imposition of ever more-stringent anti-corruption laws. The exercise to instil integrity in human conduct has to be under-taken much earlier when the future managers of the state are at schools where the lasting contours of their personality are formed. As long as education systems that downgrade principles and values in favour of profit-oriented expediency–a trend rampant in the mushrooming business schools–remain intact, dangerously devious minds will keep coming out of these institutions to manage the state, business and industry. The code that needs urgent reform is the curricula taught at schools. This applies to every state, especially the big ones that indirectly influence all others, because they account for the bulk of the world trade. The events of 2002-03 were a rude shock because they unmasked the largest-ever number of crooks, fraudsters and criminals running some of the world’s biggest corporations whose failures had devastating consequences for their shareholders, employees and stock markets the world over. The disclosure shattered investor confidence at a time when it needed rapid revival to stem the recession that was engulfing the world. It was not appreciated that ethics, especially the critically important values of integrity and a sense of social responsibility, cannot be drilled into people’s heads at late stages in their lives, more so by governments which remain suspect in the eyes of the people for a variety of conduct unbe-coming the hallmark of which is their manifest disregard for maintaining equity between the rights and obligations of the citizens and the State.

Falling economic growth, rising unemployment, poverty, and terrorism speak volumes about the style of state governance all over the world. It has institutionalised inefficiency and corrupt- tion and led to economic chaos and pervasive lack of respect for the law. It has encouraged debasement of values, which is a slow process of death of the society as a whole. Yet, we punish only those who fall within the legal definition of murderers, but not the apathetic politician-bureaucrat-businessman mafia. Shouldn’t the law re-define killers? Shouldn’t it include those whose deliber-ate actions lead to widespread misery and consequent slow death of millions from poverty, deprivation and starvation?Our failure to redefine murderers is largely due to the gullibility of the media (including the Human Rights Commission) to the cold and faulty logic advanced by the politician-bureaucrat- businessman mafia to justify criminal transfer of advantage from the masses to the State and business and industry, who continue to misuse resources, especially cheap public savings. Does it bother anyone that small savers, who contribute the largest single chunk to bank deposit bases in any country, get a return that is way below the going rate of inflation? Doesn’t it amount to organized deception, and isn’t it the shortest route to spreading poverty among the largest section of a country’s population?We don’t seem to realize that, going by the recent record of politicians everywhere, democracy's chances are worryingly low because people have little trust left in them. Statecraft (Western democracies included) is now a decadent art. The sustained economic decline of Europe, US and Japan has shaken our belief in democracy. In the developing countries, politicians continue to treat the electoral constituencies as their ancestral property, turning them into private battlegrounds; their erstwhile cohorts in state bureaucracies lend a helping hand in weakening institutional arrangements only to enrich themselves at the cost of the people. It is this setting that bodes ill for whatever you may try to do to nab corrupt organizations and individuals. In a TV talk show, the sitting Chairman of NAB admitted the pressures he was experi-encing from the political circles, but emphasized the fact that anti-corruption outfits need to develop the capacity whereby it can prevent crime from taking place because catching a thief after he has committed a crime is a tough task requiring produc-tion of evidence that usually is well concealed. Besides, criminals escape abroad, courtesy violations of the ECL.

Post-scriptDuring that conference, I assisted in drafting of that part of the anti-corruption strategy, which was aimed at containment of tax evasion. This formed part of the conference brief that was later published by NAB. I had also arranged NAB’s contacts with Taseer Hadi Khalid & Co. as consultant for restructuring of NAB’s organizational setup. I don’t know how far it helped because NAB lost contact with me thereafter.

by Raza Khan

ECONOMY

ince time immemorial human societies and its mem-bers have been interacting unabatedly. In every epoch, the nature, direction and frequency of this interaction has been different largely depending on

the political organization on the international level. With the establishment of extant modern nation-state system under the Treaty of Westphalia in 1648 international inter-action and consequent interdependence became more organized, regulated by legal procedures and consequently cumbersome. As the state system kept on strengthening and evolving and in the process became more rigid the international interdependence became unidirectional. The state to state interaction during the period between estab-lishment of the nation state system (1648) and the begin-ning of 2nd World War (1939) remained restricted more or less to limited political economic interaction. However, contemporary interstate relationship is multifac-eted and complex with various actors and institutions, mostly non-state. This has given a new shape to our World and the interaction of the people globally. Although the institution of state is still very strong and relevant despite the emer-gence of various non-state international actors but if a state has to take fullest advantage of the situation its strategists ought to have a deep understanding of the changed interna-tional system and its institutions and actors. It is equally true for Pakistani foreign policy framers and strategists.The multidimensional nature of contemporary interna-tional relations has been dubbed as Complex Interdepen-dence. The concept of Complex Interdependence was first brought to the fore by Robert Keohane and Joseph Nye as a neoliberal critique of the realist view or explanation of the world. Complex Interdependence is the idea that states and their fortunes are inextricably tied together. The theo-rists recognized that the various and complex transnational connections and interdependencies between states and societies were increasing, while the use of military force and power balancing are decreasing but remain important. Against the backdrop of Complex Interdependence it is believed that there has been a decline of military force as a tool of policy and the simultaneous increase in economic and other forms of interdependence between and among states leading to the probability of cooperation rather than conflict. This needs to be specifically learned by Pakistani strategists, who have always been for the use of military might as a fundamental tool of policy. In the post World War II era countries interests have become increasingly intertwined. The monumental growth in trans-national corporations has blurred state boundaries putting on the traditional realist assumptions about the centrality of state on the defensive intellectually. The concept of Com-plex Interdependence can be explained, most appropriately, against the backdrop of realist worldview. Realists contend

S

Complex Interdependence:Transforming Int’l Political Economy

Joseph Nye Robert Keohane


n December 27, PPP and Pakistanis observed the fifth death anniversary of Mohtarama Bena-zir Bhutto, who was assassinated this day in 2007. What is odd, however, is the fact that,

despite the PPP being in power beginning March 2008, the exact cause of her death, and the characters who are involved in her assassination, remain a mystery.According to the UN inquiry Commission, doctors who examined her body were of the opinion that she died of a severe head injury as she hit the edge of the roof opening of her vehicle. At the Rawalpindi General Hospital, Dr Qudsiya Anjum Qureshi cleaned Ms Bhutto’s head, neck and upper body. She saw no wounds other than the one to the right side of her head and the thoracotomy wound. She was next dressed in hospital clothing and her clothes given to her maid. The doctors stated that in their opinion there was no bullet mark on her head or her body. The doctors also didn’t see her dupatta, which was missing. Ms Bhutto’s death certificate was filled and signed by the hospital’s senior Registrar Dr Aurangzeb, who recorded the cause of death as “to be determined on autopsy”, but autopsy wasn’t conducted because Mr Asif Ali Zardari disallowed it. On December 30, speaking to the press he said “I have lived long enough in Pakistan to know how post-mortems are done.... I know the forensics reports are useless. We know what the wound is and how it was caused”, explaining his reasons for rejecting the official requirement of an autopsy, which left the real cause of Ms. Bhutto’s death unclear. Besides Rawalpindi hospital’s report, the UN Inquiry Com-mission as well as the Scotland Yard inquiry team also couldn’t say with certainty whether Ms. Bhutto was shot and killed. As per Scotland Yard’s video analysis, the flash of the bomb blast appeared just over two-thirds of a second after Ms. Bhutto disappeared from view.Ms. Butto’s burial, without the autopsy of her body, created many doubts. Although Mr. Zardari admitted his role in disallowing the autopsy, Interior Minister Rehman Malik said that post-mortem was dropped on the instructions of the police officer on duty or this contradiction created doubts about who prevented the autopsy. Nor has Rehman Malik explained where was he when Ms. Bhutto was return-ing from Liaquat Bagh–the venue of that unfortunate public meeting–when she was fatally injured.The investigation into this sad event too did not proceed at the pace it should have, though by February 14, 2008 police had arrested 5 suspects. The trial finally began on February 29; in November the Anti-Terrorist Court (ATC) framed the charges, and in the summer of 2009, the ministry of interiorappointed Chaudhry Zulfiqar Ali as special prosecutor. But in 2009, the federal government took over the investigation and the FIA formed a new Joint Investigation Team (JIT) to oversee the investigation, and in August 2009, the then

Deputy Attorney General and a member of the federal JIT requested the ATC to adjourn the case till the completion of FIA’s investigation. Later, FIA included in its challan then President Gen. (r) Musharraf, then Rawalpindi police chief Saud Aziz, and SP Khurram Shahzad Haider, both responsible for the security arrangements at the public meeting on Dec 27, 2007. But these two officers were arrested for their likely involvement in Ms. Bhutto’s assassination only in 2011–three years after PPP assumed power. Besides their delayed arrest, progress in the case was practically zero until October 10, 2010. How the proceedings were stretched is visible from the fact that until 2012, eight challans were filed. In 2010 the third challan (FIA’s first) was filed as late as May 25, the fourth on June 11, fifth on November 11 and the sixth on December 12. The seventh challans was filed on February 2, 2011, and the eighth and the last on June 6, 2012. That’s not all; 5 differ-ent judges headed the trial court since the case proceedings began on February 29, 2008.Yet the mystery remains unresolved, and gives rise to huge doubts about the political regime’s integrity because, since December 30, 2007, when Mr Zardari first spoke about Ms Bhutto’s assassination, PPP leadership has done much to confound the mystery. During that press conference, Mr Zardari referred to Ms. Bhutto’s email sent to Mark Siegel that indicted the then President, Gen. Pervez Musharraf because she accused him of non-seriousness about her security. Mr Zardari used the term ‘dying declaration’ for that e-mail because it nomi-nated her potential killers, simultaneously calling PML-Q as ‘Qatil’ League. Doing so, he repeated Ms Bhutto’s accusa-tions against Choudhury Pervaiz Elahi along with former ISI chief Lt. Gen. Hameed Gul, and the then IB chief Ejaz Shah, of planning her assassination. In addition thereto, the government hasn’t disclosed a harsh response it received to its objections over the UN inquiry report. That response had accused the government of protecting the conspira-tors.To the ordinary, Mr Zardari’s sincerity is rendered further doubtful because PML-Q (‘Qatil’ League) is now a partner in the PPP-led coalition regime, and Choudhury Pervaiz Elahi (allegedly a partner in the assassination plan), is now the deputy prime minister in the coalition government. In the election year, it may prove a deadly liability.

that the state is the dominant actor in World politics and that violence and military force are the fundamental means by which states try to achieve their goals and further their interests. Diametrically opposed Complex Interdependence stresses upon cooperation rather than conflict in international relations and this is what happened since the end of Second World War. The advocates of Complex Interde-pendence recognize that violence and conflict have not vanished altogether from interstate relations; still they think non-security related issues have gained more significance like international monetary relations and global environment concerns. The day-to-day affairs of states have more to do with promoting cooperative economic interaction than with military and security matters. In this context the statement of Pakistan Chief of Army Staff, General Ashfaq Pervez Kiyani, some months back while visiting Siachen, that the yardsticks of security and development of a country is the availabil-ity of basic amenities to the majority of the people than military might, really sounds significant and that of a statesman. The complexity of contem-porary interdependence between and among states can be divided into four separate dimensions: its sources, benefits, costs, and symmetry. As a theory Complex Inter-dependence challenges the core concepts of the previ-ously dominant and still very relevant paradigm of realism. The key beliefs of realism are: States are coherent and dominant actors of World politics; Force is a usable and effective instru-ment of policy; Hierarchy of issues in World politics led by issues of military security or ‘high politics’ which is dominate the ‘low politics’ of economic and social affairs. These realist assumptions define an arena of World politics which is characterized by continual conflicts among states and the conditions so volatile that use of force is possible at any time. Each state attempts to defend its territory and interest from real or perceived threats. Political engagements and alliances between states are interest-driven and last as long as they are mutually beneficial. Moreover, transnational actors do not exist or an extremely unimportant. Only the adroit use or threat of force enables states to survive. Whereas, the world system could be held in a balance if the states-men succeed in adjusting their interests. Each of the realist assumptions can be challenged. Simultaneous challenging these one could prove that in the international arena actors other than the states also take part and no clear hierarchy of issues exists. More-over, in such conditions with multiple actors and no clear

issue hierarchy, force is not at all an effective instrument of state policy. All these characteristics come under the purview of the concept of Complex Interdependence. The salient features of the Complex Interdependence of today’s World affairs include firstly multiple channels. These channels can be summarized as interstate, trans-governmental and transnational relations. Secondly, the presence of multiple issues between and among states is another feature of the concept. The agenda of interstate relations, unlike realist military-security focus of inter-national interaction, consists of multiple issues. How-ever, these multiple issues are not arranged in a hierarchy in a clear and consistent manner as is in the case of realist assumptions. These issues are dealt with by a number of government agencies and departments and are not entirely subject to the business of foreign offices. Thirdly, another characteristic of Complex Interdepen-dence is that the military force is not used by govern-

ments toward other govern-ments within the region, or on the issues, when condi-tions of Complex Interde-pendence prevail. However, military force may be impor-tant in these governments’ relations with governments outside the region. Under Complex Interdepen-dence there are a variety of state goals—not merely the physical survival of the state—that must be pursued. Although there is an absence of clear hierarchy of issues, goals will vary by issue and may not be closely related. Every bureaucracy will have to pursue its specific institu-tional goals although several agencies may reach agree-ment on issues that affect all national goals.

As there are multiple channels of contact among societ-ies, this further blurs the distinction between domestic and international politics. Interestingly, under Complex Interdependence the making of political alliances, once believed to be limited to domestic politics, are no longer confined to within the state; political coalitions could be formed even on international level. In particu-lar, international environmental NGOs have challenged the theory of state sovereignty by linking to local resis-tance movements. They have eroded both the territorial and national borders through these transnational alliances. Their work with local level resistance move-ments has allowed these international actors to inter-vene into the domestic affairs of states. This interven-tion results in the internationalization of the local movements.The more conditions of Complex Interdependence prevail the more one can anticipate the outcome of political bargaining to be influenced by transnational relations. For instance, MNCs could be significant as their

International relations haveexperienced significant

transformation in the post World War period and

especially after the Cold War era, these relationships

have attained a newdirection. Today’s

international relations are really complex in the context

of their outcomes forindividual, societies and

governments.





he general perception seen among the people today is that, seemingly our politicians in general have lost the credibility of whatever they say or commit. The President and the Prime Minister

have repeatedly expressed their government’s resolve that elections would not be postponed, that they would be held “on time,” and that they will be “free‚ fair and transparent.” Addressing a cabinet meeting in Islamabad recently, the Prime Minister said, “Holding free‚ fair and transparent elections is my top priority.” At a public gathering in Kot Najibullah, he reiterated this commitment by saying “This time, there will be no manipulation, and the voters will be able to exercise their free will to elect their representatives for the assemblies.” Despite these assurances, however, the political rumour mills are churning out continuously and vociferously the doubts about whether or not the polls would be held on time and that, if they are held at all, would they be credible, free, fair and transparent, as claimed. Recent political developments have further contributed to the creation of an environment of uncertainty which could be used as an excuse for postponing the elections. Address-ing a mammoth gathering at Meenar-e-Pakistan on Decem-ber 23, 2012 in Lahore, Dr. Tahirul Qadri, chief of Tehri-e-Minhajul Quran called for electoral reforms, and gave the government three weeks’ ultimatum to install an indepen-dent interim government in consultation with all the stake-holders including the army and the judiciary, which could hold fair and transparent elections within the stipulated 90 days, or more if so required, to meet all mandatory consti-tutional obligations in order to have an “honest, sincere and trustworthy” leadership capable of steering the country out of the crises under a real democratic system. At a time when the elections are round the corner, such a demand, though appreciable, is seen as untenable as it is improbable, if not impossible, to give it a practical manifes-tation in the short time left for the coming polls. The demand is seen in certain quarters as contradictory, and in conflict with the provisions of the Constitution of Pakistan. Although Dr. Qadri has repeatedly claimed that his agenda is not to postpone the polls but to facilitate fair and free elections providing for the election of honest and sincere leadership, can a government, which has not been able to introduce the desired electoral reforms in its 5-year term of office, be expected to do so in three weeks’ time? On the other hand, the Election Commission of Pakistan (ECP) has announced that political parties failing to have held their in-party elections in terms of Article 14 of Politi-cal Parties Order 2002 would not be allotted symbols to contest the elections. Some of the parties including PML-N, PML-Q, MQM, Jamat-e-Islami, Tehrik-e-Insaf and JUI, etc., did fulfill this requirement. However, of the


role as independent entities and as tools manipulated by governments. The attitudes and policy stances of domestic groups are likely to be affected by communica-tions, organized or not, between these groups and their partners abroad. Here the example of terrorist groups is quite relevant. One can also see these challenges to sovereignty by look-ing at the effects of NGOs on the territorial and national borders of the state. These demarcations are essential to the concept of state sovereignty. NGOs as wells as MNCs are entangled in many transnational relations which cut across national boundaries. Technol-ogy has allowed for the effortless electronic transfer of information and capital across territorial boundaries. In 1992, international NGOs distributed $8.3 billion to developing countries. The flow of such resources across territorial borders undermines state supremacy over internal activities. State loyalties and identity are also diminished as a result of NGOs. National boundaries are necessary for the theory of state sovereignty and are eroded by NGO activity. This blurring of national interest by pursuance of a narrow interest of a government agency creates serious problems for the top political leaders of government. The reason is that under Complex Interdependence centralized control becomes difficult because bureau-cracies contact each other across national boundaries without bringing in the formal procedures and require-ments of foreign offices. Resultantly there is less certainty that all the components of a state will act and think in unison while dealing with other governments or all the components will interpret national interests similarly

when negotiating with foreigners. The negative fallout of this condition is that the state may turn out to be multifaceted and even schizophrenic. Moreover, there is a compartmentalization of national interests as on each issue there will be a different definition of national interest and it may be different at different time and defined differently by various governmental agencies. Pakistan is a typical example of this situation where different institutions have different interest presented as national interest. International relations have experienced significant transformation in the post World War period and espe-cially after the Cold War era, these relationships have attained a new direction. Indubitably, the interstate relationships have really changed into international relations with individuals, groups, organizations and governmental bureaucracies interacting with their counterparts in other countries directly and with decreasing governmental control of their respective states to channelize these interactions. Today’s interna-tional relations are really complex in the context of their outcomes for individuals, societies and govern-ments. The complexity of international interactions although has brought huge benefits to all and sundry but simultaneously has also given birth to novel prob-lems for people and governments. These problems are at times hard to negotiate having large-scale implica-tions. The foremost and biggest impact of the evolu-tion of the complex networks of international interac-tions is that it has eroded the state and its institutions and this does not augur well for the stability of interna-tional order.


was held on January 2, 1965 in which the president and the members of the assemblies were elected through the votes of 'basic democrats' in their capacity as members of urban and regional councils. The election was allegedly rigged by Conven-tion Muslim League led by the then Gen. Ayub Khan to defeat the combined opposition led by Mohtarma Fatimah Jinnah.The only election generally believed to have been free and fair, was that of 1970 under the then dictator Gen. Yahya Khan. But then we lost the Eastern wing of the country consequent to the election results as their implementation did not reflect the popular will of the people. All the elections held subsequent to 1970 were allegedly flawed and rigged. Keeping in view the past history of elections in the country, it is hard to endorse the oft-repeated statements that “PPP is committed to ensure free, fair and impartial elections in the country’’, and that “the nation should shun despondency because desperation and hopeless-ness are a sin in Islam.” Generally speaking, for an election to be free, fair and impartial, one of the essential prerogatives is that it should be held under an independent, non-partisan electoral organization that ensures that the 'playing field' is accessible by all eligible voters, parties, and candidates and that there is no interference from the incum-bent government through the use of executive machinery to win and remain in power against the will of the people in favour of its removal. Measured on this yardstick, even modern elections in many countries are not truly free and fair. Therefore, monitor-ing and minimizing electoral fraud is an ongoing task even in countries with strong traditions of free and fair elections.In the current scenario in Pakistan, indications are that the goal of fairness and transparency may be achieved. The presence of an independent ECP, its avowed vision and determined moves so far witnessed, seem gradually shedding away the apprehen-sions about any lack of its capacity and capability, and lead one to believe that the challenge of generating a genuine electoral environment will squarely be met if the issues coming in its way are amicably settled. The several issues that may impinge upon the election results the most emergent and important are:• Incomplete voters’ list• Manipulated constituencies• Compromised polling stations • Law and order around polling stations• Code of electoral conductDespite the good work done by NADRA, the voters’ list has been found to be incomplete. Reportedly, of the 8.6 million eligible voters, names of around 3 million are missing; they have neither been registered at their permanent addresses outside Karachi nor included in the list of voters maintained for Karachi. Under an order of the Supreme Court, voters lists need to be updated. It is appreciable that the ECP has volun-tarily taken upon itself the onerous responsibility of rectifying this distortion through door-to-door re-verification by its staff and including Army personnel in those teams, for security of the verifiers. ECP has announced the schedule of door-to-door campaign for verification of voters’ lists in Karachi.The delimitation of the constituencies is yet another tricky issue amenable to solution. Since the correction of the voters lists and delimitation of constituencies, are Karachi-specific, and have drawn a strong reaction from the MQM, it calls for deftness to resolve them amicably. MQM has expressed its reservations about these issues, and perhaps rightly so, and demanded the exercise, if needed, to be undertaken throughout the country. MQM has described the Karachi-specific exercise

of delimitation without a census, as pre-poll rigging, and warned that it could have dangerous consequences. One can hardly disagree with MQM’s point of view, but taking up such an exercise on an all-Pakistan basis is a time-consuming job, and may call for postponement of the elections. It is to be seen how deftly the ECP is able to resolve this serious issue.For parties that claim to have their vote bank intact, issues like correction of the voters list or delimitation of constituencies may hardly have any adverse impact on the election results. What is important is to ensure that voters are encouraged and facilitated to come to the polling stations and cast their votes freely accord-ing to the dictates of their conscience. It is heartening to note that, to facilitate voters in casting their votes, the ECP has decided that the number of polling stations will be increased ensuring that they are set up at a distance of 2 kilo meters each.Equally important is the need to maintain peace and order at and around the polling stations. Historically, the powerful among the contenders are used to taking over polling stations by use of force. The ECP decision to deploy the army person-nel inside and around the polling stations will hopefully make the polling exercise peaceful and transparent. Last but not the least important is the need for adoption of a code of electoral conduct and ensuring maximum electoral turnout to make the results truly representative.It is for the first time in the chequered history of Pakistan that a democratic setup will be completing its full five-year term by 17th March 2013. Thereafter, a caretaker government is to be installed which will be bound to hold the general elections within 90 days. Certain quarters are voicing the fear that attempts may be made to create a situation that may help the government to defer the elections for a year or so. The height-ened incidents of killings in Karachi and other parts of the country are being quoted as part of such machinations. The demand for undertaking country-wide delimitation of constitu-encies is also being considered an attempt to facilitate for the postponement of the elections. Should that be true, it would be tragic. The ECP, the politicians, and the common man need to be wary of such machinations and avoid playing into the hands of those who may be out to delay the elections.The forthcoming elections in Pakistan will shape the direction the country will take in the years ahead. According to the National Democratic Institute (NDI) that visited Pakistan between December 16 and 21, to review the political environ-ment and framework for the elections to national and provin-cial assemblies, “2013 elections present an opportunity for Pakistan to continue its reform momentum and advance its democratic transition,” pointing out that the polls could mark in Pakistan’s history first time that an elected civilian govern-ment transferred power through a democratic process’’. Holding of free, fair and impartial election is a moral as well as constitutional obligation. On its part, the ECP has made elabo-rate arrangements to ensure transparency and fairness in the elections to expose the popular will of the people. But the former Canadian Prime Minister, Joe Clarke, who visited Islam-abad at the head of a multinational delegation for pre-election assessment of electoral process, trends and attitudes, termed the arrangements for the forthcoming general elections as ‘satisfac-tory or credible’ but not ‘perfect’. One hopes and wishes that the coming elections are held on time, are peaceful, fair and transparent, and in accordance with the spirit of the Constitu-tion of Pakistan. If this can be ensured, it would be a feather in the cap of the ECP and of the sitting government.

by Mubashir Malik

hen I was growing up, being the only son and having an elder sister, I would almost always get the stick for being…. well, just being myself really. The fact that my sister could get away

with murder, if she wanted to, really consumed me away from inside, even more so for the fact that my parents always thought that she could ‘do no wrong’. On one occasion I turned the sprinklers on in the garden, and ran through the water a few times until I was drenched. The following hours saw the wrath of my mother and the outpour of anger and concern as she dried me off preventing me from falling sick.My sister on the other hand did exactly the same thing with my cousin the following week, and didn’t get reprimanded. I was at an intellectual loss to understand how there could be one rule for her and another for me. It was beyond me. But then again it was petty sibling rivalry and animosity. One would never expect this type of differential treatment to be a benchmark practice in the modern world’s Capitalist Economies. Of course not, there is one rule for them and another for us. Nonsense! Is it, or isn’t it?Those young financial aficionados amongst you, who have yet to inherit the perfidious grey hairs on your heads, will probably not remember a man by the name of Agha Hassan Abedi – a Pakistani financier, who founded the Bank

of Credit & Commerce International (BCCI) along with United Bank Limited (one of the largest institu-tions in Pakistan today).Abedi befriended the world’s elite, namely the rising oil tycoons of the Middle East, and with their invest-ment capital he created BCCI in 1972, incorporated in Luxembourg, with Head offices in Abu Dhabi. However, barely two decades after its inception, it was accused of various fraud & bankruptcy allegations, eventually being forcefully shut down by the Bank of England and authorities in 1991.Within 10 years of its birth, the growth of this Arab-owned, Pakistani managed bank was phenomenal. It became the fastest growing bank, with a network of 400 branches in over 72 countries. At its peak in the late 80’s, BCCI became the 7th largest privately-owned bank in the world in terms of assets alone. This was an enormous feat by any standards, especially by a bank that was originally set up as an institution to help bridge the gap between the Third world and the West.

W

HSBC vs. BCCI –Hypocrism at its best

COVER STORY

Agha Hassan Abedi


n January 2013, an IMF team is scheduled to visit Pakistan to explore the prospects of fresh lending. On November 21, 2012, IMF concluded its first post-programme monitoring to explore the possibilities of

‘Exceptional Access’ under its 2008 Stand-By Arrangement (SBA) implying a request on Pakistan’s part to avail the last tranche of the SBA that IMF didn’t disburse because of poor progress under the SBA. The pressure built by payment of the IMF tranches as they fall due, and the expanding Trade and Balance of Payment deficits eroding SBP’s exchange reserves, are weakening the Rupee–a worrying prospect. Given the continuing trends in these two deficits, the IMF projects that (excluding the gold and forex deposits with SBP) by June 2013 official exchange reserves will decline to $7.38bn, and pose a serious threat to sustaining the Rupee’s exchange rate with grave implications for inflation, which could rise to double digits by June 2013. In early December 2012, official reserves

had already declined to $8.51bn making it likely because, by June 2013, the Rupee would be backed by a very low level of exchange reserves. The fact that the Rupee had already depreciated by around 8 percent compared to its January 1, 2012 level, and was on a slide allthrough December 2012, was an indication of its depreciating further unless fresh backing in the shape of foreign inflows could be provided.According to the IMF “The situation is compounded by an uncertain global environment, and a difficult domestic situation, as well as adverse effects of natural disasters.” IMF had emphasised that strong policy measures and deeper reforms were critical to addressing vulnerabilities, boosting a sustainable growth, and containing poverty. The most worrisome aspect of this scenario is that, throughout the past five years (during which IMF’s fund-ing was available) the government failed to inject tangible stability in the economy. According to the IMF it “led to a decline in State Bank of Pakistan’s foreign exchange reserves

Naturally, the prying eyes of the world were on BCCI. Undeniably, there were factions of the Western banking elite, traditionally controlled by the Wall Street or regulators like the Bank of England that saw BCCI through the doctrine of suspicion. The bank’s new plush London head-quarters at 100 Leadenhall Street, in the heart of the City’s financial district, became notorious amongst the traditional high street banks as they wanted to get a piece of the success cake. To be brutally honest, I’m not at all surprised. BCCI became a victim of its own success. A former BCCI executive is quoted as saying “While other banks were sleeping and crawling, BCCI was awake and sprinting”.Here was a bank that came literally from nowhere, had installed conspicuous branches dotted around the most sought after prime locations in central London, attracting high net worth individuals as depositors, and was growing at a rate faster than it takes Dominic Strauss Kahn to unzip his trousers.It is said that if you walked into any BCCI branch, it would feel and look as though you have walked into the lobby of a luxurious yet classy 5-star hotel. The only ATM machines outside world famous Harrods store in Knightsbridge were those of BCCI. They had almost 4 branches alone on the small stretch of road that is called ‘Park Lane’, in London’s exclusive Mayfair district.Abedi had transformed the meaning of consumer and personal banking in the real practical sense. Normally in high street banks, customers were used to tedious long queues, derelict shop fronts, dull interiors and gloomy carpets and lighting. In BCCI, a normal walk-in customer was treated to leather sofas, marble décor, impeccably dressed personal bankers greeting you at the door and helping you in the queue in advance to save time (a service only recently adopted by the high street banks), hot/cold drinks for free served by dedicated catering staff. In addition there were always a string of chauffeur driven Mercedes limousines parked outside main BCCI branches to transport key clients & executives. This was whole new personal banking revolu-tion, and Agha Hassan Abedi was its pioneer.So what went wrong, and how did it all go pear-shaped for this promising ambitious Third World bank that thousands of people entrusted with their hard earned money? Well, for the Full Monty, you will have to read my book due for release next summer. However, for the eager, zealous and impatient readers I shall give you the quintessence in a nutshell.Agha Hassan Abedi knew that his bank was the next big thing and on target to possibly being the largest bank in the world. He was forging relationships with political heavy-weights and rubbing shoulders with the likes of former US president Jimmy Carter and the Pope. The more notorious clientele included Saddam Hussein, Manuel Noriega, Bin Laden family and more notably the CIA.Abedi’s enemies and competitors also knew this. However, in order to really get to where he wanted to be and fulfill his vision, he needed a presence in the USA. The banking federal laws within the USA are such that it was very difficult for BCCI to make a considerable impact as a foreign bank. Even in the UK, BCCI was never given full banking status, but only as a ‘licensed deposit taker’. Therefore, to create a foothold in America, BCCI became a majority shareholder and took control of First American bank (one of America’s largest banking networks) through some influential front men and investors. On paper the deal was legitimate and signed

by wealthy Saudi and American investors, however the federal authorities, who were already suspicious and looking for dirt on BCCI, soon realized that the bank was pulling all the strings at First American. Even though BCCI was accused of other activities like money laundering, accounts manipulation, and insolvency the main catalyst and the cherry on the cake was the acquisition of an American bank which eventually sparked BCCI’s debacle and downfall. It was unthinkable for the Americans to digest that a once unknown bank from the Middle East was replacing and overtaking the banking world, leaving the likes of Citibank, JP Morgan Chase and others behind.The guillotine came down on BCCI in July 1991. The bank’s assets were frozen and the thousands of depositors of BCCI were in frenzy, since they feared losing their life’s savings amidst reports of the bank’s poor liquidity and insolvency. The Bank of England accused BCCI of being bankrupt and an apparent ‘hole’ uncovered with apparent losses of up to £1billion. The majority shareholder of the BCCI at the time Sheikh Zayed bin Nahayan Al Nahyan, ruler of Abu Dhabi, warned the authorities not to close the bank and that he will personally guarantee the reported ‘losses’ of the bank and implement a cash injection of £1billion. He went on further to the extent that he will order a shake up and entire re-structuring of the bank worldwide with new staff and management. The Bank of England had already started a similar re-structuring of the bank prior to its closure, but still decided to close it down instead. The conclusion being that when the head of the UAE Royal family (majority shareholder) gives you a guarantee of funds, accepts responsibility, co-operates with restructuring the bank and re-assures the world of the financial stability of the bank with his personal backing – and then the bank STILL ends up being forced shut by the Western authorities, then we really have to question whether something else was at play here.Now the first thing coming to all of your minds is that this was a typical tale of East blaming the West, blaming the misdoings of a few corrupt Pakistani bankers on Western jealousy, conspiracy theories galore, and racism. However we only need to read the front headline of the newspapers of the past week to figure that one out. It doesn’t take Einstein to see the double standards and hypocrisy in the aftermath of the world economic meltdown that started in 2008 with the Lehman Brothers failure. Now let’s grab a hot cup of Horlicks, some MnM’s or some ‘lassi’ if you are



which determine the SBP discount rate to which are linked all the money market rates. Backed by claims about falling inflation and pointing to weak investment environment, in July-Dec 2012, SBP brought down its policy rate by a cumulative 250 basis points (including the cut announced on December 14). This bolstered the argument that monetary policy is helping fund the fiscal deficit. SBP’s direct lending to the state, and injection of liquidity in the banking sector to assist banks in buying government debt securities increased the currency in circulation, pushed up inflation and speeded up depreciation of the Rupee, which reflected that SBP was under pressure to compromise its independence. IMF is of the opinion that SBP needs ‘real’ independence in deciding on the objectives and profile of its monetary policy because sustaining a low level of inflation requires a prudent monetary policy that is supported by very substantial fiscal adjustments. Only then will the pressure for funding fiscal needs ease that hike up the demand for money and cause inflation to rise. IMF has underscored the need for reducing the large fiscal deficit, which is imperative for restoring macroeconomic as well as external stability. Achieving the governments’ 2012-13 deficit target requires broadening the tax net to collect higher amounts of key taxes and reducing subsidies in a way that still protects the vulnerable. In the long run, however, strengthening the fiscal position will require creating space for investing in the crumbling physical infrastructure and on projects that lower poverty–aims whose realization calls for comprehensive and credibly implemented reforms to ensure the transparency of expenditures and substantially improved collection of tax and non-tax revenues. The fiscal consolidation effort must focus on changes in tax policy to rationalize it, and also ensure its compliance by all–taxpayers as well as taxation authorities. Presently, the government isn’t focused on beginning a process of imple-menting comprehensive tax reforms; the focus is on a “tax amnesty scheme” that, it claims, will encourage the inflow of external resources to the tune of Rs 15 trillion, and additional Rs 150 billion in taxes. This is a reflection of the wealth Pakistanis are suspected to have stashed away abroad, as well as on the prolonged period of bad administration in the country that prompted the citizens to stash their wealth away instead of investing it in Pakistan’s economy. The tax amnesty scheme was not seen by many as the right course for resolving the long-running fiscal deficit issue. On the contrary, it was likely to serve as a disincentive for the honest taxpayers to go on paying taxes. Some IMF directors had there-fore urged reconsideration of the amnesty scheme being devised by the Finance Ministry. This wasn’t the first time the IMF had expressed its reservations over the merits and ethical aspects of the tax amnesty, that the government seems hell-bent on granting. After the IMF’s unfavourable reaction to the tax amnesty scheme, the only change in the government stance has been to limit the period of amnesty to 75 days, which is a reflection of the importance it gives to morality and ethics in the affairs of the state.IMF did recognise the ‘political’ difficulties in implementing a nation-wide VAT collection system. This was odd because the real issue is FBR’s inability/reluctance to devise credible and practical record keeping systems that should be adopted by businesses, and preparing a committed FBR inspectors’ workforce to verify the implementation of that system by all businesses. Instead, IMF directors advised the authori-ties to consider credible alternative tax collection systems

inclined to fall asleep afterwards, and go through this list of financial institutions with scandals:Barclays Bank PLCBarclays Bank was recently fined £290 million because of its involvement in the Libor scandal. What does that mean? I hear you all cry.It’s the London interbank offer rate, an interest-rate bench-mark for many other rates, from commercial loans to mort-gages. Libor is also an important index for derivatives, which are complex agreements whose value derives from a benchmark.Libor is the most widely used interest rate in the world. Estimates of how much is tied to Libor vary from $350 trillion to $800 trillion. To give you a rough estimate, $350 trillion would pay for all US government spending for the next century. Some banks, including Barclays, artificially inflated or deflated their rates, depending on what would benefit Barclays’ the most. Some may have deflated their rates to give the impression that they were more creditwor-thy than they actually were.During the financial crisis of 2008, the rate was more of an estimate, since banks weren’t lending to anyone. Between January 2005 and June 2009, Barclays’ derivatives traders made a total of 257 requests to fix Libor and Euribor rates, according to a report by the FSA.In June 2012, Barclays admitted to misconduct and the UK’s FSA imposed a £59.5m penalty. The US Department of Justice and the Commodity Futures Trading Commis-sion (CFTC) imposed fines worth £102m and £128m respectively, forcing Barclays to pay a total of around £290m. Two days later, chief executive Bob Diamond said he would attend a Commons Treasury Select Committee, and that the bank would co-operate with authorities. How-ever, he insisted he would not resign. The same day, Bank of England governor Sir Mervyn King called for a cultural change, but ruled out a Leveson-style inquiry into the banks. Sounds very flaky to me! Had this been BCCI, it would’ve been a different story. Still reading? Good.JP Morgan & ChaseJP Morgan has had to pay fines on 3 occasions in four years to settle regulatory allegations that it mishandled customer accounts. In 2009, JPMorgan’s futures broker paid $300,000 to settle CFTC allegations that it co-mingled accounts and created a $750m shortfall in customer funds. The shortfall was cleared up the next day, but the CFTC faulted the bank for its delay in notifying the regulator. The FSA fined JP Morgan Securities £33.32m ($48.2m) in 2010

for failing to protect its clients’ money by lumping it in with its own over a period of almost seven years.Under the FSA’s rules, firms are required to keep customers’ funds in separate accounts to protect it in case the financial firm becomes insolvent. More recently, the CFTC alleged that the bank mishandled Lehman Brothers’ customer funds for almost two years before the broker filed for bankruptcy court protection in September 2008. The bank allegedly counted customer money when calculating how much credit it would extend to Lehman. So again the bank settled with the CFTC for $20million with regard to Lehman. The commis-sion also alleged JPMorgan did not return the customer funds until it was ordered to do so almost two weeks after the bankruptcy. Last but not least one of JP Morgan Cazenove’s most senior bankers Ian Hannam resigned after the FSA announced it was fining him £450,000 for market abuse. Shocked? Continue reading.Goldman SachsEndless scandals! Just to name a few: 1) $60 million settlement for Massachusetts subprime mort-

gages. 2) Involvement in European sovereign debt crisis. Goldman

Sachs is reported to have systematically helped the Greek government mask the true facts concerning its national debt between the years 1998 and 2009.

3) Involvement in AIG bailout scandal plus many more. 4) Insider trading.Morgan Stanley1) Paid $125 million in order to settle its portion of a $1.4

billion settlement relating to intentionally misleading research motivated by a desire to win investment banking business with the companies covered.

2) Morgan Stanley settled a sex discrimination suit brought by the Equal Employment Opportunity Commission for $54 million on July 12, 2004. In 2007, the firm agreed to pay $46 million to settle a class action lawsuit brought by eight female brokers.

3) The New York Stock Exchange imposed a $19 million fine on January 12, 2005 for alleged regulatory and supervi-sory lapses.

Sexual discrimination cases and employee dissatisfaction was unheard of at BCCI where everybody treated them-selves as part of the ‘BCC family’.Standard CharteredThe New York banking regulator accused Standard Char-tered of scheming with Iran to launder as much as $250bn (£161bn). Iran is listed under US sanctions and there are strict controls in place for dealing with them. However, Standard Chartered broke all the rules. According to the New York court document, Standard Chartered “schemed with the government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250bn, and reaping SCB hundreds of millions of dollars in fees. SCB’s actions left the US financial system vulner-able to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investiga-tors of crucial information used to track all manner of criminal activity”. They became experts at ‘wire-stripping’, something that was never done at BCCI. Wire-stripping is when a bank alters bank codes to hide the origin of a trans-action. This is usually done by changing the code that identifies the beneficiary’s bank.


will help Pakistan focus on ensuring better fiscal discipline, boosting its tax and revenue, minimizing harmful monetary ‘accommodations’, strengthening the process of implement-ing structural reforms in the economy, and in managing the process of fiscal decentralisation so that local and provincial governments accept a larger share in providing the essential services and collecting taxes. Some hopes, aren’t they? This softly worded conclusion is very meaningful because it points to a series of failures that went on unaddressed, since the government remained focused on politicking, not on its obligation to address these escalating distortions; that this is the ‘truth’ is amply proved by the increasing public unrest as seen on the streets of almost every town and city, and the dangerous level to which has risen the open defiance of the law that is sapping all the energies of the state. What the IMF has warned Pakistan about, and rightly so, is that going forward, it would “better” analyse the risks to the SBA, and this includes the risks to:• Donor financing • Strong ownership • Securing broad political support for tax/other reforms This is an indirect pointer to the sagging image of Pakistan and how it will impede attracting foreign donors or investment that Pakistan badly needs given its escalating trade and Balance of Payment deficits. Tales about resorting to flawed auctioning practices in case of the G3 telecom licenses and doubts about receiving funds under the Kerry-Lugar Bill or recovering dues from CSF, make things more uncertain.

including a modified GST, and improving income tax collection. This compromise, though not fair, may work but the key issue is expanding the tax net that the FBR is failing in; the fact that according to FBR, only 0.3 percent Pakistanis (compared to 4.3 percent in India) pay taxes, manifests FBR’s prolonged failure. This failure also reflects trade bodies’ respect for the law; they openly defied a FBR directive requiring businesses to display the National Tax Number (NTN) Certificates on their premises–an exercise that aimed to identify businesses that were out of the tax net. What the trade bodies did was to malign the FBR by labelling this directive a blackmailing effort, though the FBR demand was perfectly legal.According to IMF, Pakistan’s implementation of SBA terms was initially good but remained incomplete thereafter pointing to adverse external and domestic shocks, and the mixed results achieved in progress on structural reforms. But the key goal of sustainable fiscal consolidation couldn’t be met. Surprisingly, in the context of this key failure, there was no explicit reference in the IMF review to the resource waste, which has been the hot topic in Pakistani media, and now in the assessment released by Transparency Interna-tional. It is surprising not to find a reference to this big impediment to reducing the fiscal deficit. By ignoring this aspect, and yet by levy of indirect taxes that disregard the concept of the “ability to pay”, and impact the rich and the poor alike, IMF is seriously damaging its public image.IMF Directors believe that continued engagement with IMF would prove beneficial for Pakistan and IMF’s policy advice

Under normal circumstances, Standard Chartered would’ve had its New York license revoked, potentially disastrous to the bank’s existence. However, the punishment is limited to fines: The Federal Reserve said the bank will pay $100m to resolve claims that it provided “inadequate” responses to bank examiners and insufficient oversight of compliance to US sanctions, bank secrecy laws, and anti-money-laundering rules. Separately, the bank will forfeit $227m under deferred prosecution agreements with the US Justice Department and the New York District Attorney. The settlements are on top of the $340m paid to New York’s Department of Financial Services in August.HSBCFinally we head to the holy grail of scandals of recent times. The HSBC fine for money laundering charges this week reached a record $1.92 billion (£1.2bn) as Europe’s biggest bank settled charges in an agreement with the US Justice Department. By accepting its fault and paying for settlement, HSBC avoided criminal charges. The bank agreed to ‘deferred’ prosecution by Manhattan’s District Attorney’s office and the Justice Department. A report by The Times newspaper said a money-laundering indictment or a guilty plea to money-laundering charges, would “essen-tially be a death sentence” for HSBC and cost its license to operate in the United States. The astonishing aspect is that HSBC’s dealings with Mexico were considered to be a “low risk” for money laundering, despite the fact that HSBC’s Mexico operation is said to have transferred some $7 billion from Mexico to the United States, much of it thought to have been money from drug cartels. HSBC also continued to do business with various banks in the Middle East that were said to be funding Al Qaeda groups. Furthermore, one begs to ask the question if HSBC’s $1.9bn (£1.2bn) fine is really worth all the fuss it is creating? Well, it’s a world record for the offence of money laundering and breaking sanctions. However, the sum represents only about four weeks’ earnings given the bank’s pre-tax profits of $21.9bn last year. Therefore, it probably hurts HSBC’s reputation, but not its pockets or bonuses. Therefore, what makes me smile with unease is the way the news of the world-record fine on HSBC gets swept under the carpet sooner than it took me to forget my first girlfriend in boarding school. The bank scandal was headline news last week and by the weekend, we see the news disappear in the newspapers and TV broadcasts. The BCCI scandal on the other hand, took more than two decades to unravel, the accountants and liquidators looting the funds over the years with over 90% of its creditors being reimbursed. Where did all this money come from if the bank was insolvent?The global drug money laundering market at the time when BCCI was shut in 1991 was US$200 billion and BCCI was accused of only US$14 million. A mere $14 million is small fish to fry in front of $200 billion! Now the money launder-ing laws are much more stringent than two decades ago. In the light of the HSBC and Standard Chartered scandals, do you think now money laundering does not exist? Not only does it exist but, the size of the market has increased mani-folds. Despite more strict and stringent laws the fraudulent market is growing.We also need to focus on the enormous philanthropic efforts of BCCI and Agha Hassan Abedi on a global scale

that people worldwide are still benefitting from today. How many people know that the world renowned, best private hospital in the UK – Cromwell Hospital – was established by BCCI? The BCCI foundation, now known as the ‘Infaq foundation’, helps millions of people even today with its funds. BCCI also established top class educational facilities like NUST and FAST in Pakistan. Not forgetting how it changed the lives of 14,000 employees and their families and gave them a dream and ambition to think ‘Big’. The difference between the fates of BCCI and HSBC following accusa-tions of similar ground but the latter being more serious, can be seen by all.Furthermore, it was BCCI that funded and set up the Princes Youth Business Trust (now known as the Prince’s trust) that gave awards under the patronage of Prince Charles to young entrepreneurs who needed start-up loans for their small businesses. These were all funded by BCCI. The Prince of Wales himself was a great affiliate of the Bank.The world needs to wake up and acknowledge the great tragedy and miscarriage of justice that was carried out over 20 years ago. The world opinion on BCCI is of the ‘Bank of Crooks & Criminals International’. That was US Senator John Kerry’s opinion anyway. I must stress though that the level of regard I have for his opinion is the same regard Barack Obama has for my personal choice of porridge oats cereal for breakfast. Therefore the less said the better.The question that needs to be asked is “Why are the UK taxpayers bailing out banks such as RBS, Barclays, Lloyds TSB and HSBC that became insolvent due to their own fraudulent activities?” Whereas BCCI was shut down even though it was financially sound and backed by the UAE Government and didn’t ask for a single penny from the taxpayer!The university textbooks, Google and Wikipedia need to be re-written to know that BCCI is no longer the ’largest financial fraud in history’.- Excerpts from the upcoming book ‘What comes round goes

around – The True Financial Crisis’ by Mubashir Malik. - Mubashir Malik currently works in Public & Media relations

at a Joint Venture of the world’s largest oil producer Saudi Aramco.


”


TRADE & INDUSTRY

Smugglingacross durand line

s the existing political system is expected to sustain in Afghanistan beyond 2014 it is likely that with political stability there may be a huge increase in the demand for capital as well as consumer

goods for sustenance. The rising demand of consumer goods in Afghanistan would result in increasing use of Pakistani trade corridor for the landlocked Afghanistan. Although rising demand for capital and consumer goods would be a positive sign for Afghanistan but for Pakistan increasing use of its land as trade corridor would result in further flooding of her markets with smuggled foreign goods. Because whatever be the scale of demand for goods in Afghanistan, the entire quantities of items imported for or by Afghanistan could not be utilized there and a large part of the goods would be smuggled into Pakistani markets. Having a population of estimated 190 million people Pakistan has been a huge consumer market in the World and far greater than war-shattered Afghanistan with only 35 million people. It may be mentioned that in July 2010 Pakistan and Afghanistan signed a new transit trade agreement called Afghanistan-Pakistan Transit Trade Agreement (APTTA)

replacing the then existing Afghanistan Transit Trade Agreement (ATTA) of 1964. The new trade agreement between Pakistan and Afghanistan was facilitated by the United States, which wanted to give an outlet to exports from Afghanistan through Pakistan as well as to address Kabul’s concern regarding the ATT. On the ATTA both Afghanistan and Pakistan have had serious reservations, though the nature of objections of both countries had been fundamentally different but mutually reinforcing. The main grievance of Afghanistan about ATT had been the restricted list of items allowed to be imported through Pakistan. Goods worth billions of dollars origi-nally meant for Afghanistan were smuggled back into Pakistani markets. The smuggled goods imported under ATTA have been inflicting huge damages on Pakistan’s economy in the form of huge revenue losses of around $5 billion a year. According to estimates the worth of illegal goods pour-ing into Pakistan from Afghanistan is around 5-7 billion dollars while Pakistan has been losing some $1.5 billion to $2 billion by way of evasion of excise and custom duties. This is in addition to the revenue losses due to

A

by Naila Aman Khan

The net inflow of foreign investment into Pakistan further fell by 8.1% during FY11. The main contributing factor behind this decline was a substantial fall of $ 800.6 million in foreign private investment which more than offset an increase of $ 632 million in foreign public investment. The decline in foreign direct investment continued for the third consecutive year. A year on year decline of 26.8% in direct foreign investment was contributed by a decline in both equity capital and reinvested earnings. Equity capital recorded a fall of 22.6% whereas reinvested earnings declined by 83.7% during FY11. While foreign direct investment declined due to lingering issues such as terrorism, energy shortages, corruption etc, portfolio investment registered a relative improvement. The overall position of portfolio investment improved in FY11 as outflows in debt securities remained much lower than in FY10. However, the investment in equity securities declined in FY11. The decline of $ 222 million is a function of weak economic prospects and investors’ bleak view of listed Pakistani companies. Regarding debt securities, payment worth $ 21 million were made in FY 11 compared to $ 652.4 million in FY10 which was made on account of maturing Sukook bonds. This trend continued in FY 12 also. Net inflow of foreign investment declined sharply from $ 2 billion in FY 11 to $ 708 million or 64%. Although the main contribution in this respect was of foreign private investment which declined by $ 1239 million from $ 2.0 billion to $ 761 million or 62% but all other sectors also registered a decline. Portfolio investment declined by $ 424.6 million from $ 364.6 million to minus $ 60 million whereas foreign public investment declined by $ 32 million entirely due to the decline in the portfolio investment. FDI fell sharply by 66.9% to $87.2 million during the first quarter of the current fiscal year, posing a major challenge to the balance of payments outlook. The decline in FDI inflows was, however, more significant as foreign companies invested a $286.7 million during July-September FY13 as compared to $ 580.2 million in the same period last year. However, the FDI outflows, including divestments and repatriation from the foreign investors were recorded at $199.9 million this year as against the outflows of $ 317.2 million last year. During the month of September this year the FDI plunged to $ 53.9 million against $ 163.9 million last year with $113.1 million inflows and $59.2 million outflows. Foreign private investment declined by a modest 15.2% to $ 183.2 million during July-September FY13. During the same period last year the net inflows of foreign investment stood at $286.7 million. The portfolio investment at the local equity market witnessed a sharp increase of 305.2%. The foreign investment in the Karachi Stock Exchange stood at $96.3 million as against the outflow of $46.9 million during the same period last year. Of the total FDI $ 87.2 million, major investment was made in the oil and gas exploration sector followed by construction, information technology and the electrical machinery sectors. The net foreign investment in the power and financial sectors were at $ 0.7 million and $ 4.5 million with inflows of $ 5 million and $ 4.5 million respectively. Telecommunication sector witnessed the major divestment as the total of $ 179.2 million was withdrawn from the sector. However, the situation improved and FDI climbed sharply to $125 million in October 2012 as compared to $59.6 million in the same month last year depicting a significant jump of $71.2 million or 131% and also providing some relief to the deterio-rating balance of payments position.

he inflow of Foreign Direct Investment (FDI) in Pakistan is declining continuously for quite some time. As per the statement of Board of Investment, Pakistan attracted $ 25.66 million net Direct Foreign

Investment in the last ten years. Oil and gas, financial business, trade, construction, power and communication were the main sectors which attracted investment. Pakistan reached a record FDI of $ 5.44 billion in 2008 but experienced steep decline since then. The share of FDI flowing into Pakistan is negligible when compared with opportunities and economic fundamen-tals of the country. The inflow into the country is less than 1% of total FDI made globally.Recently World Bank in its report ‘World Investment and Political Risk’ has revealed that foreign investment in Pakistan has recorded a decline of $ 4.13 billion during the four years of the present government from 2008 to 2011. The report said that there was a continuous trend of decrease in foreign investment in Pakistan and a conspicuous decline was recorded in the tenure of present government. The report further said that $ 5.44 billion foreign investment was made in 2008 whereafter it is continuously falling having reduced to only $ 1.31 billion in 2011. In 2009, the investment went down to $ 2.34 billion which further reduced to $2.02 billion in 2010. The report said that the foreign investment had also declined in India; however, there is an upward trend now. Pakistan’s Finance Minister has also stated that foreign invest-ment in Pakistan has declined over the years due to security issues that the country was facing. He said that ‘we do not want to lose credibility by denying facts. There is a negative percep-tion of Pakistan which we are trying to counter’. He further said that ‘Pakistan had adopted the most liberal and open policies to attract investment.’ The World Investment Report 2012 published by United Nations Conference on Trade and Development (UNCTAD) says that inflows of FDI to South Asia recording an increase of 23% touched the figure of $39 billion in 2011 after a slide in 2009 and 2010. The recovery derived mainly from the inflows of $32 million to India, the dominant FDI recipient in South Asia. Inflows to Iran, the second largest recipient of FDI, amounted to $ 4.2 billion. Pakistan being the third in the list received $ 1.31 billion in 2011. Bangladesh has also emerged as an important recipient with inflows increasing to a record high of $1.1 billion in 2011.It is important to mention here that global economic conditions improved in 2010 compared to 2009. Foreign direct investment to developed, developing and transition economies rebounded sharply in 2010. Despite better global economic conditions, FDI flows to Pakistan declined further in 2010 owing to a number of domestic issues that substantially increased the cost of doing businesses in Pakistan. Sector-specific issues such as saturation in the telecom sector and acute energy shortages also deterred the investment flows. Sector-wise data on the FDI shows that the major fall in investment was registered in the telecommunication and oil and gas exploration sectors, whereas FDI flows to power and financial sectors recorded a modest rise. The decline in telecommunication sector probably reflects saturation in this sector. Moreover, stiff competition, rising advertisement cost, utilities cost and energy cost have squeezed the profits of telecommunication companies. On the other hand, the law and order situation i.e. increased incidents of attacks on gas pipelines and oil fields in Baluchistan and KP is a major hurdle in attracting fresh FDI in the oil and gas exploration sector as this issue is proving to be the major constraint on companies looking to expand their operations.

the damages to local manufacturing sector. The five to seven billion dollars worth of smuggling under the cover of Afghan transit trade annually is a huge amount by any count particularly for the extremely underdeveloped regions of KP, Balochistan and FATA. The unending huge smuggling through ATTA has been the reason behind Islamabad taking both protective measures of limiting the number of items Afghanistan could import through Pakistan and denying India trade corridor through Pakistan for Afghanistan. Pakistan has been fully justified in rejecting Indian and Afghan requests for giving both a trade corridor. Because the war-ravaged Afghanistan with limited writ of central government has never been in a position to check the landing back of ATTA goods into Pakistan. Also keeping in view the unhindered smuggling across the Durand Line allowing Indian goods access to Afghanistan would have been suicidal as Pakistani markets could be flooded with Indian goods and, due to their low manufacturing cost and relatively good quality, could be the choicest consumer items in Pakistan.

The ATTA has been greatly used as a cover by mischie-vous elements especially smugglers to feather their nests by inflicting irreparable loss on national kitty and in particular stifling the economy of KP, Balochistan and the FATA. Presence of smuggled items inside Pakistan, even in the settled areas, suggests that the country’s customs apparatus has failed to prevent the illegal move-ment of goods. Smuggling by land routes is not possible without the connivance and abetting of the officials who are posted on these routes. Although technically illegal, thousands of people at the border are involved in the illegal trade. Moreover, the re-entry of transit trade goods also support other sectors like transporters, work-shop owners, and real estate businesses in KP, Balo-chistan and FATA. The illegal movement of goods across the Pakistan-Afghanistan border has had another ill-effect in the shape of evolution of an undocumented economy in the north- western regions of Pakistan. The economic infra-structure in these regions has largely been non-existent or merely rudimentary, which has had compelled a large and increasing number of people to associate themselves with the illegal goods businesses. It is important to note that keeping in view the easy money available through smuggling across the Pakistan- Afghanistan border, a large number of people from other

parts of Pakistan also joined in the illegal activity. More unfortunate has been the involvement of thousands of Afghan refugees in the illegal trade. Resultantly, slowly and gradually, as mentioned earlier, a huge illegal and unregulated economy came into existence which has not been without its social and cultural consequences on Pakistan specifically in its north-western regions. The foremost socio-cultural consequence of the billions of dollars worth of smuggling across the Durand line has been the plummeting respect for the law of the land leading to constant erosion of the writ of the state which traditionally has always been weak in these regions and whatever state control the British colonial rulers established there through modern institutions of revenue, land record, regulation of businesses and secu-rity have lost their utility. This situation has had a huge negative impact as a large number of people got them-selves involved at will in illegal trade. In order to keep the state institutions at bay most of the individuals and groups involved in smuggling of goods from Afghani-stan to Pakistan established links with criminal gangs. The latter also took advantage of the condition by strengthining and expanding their networks vertically and horizontally in the process criminalizing the society on the one hand and obliterating the state writ on the other hand. The militant and terrorist groups which in the recent decades emerged and thrived in FATA, KP and Balo-chistan have also received handsome amounts from people involved in smuggling across the Durand Line under the cover of Afghan transit trade. The huge administrative vacuum created due to militants and terrorists throwing away and supplanting of the state apparatus and institutions in the areas under their control has suited the interests of the smugglers. Having earned large sums of money through smuggling under the cover of so-called transit trade to Afghanistan a nouveau riche community came into existence. This community in order to institutionalize and consolidate their wealth and status started investing money in other parts of the country especially Karachi, Lahore and rest of the Punjab. There they purchased lands and constructed plazas and shops where most of the goods smuggled from Afghanistan are transported and put on sale. Having the experience of economically entrenching themselves through establishing links either with crimi-nal gangs or illegal tactics the nouveau riche community


The increase in FDI inflows was evident from the fact that foreign companies invested $187.1 million in various sectors of the economy compared to $186.4 million during the corre-sponding month last year. Nevertheless, the FDI outflows including divestments and repatriation from the foreign inves-tors stood at $61.7 million as against the outflows of $126.8 million during October 2011. Oil & gas exploration, trade, electrical machinery, and transport were the main sectors which attracted a significant amount of foreign direct investment in the country during the month. Economic experts say that improvement in FDI inflows is a positive sign for the economy, showing revival in investors’ confidence in Pakistan. However, during the first four months of the current fiscal year FDI plummeted by 24.2% to $244.4 million as against $322.7 million during the same period last year. The portfolio investment at the Karachi Stock Exchange stood at $126.4 million as against the outflow of $74.9 million during the corresponding period last year. During the month of Octo-ber the portfolio investment was recorded at $30.1 million as against the outflow of $28 million last month. UK and Hong Kong are the major contributors in inflow with US$ 72 and $55 million respectively during the four months of the year. Pakistan has a long history of receiving project and non-project loans from International Financial Institutions (IFIs) like the World Bank and Asian Development Bank. However, such inflows have also declined in recent years. The IFIs seem reluc-tant to extend support in the absence of letter of comfort from IMF as Pakistan currently does not have any program with the Fund as IMF generally issues letter of comfort to countries which enter into a program with the Fund.Economic experts say that there is a dire need to attract large inflows of private and foreign investments to revive economic growth in the country. According to a study main causes of this sharp decline are political instability, law and order situation, energy crisis, corruption, lack of required infrastructure, lack of enforce-ment of contracts, comparatively less share of credit to non-government sectors and high corporate tax rates.Political stability is vital for the implementation of long-term consistent policies but due to frequent government changes, inconsistent policies have been a strong threat to foreign investors.

Pakistan’s on-going energy crisis has also been an alarming issue for foreign investors. The demand for energy has far exceeded the supply causing a vicious circle to start. The industries have to either put their production on hold or resort to alternative energy sources. This crisis has impacted the labor market causing hundreds of thousands of people to lose their jobs. Poor infrastructure facilities also contribute in pushing investors further away. Strong social and cultural factors have also been as issue to deal with by the foreign investors who misperceive Pakistan’s image and so are reluc-tant to make investments. Pakistan’s corporate tax rate is 35% of taxable income of a company. For non-residents a 15% tax is levied on the gross amount of royalties or technical service fees, and 30% for other payments under the presumptive tax regime. The tax structure also needs to be reviewed in order to attract foreign investment. According to the report of UNCTAD mentioned above, coun-tries in the region face various challenges which need to be tackled in order to build an attractive investment climate for enhancing development. The challenges facing the region are stabilization in Afghanistan, security concerns in Iran and Pakistan and macroeconomic as well as political issues in India. It points out that at the country level high political risks and obstacles have been an important factor deterring FDI inflows. Countries in the region rank high in the country risk guides of political-risk assessment services and political restrictions on both FDI and business links between countries in the region have long existed. This has deterred FDI inflows and negatively affected the countries FDI performance. However, recent development in the region have highlighted new opportunities in the wake of political relationship between India and Pakistan, the two major economies of the sub-continent, which have now being moving towards greater cooperation, with Pakistan granting India Most Favored Nation (MFN) status in November 2011 and India recently announcing that it will allow FDI from Pakistan. In Afghanistan, some FDI has also started to flow in extractive industries. The report forecast cautiously optimistic prospects saying that ‘whether countries in the South Asia region can overcome old challenges and grasp new opportunities to attract investment will depend to a large extent on governments efforts to further open up their economies and deepen regional economic integration.’

also replicated these illegal and unethical practices in their new abodes in rest of the country particularly Karachi. The Qabza Mafia in Karachi, having many members from upcountry, is a case in point. The smuggling of a huge volume of goods into Paki-stan from Afghanistan imported for the latter via Paki-stan has scuttled real industrial development in the above-mentioned provinces and federal territory while also greatly affecting their corporate structure. The already weak industries in KP and Balochistan could not compete with the cheap smuggled foreign goods that awash the markets in these provinces and the adjoining tribal areas as consumer psychology and choice in Paki-stan is always in favour of foreign-made items. This is one of the main reasons that a major portion of the manufacturing sector of the provinces is sick. The extremely weak industrial infrastructure in these areas hindered the process of socioeconomic development and positive social changes, which are the natural corol-lary of development, there. Now when Pakistan and Afghanistan have agreed on the new trade regime in the form of APTTA business and political circles in Pakistan fear that the new agree-ment would increase the volume of cross border smug-gling of goods. The powerful gangs of the criminals involved in smuggling in collusion with corrupt custom officials would fully exploit the new agreement to their utter advantage. It is a well-known fact that a big part of the Taliban insurgency in Pakistan and Afghanistan is financed with the money obtained through smug-gling. As now under the provisions of APTTA, traders from Afghanistan would be able to carry goods in their own trucks through Pakistani territory from Indian border it is feared that a good part of these exports would never reach their destination and end up in Paki-stan. This would provide further financial space to militants. Thus the new transit trade agreement of Afghanistan and Pakistan may prove counterproductive if measures are not taken to check smuggling. Sadly, the agreement under reference has nothing about this important issue of smuggling which would increase militants sources of finance. Keeping in view the big volume of invisible trade across the porous border of the two countries, there is need to further increase the volume of official trade between Pakistan and Afghanistan for the benefit of the people of these countries at large. Otherwise the unofficial trade or smuggling would continue to enrich a handful of people. However, before proceeding on any such target of increasing the official trade the foremost obstacle, which has to be removed, is to stop the smug-gling of various goods worth billions of dollars into Pakistan from Afghanistan. Another important strategy to check the illegal trade is to relocate and re-employ the huge workforce, presently involved in smuggling, productively in other sectors, which unfortunately are not functional in the KP, FATA and Balochistan. So the panacea is developing the local industry and services sector. This may not only provide alternative job opportunities to those engaged in smug-gling, but would also discourage illegal trade as local inhabitants own stakes would be involved.


ince time immemorial human societies and its mem-bers have been interacting unabatedly. In every epoch, the nature, direction and frequency of this interaction has been different largely depending on

the political organization on the international level. With the establishment of extant modern nation-state system under the Treaty of Westphalia in 1648 international inter-action and consequent interdependence became more organized, regulated by legal procedures and consequently cumbersome. As the state system kept on strengthening and evolving and in the process became more rigid the international interdependence became unidirectional. The state to state interaction during the period between estab-lishment of the nation state system (1648) and the begin-ning of 2nd World War (1939) remained restricted more or less to limited political economic interaction. However, contemporary interstate relationship is multifac-eted and complex with various actors and institutions, mostly non-state. This has given a new shape to our World and the interaction of the people globally. Although the institution of state is still very strong and relevant despite the emer-gence of various non-state international actors but if a state has to take fullest advantage of the situation its strategists ought to have a deep understanding of the changed interna-tional system and its institutions and actors. It is equally true for Pakistani foreign policy framers and strategists.The multidimensional nature of contemporary interna-tional relations has been dubbed as Complex Interdepen-dence. The concept of Complex Interdependence was first brought to the fore by Robert Keohane and Joseph Nye as a neoliberal critique of the realist view or explanation of the world. Complex Interdependence is the idea that states and their fortunes are inextricably tied together. The theo-rists recognized that the various and complex transnational connections and interdependencies between states and societies were increasing, while the use of military force and power balancing are decreasing but remain important. Against the backdrop of Complex Interdependence it is believed that there has been a decline of military force as a tool of policy and the simultaneous increase in economic and other forms of interdependence between and among states leading to the probability of cooperation rather than conflict. This needs to be specifically learned by Pakistani strategists, who have always been for the use of military might as a fundamental tool of policy. In the post World War II era countries interests have become increasingly intertwined. The monumental growth in trans-national corporations has blurred state boundaries putting on the traditional realist assumptions about the centrality of state on the defensive intellectually. The concept of Com-plex Interdependence can be explained, most appropriately, against the backdrop of realist worldview. Realists contend

By Syed Asif Ali

TRADE & INDUSTRY

Goods transporters strike:Sincerity with country or self interest

akistan’s economy is already in shambles, with trade deficit being one of the important factors. The recent goods transporters’ strike further contributed to the country’s problems on

economic front. Prompted by harassment by the bhat-tha mafia, rampant kidnapping of drivers, high handed-ness of the Motor Police and other Highway authorities, the strike incurred losses worth billions of rupees due to stuck up export and import shipments at the Karachi Port and Port Qasim. While halting the export and import activities and damaging the country’s industrial manufacturing capacity, according to some estimtes, the strike resulted in per day loss of around Rs. 4 bilion to the foreign exchange earnings through export of textile products alone. The strike was also detrimental to import business as importers were forced to pay demur-rages for not being able to clear their consignments from the ports. Starting on 5th December 2012 the strike continued for 12 days causing a severe drain on government’s revenue collection. The prime industrial export-oriented sectors which were affected by the strike and faced huge financial losses in terms of non-availability of basic raw material for production and output included textile, leather, marble and surgical goods. The country had suffered export loss of around $800 million due to strike as 25,000 containers loaded with value-added textiles, rice,

cement, leather made-ups and perishable commodities could not meet the shipping schedule. Horticulture, vegetables and fruits were the hardest hit as they need to be delivered on time to meet seasonal requirements in the world market. Similarly, value-added textile goods worth millions of dollars meant to meet consumers’ demands on the occasion of Christmas and New Year festivities werbadly affected in large quantities inside manufacturing facilities or on roadsides in containers as they could not meet shipping schedules.Leaders from various trade & business associations sought immediate government intervention to resolve the issue. The government did respond but quite late in the day; by the time the government woke up major damage to the country’s economy had already been done. Talking to Value Chain, representatives of the goods transporters’ associations narrated the causes and the issues that forced them to take this extreme course of action. Shoaib Khan, General Secretary, Karachi Goods Carrier Association, stated that transporters’ top issue has been the insecurity on major highways and motorways and insulting behavior meted out to them by the motorway police. He alleged that the motorway police officers misbehaved with the drivers and illtreated themand detained their vehicles, for up to 72 ho or more, resulting delay in delivery of consignments. He said that the drivers and the vehicles were released

P


that the state is the dominant actor in World politics and that violence and military force are the fundamental means by which states try to achieve their goals and further their interests. Diametrically opposed Complex Interdependence stresses upon cooperation rather than conflict in international relations and this is what happened since the end of Second World War. The advocates of Complex Interde-pendence recognize that violence and conflict have not vanished altogether from interstate relations; still they think non-security related issues have gained more significance like international monetary relations and global environment concerns. The day-to-day affairs of states have more to do with promoting cooperative economic interaction than with military and security matters. In this context the statement of Pakistan Chief of Army Staff, General Ashfaq Pervez Kiyani, some months back while visiting Siachen, that the yardsticks of security and development of a country is the availabil-ity of basic amenities to the majority of the people than military might, really sounds significant and that of a statesman. The complexity of contem-porary interdependence between and among states can be divided into four separate dimensions: its sources, benefits, costs, and symmetry. As a theory Complex Inter-dependence challenges the core concepts of the previ-ously dominant and still very relevant paradigm of realism. The key beliefs of realism are: States are coherent and dominant actors of World politics; Force is a usable and effective instru-ment of policy; Hierarchy of issues in World politics led by issues of military security or ‘high politics’ which is dominate the ‘low politics’ of economic and social affairs. These realist assumptions define an arena of World politics which is characterized by continual conflicts among states and the conditions so volatile that use of force is possible at any time. Each state attempts to defend its territory and interest from real or perceived threats. Political engagements and alliances between states are interest-driven and last as long as they are mutually beneficial. Moreover, transnational actors do not exist or an extremely unimportant. Only the adroit use or threat of force enables states to survive. Whereas, the world system could be held in a balance if the states-men succeed in adjusting their interests. Each of the realist assumptions can be challenged. Simultaneous challenging these one could prove that in the international arena actors other than the states also take part and no clear hierarchy of issues exists. More-over, in such conditions with multiple actors and no clear

issue hierarchy, force is not at all an effective instrument of state policy. All these characteristics come under the purview of the concept of Complex Interdependence. The salient features of the Complex Interdependence of today’s World affairs include firstly multiple channels. These channels can be summarized as interstate, trans-governmental and transnational relations. Secondly, the presence of multiple issues between and among states is another feature of the concept. The agenda of interstate relations, unlike realist military-security focus of inter-national interaction, consists of multiple issues. How-ever, these multiple issues are not arranged in a hierarchy in a clear and consistent manner as is in the case of realist assumptions. These issues are dealt with by a number of government agencies and departments and are not entirely subject to the business of foreign offices. Thirdly, another characteristic of Complex Interdepen-dence is that the military force is not used by govern-

ments toward other govern-ments within the region, or on the issues, when condi-tions of Complex Interde-pendence prevail. However, military force may be impor-tant in these governments’ relations with governments outside the region. Under Complex Interdepen-dence there are a variety of state goals—not merely the physical survival of the state—that must be pursued. Although there is an absence of clear hierarchy of issues, goals will vary by issue and may not be closely related. Every bureaucracy will have to pursue its specific institu-tional goals although several agencies may reach agree-ment on issues that affect all national goals.

As there are multiple channels of contact among societ-ies, this further blurs the distinction between domestic and international politics. Interestingly, under Complex Interdependence the making of political alliances, once believed to be limited to domestic politics, are no longer confined to within the state; political coalitions could be formed even on international level. In particu-lar, international environmental NGOs have challenged the theory of state sovereignty by linking to local resis-tance movements. They have eroded both the territorial and national borders through these transnational alliances. Their work with local level resistance move-ments has allowed these international actors to inter-vene into the domestic affairs of states. This interven-tion results in the internationalization of the local movements.The more conditions of Complex Interdependence prevail the more one can anticipate the outcome of political bargaining to be influenced by transnational relations. For instance, MNCs could be significant as their

only when the palms of the motorway officials were greased. According to him, the security on the highways was almost non-existant with dac left free to kidnap drivers along with the truck and loot the containers.”Sometimes they open fire at our drivers when they drive fast to escape from the bandit,” he said , he said, have been Karachi to Quetta and Interior Sindh and Punjab highways. He said the vehicles are looted at the Northern Bypass, Hyderabad and several places in rural Sindh. In Punjab, Lodhran, Khanewal and Dunyapur, have been hotspots for robberies.He further complained that National Highway Author-ity inspectors stop their vehicles and measure their loaded containers on too many check posts without any reason. He criticized the weighing system of National Highways and Motorway Police and suggested that the authorities should inspect and check the weight of their vehicles before they leave Karachi. After leaving Kara-chi, it is impossible for truck drivers to remove the extra load from the container/vehicle as they are not autho-rized to open the containers. Inspectors insist on removing the extra load and on refusal they detain “our vehicles , at times for more than 72 hours. It is unfair to ask the drivers to dump the extra load when they have travelled half the way.To a question as to why the carriers overload their containers beyond the prescribed limit, he said that we have no other option as there is no transportation substitute available such as railway carriage. He further explained that prescribed weight limit depends on the number of axles of a vehicle. Transport vehicles are allowed to carry lesser load than an oil tanker with the same number of axles. He said that in all fairness, the authorities should set a uniform load limit for both goods trucks and oil tankers.Scribing goods transporters’ another wish, he demanded that government should allocate them 500 acres of land at Northern bypass as promised. He further demanded that government must open the Mai Kolachi route for heavy trucks as it costs transporters extra fuel charges when they use the alternate route. He said that it is only unfair that the oil tankers allowed to use Mai Kolachi route while the goods carriers are denied the facility. The goods transporters counted 5 demands which are as follows:i- Insecurity and escalating crime rate on the highwaysii- Harsh and insulting behavior of motorway policeiii- Weight policy of NHMPiv-Non- fulfilment of the promise to allocate 500 acres of land at Northern Bypass.v- Re-opening of Mai Kolachi route for goods carriers. By the time the government realised the gravity of the situation it was already too late. However, on the inter-vention of the Prime Minister Raja Pervez Ashraf‚ transporters’ alliance called off the strike on the assur-ance that their demands would be given due consider-ation and met wherever possible. The Prime Minister constituted a two -member decisive committee consist-ing of Babar khan Ghouri, Federal Minister for Ports and Shipping and Abbas Khan Afridi, Minister of State for Commerce to negotiate with the transporters.

Federal ministers assured transporters that their right demands would be fulfilled in the shortest period of time,-- three months in this case. Consequent to the negotiations, transporters have now been allowed to use Mai Kolachi Bypass for longer duration of time instead of previously allowed time from 11pm to 6am. The new schedule of passing through the bypass would also be applicable to the vehicles of National Logistics Cell (NLC) and oil tank-ers, and, if these vehicles violate the schedule then the goods transporters would also be allowed to do so. Government also assured transporters that their vehicles would not be stopped at toll plazas for weigh-ing goods. The decision not to stop the vehicles at toll plazas for weighing is for three months. In the mean-timea new bill would be placed before the National Assembly regarding new rates for goods’ weight. Besides, the increase in toll plazas’ rates would also be withdrawn. Sadly, however, implementation of the assurances given is still missing. Shoaib Khan told this scribe that there is no implementation at all on the insecurity on highways issue which is transporters’ prime concern.” Just the next of our ccalling off the strike, dacoits robbed my own vehicle,” Shoaib Khan said adding that “the government is expert in giving assurances only, not implementation.’Are goods transporters justified in their demands? The answer is, “to some extent, yes.” While talking with ‘Value Chain’, Muhammad Javed Chaudhry, Public Rela-tions Officer (PRO), National Highway & Motorways Police, admitted that crime ratio has escalated on some national routes. He said that most of the incidents took place on the link roads connecting to the major high-ways. Javed claimed that motorway police is taking every possible step to curb the crimes in highways. Working in close coordination with local area police they have recoveredsome of the stolen goods and containers from robbers. However, Shoaib Khan, refused to accept and endorse Javed’s statement and insisted that most of the robberies and kidnappings happen on highways rather than link roads. On the other hand, PRO Javed Chaudhry denies Shoaib’s claim that motorway police officials treat drivers harshly



role as independent entities and as tools manipulated by governments. The attitudes and policy stances of domestic groups are likely to be affected by communica-tions, organized or not, between these groups and their partners abroad. Here the example of terrorist groups is quite relevant. One can also see these challenges to sovereignty by look-ing at the effects of NGOs on the territorial and national borders of the state. These demarcations are essential to the concept of state sovereignty. NGOs as wells as MNCs are entangled in many transnational relations which cut across national boundaries. Technol-ogy has allowed for the effortless electronic transfer of information and capital across territorial boundaries. In 1992, international NGOs distributed $8.3 billion to developing countries. The flow of such resources across territorial borders undermines state supremacy over internal activities. State loyalties and identity are also diminished as a result of NGOs. National boundaries are necessary for the theory of state sovereignty and are eroded by NGO activity. This blurring of national interest by pursuance of a narrow interest of a government agency creates serious problems for the top political leaders of government. The reason is that under Complex Interdependence centralized control becomes difficult because bureau-cracies contact each other across national boundaries without bringing in the formal procedures and require-ments of foreign offices. Resultantly there is less certainty that all the components of a state will act and think in unison while dealing with other governments or all the components will interpret national interests similarly

when negotiating with foreigners. The negative fallout of this condition is that the state may turn out to be multifaceted and even schizophrenic. Moreover, there is a compartmentalization of national interests as on each issue there will be a different definition of national interest and it may be different at different time and defined differently by various governmental agencies. Pakistan is a typical example of this situation where different institutions have different interest presented as national interest. International relations have experienced significant transformation in the post World War period and espe-cially after the Cold War era, these relationships have attained a new direction. Indubitably, the interstate relationships have really changed into international relations with individuals, groups, organizations and governmental bureaucracies interacting with their counterparts in other countries directly and with decreasing governmental control of their respective states to channelize these interactions. Today’s interna-tional relations are really complex in the context of their outcomes for individuals, societies and govern-ments. The complexity of international interactions although has brought huge benefits to all and sundry but simultaneously has also given birth to novel prob-lems for people and governments. These problems are at times hard to negotiate having large-scale implica-tions. The foremost and biggest impact of the evolu-tion of the complex networks of international interac-tions is that it has eroded the state and its institutions and this does not augur well for the stability of interna-tional order.

and are involved in bribery. He termed these allegations baseless. He questioned the desirability of overloading by the goods transporters and said that overloading is one of the most common reasons of brake failures and fatal accidents on highways. According to him, 17.5 tons of load is approved for single axle truck but transport-ers are demanding that this limit should be increased to 32 tons which is not practicable. Similarly weight limit of trawlers is 60 tons, but when motorways police weighs them, they turn out to be somewhere above 100 tons. It is the duty of the motorway police to enforce the law and when we do it, they call us harsh. Based on the lack of implementation of the decisions and trust deficit between the transporters and the motorway authorities, it seems that the issue stands settled temporarily and may resurface at some point of

time later. If that happens it would be suicidal for the country’s economy. Transport is the lifeline of the country’s economy. Patriotism demands that the trans-porters and the motorway authorities must realise this and ensure that the process does not come to stand still at any point of time. While the transporters shoould abide by the law of the land, the authorities concerned should come forward and facilitate the transporters as far as possible within the limits of the law of the land. Confrontation is not the solution, mutual understanding is.In a democratic regime, it is right of everybody to protest against injustice but protest must be peaceful. There is obvious difference between protest and black-mailing. On the other hand, government needs to make a uniform weight policy. Better patrolling and security systems can ensure protection on highways.

Pakistan Bedwear Exporters Association (PBEA)

Pakistan Hosiery Manufacturers and Exporters Associa-

tion (PHMA)

Sindh Agriculture Forum (SAF)

All Pakistan Vanaspati Manufacturers Association (APVMA)

Pakistan Yarn Merchants Association (PYMA)

All Pakistan Cement Manufacturers Association (APCMA)

Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA)

Rice Exporters Association of Pakistan (REAP)

Auto Parts Manufacturer and Exporters Association (APMEA)

All Pakistan Fruit and Vegetable Exporters (APFVE)

"The strike has paralyzed economic activities across the country, halting exports and imports besides bringing industrial manufacturing to a standstill”. – Zain Bashir, Chairman.“Approximately 10,000 exports-bound containers were held up because of the strike. Exporters have failed to get their export-bound consign-ments loaded on ships since the strike started”. – Javed Bilwani, Chairman.“As urea producing companies were unable to transport their DAP and urea for the farmers across the Pakistan, which had created the shortage of DAP in upper parts of the country. This situation resulted in a huge loss to the agriculture sector and wheat-sowing target of government might also be affected.” “Due to transporters wheel jam strike, the manufacturing units in the country faced shortage of around 2,000 tonnes of edible oil daily, which was transported from Karachi.” – Press statement. “The strike has completely halted the export and import activities besides damaging the industrial manufacturing capacity.” Ghulam Rabbani, Senior Member.“The supplies of coal and various raw materials are not being transported to any cement producer, which may hurt the productions and subsequently the supplies of cement to retail market”.“The strike called by goods transporters incurring losses running in billions of rupees due to stuck up export and import shipments at the Karachi Port and Port Qasim.” – Sheikh Muhammad Rafique, Chair-man.“The situation of exports turned from bad to worse as 800 to 1000 trucks/containers being shifted to the port daily were halted for the last seven days. Our scheduled ships at ports left for their destinations without the consignments.” – Javed Ghori, Chairman.“The goods transport carriers strike not only hit shipments of export consignments but also disturbed import business as importers were forced to pay demurrages for not being able to clear their consignments from the ports.” – Malik Tahir Javed, Chairman.Fresh fruits and vegetables worth $20 million could not be exported during the strike days. – Press Statement.

Associations’ Statements


hen I was growing up, being the only son and having an elder sister, I would almost always get the stick for being…. well, just being myself really. The fact that my sister could get away

with murder, if she wanted to, really consumed me away from inside, even more so for the fact that my parents always thought that she could ‘do no wrong’. On one occasion I turned the sprinklers on in the garden, and ran through the water a few times until I was drenched. The following hours saw the wrath of my mother and the outpour of anger and concern as she dried me off preventing me from falling sick.My sister on the other hand did exactly the same thing with my cousin the following week, and didn’t get reprimanded. I was at an intellectual loss to understand how there could be one rule for her and another for me. It was beyond me. But then again it was petty sibling rivalry and animosity. One would never expect this type of differential treatment to be a benchmark practice in the modern world’s Capitalist Economies. Of course not, there is one rule for them and another for us. Nonsense! Is it, or isn’t it?Those young financial aficionados amongst you, who have yet to inherit the perfidious grey hairs on your heads, will probably not remember a man by the name of Agha Hassan Abedi – a Pakistani financier, who founded the Bank

of Credit & Commerce International (BCCI) along with United Bank Limited (one of the largest institu-tions in Pakistan today).Abedi befriended the world’s elite, namely the rising oil tycoons of the Middle East, and with their invest-ment capital he created BCCI in 1972, incorporated in Luxembourg, with Head offices in Abu Dhabi. However, barely two decades after its inception, it was accused of various fraud & bankruptcy allegations, eventually being forcefully shut down by the Bank of England and authorities in 1991.Within 10 years of its birth, the growth of this Arab-owned, Pakistani managed bank was phenomenal. It became the fastest growing bank, with a network of 400 branches in over 72 countries. At its peak in the late 80’s, BCCI became the 7th largest privately-owned bank in the world in terms of assets alone. This was an enormous feat by any standards, especially by a bank that was originally set up as an institution to help bridge the gap between the Third world and the West.

by Ferozeali Hussaini

EDUCATION & TRAINING

he role of HR in the present scenario has under-gone a sea change and its focus is on evolving such functional strategies which enable successful implementation of the major corporate strategies.

In a way, HR and corporate strategies function in align-ment. Today, HR works towards facilitating and improving the performance of the employees by building a conducive work environment and providing maximum opportunities to the employees for participating in organizational planning and decision making process. Today, all the major activities of HR are driven towards development of high performance leaders and fostering employee motivation. So, it can be interpreted that the role of HR has evolved from merely an appraiser to a facilitator and an enabler.The concept of performance management gained its popu-larity in early 1980’s when total quality management programs received utmost importance for achievement of superior standards and quality performance. Tools such as job design, leadership development, training and reward system received an equal impetus along with the traditional performance appraisal process in the new comprehensive and a much wider framework. Performance management is an ongoing communication process which is carried between the supervisors and the employees throughout the year. The process is very much cyclical and continuous in nature. Performance management is the current buzzword and is the need in the ongoing of cut-throat competition among individuals and organizations for leadership. It is a much broader and a complicated function of HR, as it encom-passes activities such as joint goal setting, continuous prog-ress review and frequent communication, feedback and coaching for improved performance, implementation of employee development programmes and rewarding achievements. The process of performance management starts

with the joining of a new incumbent in a system and ends when an employee quits the organization. Performance management can be regarded as a systematic process by which the overall performance of an organization can be improved by improving the performance of individuals within a team framework. It is a means for promoting supe-rior performance by communicating expectations, defining roles within a required competence framework and estab-lishing achievable benchmarks.A performance management system includes:• Developing clear job descriptions and employee perfor-

mance plans which includes the key result areas (KRA') and performance indicators.

• Selection of right set of people by implementing an appropriate selection process.

• Negotiating requirements and performance standards for measuring the outcome and overall productivity against the predefined benchmarks.

• Providing continuous coaching and feedback during the period of delivery of performance.

• Identifying the training and development needs by measuring the outcomes achieved against the set standards and implementing effective development programs for improvement.

• Holding quarterly performance development discussions and evaluating employee performance on the basis of performance plans.

• Designing effective compensation and reward systems for recognizing those employees who excel in their jobs by achieving the set standards in accordance with the perfor-mance plans or exceed the performance benchmarks.

• Providing promotional/career development support and guidance to the employees.

T

Performance Management


Naturally, the prying eyes of the world were on BCCI. Undeniably, there were factions of the Western banking elite, traditionally controlled by the Wall Street or regulators like the Bank of England that saw BCCI through the doctrine of suspicion. The bank’s new plush London head-quarters at 100 Leadenhall Street, in the heart of the City’s financial district, became notorious amongst the traditional high street banks as they wanted to get a piece of the success cake. To be brutally honest, I’m not at all surprised. BCCI became a victim of its own success. A former BCCI executive is quoted as saying “While other banks were sleeping and crawling, BCCI was awake and sprinting”.Here was a bank that came literally from nowhere, had installed conspicuous branches dotted around the most sought after prime locations in central London, attracting high net worth individuals as depositors, and was growing at a rate faster than it takes Dominic Strauss Kahn to unzip his trousers.It is said that if you walked into any BCCI branch, it would feel and look as though you have walked into the lobby of a luxurious yet classy 5-star hotel. The only ATM machines outside world famous Harrods store in Knightsbridge were those of BCCI. They had almost 4 branches alone on the small stretch of road that is called ‘Park Lane’, in London’s exclusive Mayfair district.Abedi had transformed the meaning of consumer and personal banking in the real practical sense. Normally in high street banks, customers were used to tedious long queues, derelict shop fronts, dull interiors and gloomy carpets and lighting. In BCCI, a normal walk-in customer was treated to leather sofas, marble décor, impeccably dressed personal bankers greeting you at the door and helping you in the queue in advance to save time (a service only recently adopted by the high street banks), hot/cold drinks for free served by dedicated catering staff. In addition there were always a string of chauffeur driven Mercedes limousines parked outside main BCCI branches to transport key clients & executives. This was whole new personal banking revolu-tion, and Agha Hassan Abedi was its pioneer.So what went wrong, and how did it all go pear-shaped for this promising ambitious Third World bank that thousands of people entrusted with their hard earned money? Well, for the Full Monty, you will have to read my book due for release next summer. However, for the eager, zealous and impatient readers I shall give you the quintessence in a nutshell.Agha Hassan Abedi knew that his bank was the next big thing and on target to possibly being the largest bank in the world. He was forging relationships with political heavy-weights and rubbing shoulders with the likes of former US president Jimmy Carter and the Pope. The more notorious clientele included Saddam Hussein, Manuel Noriega, Bin Laden family and more notably the CIA.Abedi’s enemies and competitors also knew this. However, in order to really get to where he wanted to be and fulfill his vision, he needed a presence in the USA. The banking federal laws within the USA are such that it was very difficult for BCCI to make a considerable impact as a foreign bank. Even in the UK, BCCI was never given full banking status, but only as a ‘licensed deposit taker’. Therefore, to create a foothold in America, BCCI became a majority shareholder and took control of First American bank (one of America’s largest banking networks) through some influential front men and investors. On paper the deal was legitimate and signed

by wealthy Saudi and American investors, however the federal authorities, who were already suspicious and looking for dirt on BCCI, soon realized that the bank was pulling all the strings at First American. Even though BCCI was accused of other activities like money laundering, accounts manipulation, and insolvency the main catalyst and the cherry on the cake was the acquisition of an American bank which eventually sparked BCCI’s debacle and downfall. It was unthinkable for the Americans to digest that a once unknown bank from the Middle East was replacing and overtaking the banking world, leaving the likes of Citibank, JP Morgan Chase and others behind.The guillotine came down on BCCI in July 1991. The bank’s assets were frozen and the thousands of depositors of BCCI were in frenzy, since they feared losing their life’s savings amidst reports of the bank’s poor liquidity and insolvency. The Bank of England accused BCCI of being bankrupt and an apparent ‘hole’ uncovered with apparent losses of up to £1billion. The majority shareholder of the BCCI at the time Sheikh Zayed bin Nahayan Al Nahyan, ruler of Abu Dhabi, warned the authorities not to close the bank and that he will personally guarantee the reported ‘losses’ of the bank and implement a cash injection of £1billion. He went on further to the extent that he will order a shake up and entire re-structuring of the bank worldwide with new staff and management. The Bank of England had already started a similar re-structuring of the bank prior to its closure, but still decided to close it down instead. The conclusion being that when the head of the UAE Royal family (majority shareholder) gives you a guarantee of funds, accepts responsibility, co-operates with restructuring the bank and re-assures the world of the financial stability of the bank with his personal backing – and then the bank STILL ends up being forced shut by the Western authorities, then we really have to question whether something else was at play here.Now the first thing coming to all of your minds is that this was a typical tale of East blaming the West, blaming the misdoings of a few corrupt Pakistani bankers on Western jealousy, conspiracy theories galore, and racism. However we only need to read the front headline of the newspapers of the past week to figure that one out. It doesn’t take Einstein to see the double standards and hypocrisy in the aftermath of the world economic meltdown that started in 2008 with the Lehman Brothers failure. Now let’s grab a hot cup of Horlicks, some MnM’s or some ‘lassi’ if you are

• Performing exit interviews for understanding the cause of employee discontentment and thereafter exit from an organization.

Why Appraise Performance? The goal of the review process is to recognize achievement, to evaluate job progress, and then to design training for further devel-opment of skills and strengths. Periodic reviews help supervisors gain a better understanding of each employee's abilities. A careful review will stimulate employee’s interest and improve job performance. The review provides the employee, the supervisor, and Human Resources a critical, formal feedback mechanism on an annual basis.Annually, the concerned supervisor evaluates each employee’s performance. In the case where an employee has changed jobs part-way through the appraisal period, both of the employee’s supervisors during the appraisal period should submit an appraisal of the employee’s performance. During the performance evaluation process, the most recent job description on file with Human Resources will be reviewed and updated, if necessary, by both the employee and the supervisor.Employees are reviewed for a salary increase, annually. The amount of the salary increase pool of funds is recom-mended by the administration and approved by the Senior Management. The method for allocating funds is based on rewarding meritorious performance. Merit increases will be awarded on a pay-for-performance basis. A pay-for- perfor-mance structure achieves the goal of rewarding truly top performers with merit increases that match their achieve-ments and contributions. Performance Appraisal Process: A performance appraisal is a review and discussion of an employee's performance of assigned duties and responsibilities. The appraisal is based on results obtained by the employee in his/her job, not on the employee's personality character-istics. The appraisal measures skills and accomplish-ments with reasonable accuracy and uniformity. It provides a way to help identify areas for performance enhancement and to help promote professional growth. It should not, however, be considered the supervisor's only communication tool. Open lines of communication throughout the year help to make effective working relationships. Each employee is entitled to a thoughtful and careful appraisal. The success of the process depends on the supervisor's willingness to complete a constructive and objective appraisal and on the employee's willingness to respond to constructive suggestions and to work with the supervisor to reach future goals. Performance management is the systematic process by which an agency involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of agency mission and goals. Employee performance management includes:• Planning work and setting expectations,• Monitoring performance continually,• Developing the capacity to perform, • Rating performance periodically and • Rewarding good performance

Planning: The standardized requirements for planning employees' performance include establishing the elements and set of principles of performance appraisal plans. Performance elements and standards should be measur-able, understandable, verifiable, equitable, and achievable. Through critical elements, employees are held accountable as individuals for work assignments or responsibilities. Employee performance plans should be flexible so that they can be adjusted for changing program objectives and work requirements. When used effectively, these plans can be beneficial working documents that are discussed often, and not merely paperwork that is filed in a drawer and seen only when ratings of record are required.Monitoring: In an effective organization, assignments and projects are monitored continually. Monitoring well means consistently measuring performance and providing ongo-ing feedback to employees and work groups on their prog-ress toward reaching their goals. The requirements for monitoring performance include conducting progress reviews with employees where their performance is compared against their elements and standards. Ongoing monitoring provides the opportunity to check how well employees are meeting predetermined standards and to make changes to unrealistic or problematic standards. And by monitoring continually, unacceptable performance can be identified at any time during the appraisal period and assistance provided to address such performance rather than wait until the end of the period when summary rating levels are assigned.Developing: In an effective organization, employee develop-mental needs are evaluated and addressed. Developing in this instance means increasing the capacity to perform through training, giving assignments that introduce new skills or higher levels of responsibility, improving work processes, or other methods. Providing employees with training and developmental opportunities encourages good performance, strengthens job-related skills and competen-cies, and helps employees keep up with changes in the workplace, such as the introduction of new technology.Carrying out the processes of performance management provides an excellent opportunity to identify developmen-tal needs. During planning and monitoring of work, deficiencies in performance become evident and can be addressed. Areas for improving good performance also stand out, and action can be taken to help successful employees improve even further.Rating: Organizations need to know who their best perform-ers are. Within the context of formal performance appraisal

Planning

Rewarding

Rating

Developing

Monitoring



inclined to fall asleep afterwards, and go through this list of financial institutions with scandals:Barclays Bank PLCBarclays Bank was recently fined £290 million because of its involvement in the Libor scandal. What does that mean? I hear you all cry.It’s the London interbank offer rate, an interest-rate bench-mark for many other rates, from commercial loans to mort-gages. Libor is also an important index for derivatives, which are complex agreements whose value derives from a benchmark.Libor is the most widely used interest rate in the world. Estimates of how much is tied to Libor vary from $350 trillion to $800 trillion. To give you a rough estimate, $350 trillion would pay for all US government spending for the next century. Some banks, including Barclays, artificially inflated or deflated their rates, depending on what would benefit Barclays’ the most. Some may have deflated their rates to give the impression that they were more creditwor-thy than they actually were.During the financial crisis of 2008, the rate was more of an estimate, since banks weren’t lending to anyone. Between January 2005 and June 2009, Barclays’ derivatives traders made a total of 257 requests to fix Libor and Euribor rates, according to a report by the FSA.In June 2012, Barclays admitted to misconduct and the UK’s FSA imposed a £59.5m penalty. The US Department of Justice and the Commodity Futures Trading Commis-sion (CFTC) imposed fines worth £102m and £128m respectively, forcing Barclays to pay a total of around £290m. Two days later, chief executive Bob Diamond said he would attend a Commons Treasury Select Committee, and that the bank would co-operate with authorities. How-ever, he insisted he would not resign. The same day, Bank of England governor Sir Mervyn King called for a cultural change, but ruled out a Leveson-style inquiry into the banks. Sounds very flaky to me! Had this been BCCI, it would’ve been a different story. Still reading? Good.JP Morgan & ChaseJP Morgan has had to pay fines on 3 occasions in four years to settle regulatory allegations that it mishandled customer accounts. In 2009, JPMorgan’s futures broker paid $300,000 to settle CFTC allegations that it co-mingled accounts and created a $750m shortfall in customer funds. The shortfall was cleared up the next day, but the CFTC faulted the bank for its delay in notifying the regulator. The FSA fined JP Morgan Securities £33.32m ($48.2m) in 2010

for failing to protect its clients’ money by lumping it in with its own over a period of almost seven years.Under the FSA’s rules, firms are required to keep customers’ funds in separate accounts to protect it in case the financial firm becomes insolvent. More recently, the CFTC alleged that the bank mishandled Lehman Brothers’ customer funds for almost two years before the broker filed for bankruptcy court protection in September 2008. The bank allegedly counted customer money when calculating how much credit it would extend to Lehman. So again the bank settled with the CFTC for $20million with regard to Lehman. The commis-sion also alleged JPMorgan did not return the customer funds until it was ordered to do so almost two weeks after the bankruptcy. Last but not least one of JP Morgan Cazenove’s most senior bankers Ian Hannam resigned after the FSA announced it was fining him £450,000 for market abuse. Shocked? Continue reading.Goldman SachsEndless scandals! Just to name a few: 1) $60 million settlement for Massachusetts subprime mort-

gages. 2) Involvement in European sovereign debt crisis. Goldman

Sachs is reported to have systematically helped the Greek government mask the true facts concerning its national debt between the years 1998 and 2009.

3) Involvement in AIG bailout scandal plus many more. 4) Insider trading.Morgan Stanley1) Paid $125 million in order to settle its portion of a $1.4

billion settlement relating to intentionally misleading research motivated by a desire to win investment banking business with the companies covered.

2) Morgan Stanley settled a sex discrimination suit brought by the Equal Employment Opportunity Commission for $54 million on July 12, 2004. In 2007, the firm agreed to pay $46 million to settle a class action lawsuit brought by eight female brokers.

3) The New York Stock Exchange imposed a $19 million fine on January 12, 2005 for alleged regulatory and supervi-sory lapses.

Sexual discrimination cases and employee dissatisfaction was unheard of at BCCI where everybody treated them-selves as part of the ‘BCC family’.Standard CharteredThe New York banking regulator accused Standard Char-tered of scheming with Iran to launder as much as $250bn (£161bn). Iran is listed under US sanctions and there are strict controls in place for dealing with them. However, Standard Chartered broke all the rules. According to the New York court document, Standard Chartered “schemed with the government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250bn, and reaping SCB hundreds of millions of dollars in fees. SCB’s actions left the US financial system vulner-able to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investiga-tors of crucial information used to track all manner of criminal activity”. They became experts at ‘wire-stripping’, something that was never done at BCCI. Wire-stripping is when a bank alters bank codes to hide the origin of a trans-action. This is usually done by changing the code that identifies the beneficiary’s bank.

requirements, rating means evaluating employee or group performance against the elements and standards in an employee's performance plan and assigning a summary rating of record. The rating of record is assigned according to proce-dures included in the organization's appraisal program. It is based on work performed during an entire appraisal period. The rating of record has a bearing on various other personnel actions, such as granting within-grade pay increases and deter-mining additional retention service credit in a reduction in force. A descriptive list of Rating Factors may be referred as detailed in the foot-notes.Rewarding: Rewarding means recognizing employees, individu-ally and as members of groups, for their performance and acknowledging their contributions to the agency's mission. A basic principle of effective management is that all behavior is controlled by its consequences. Those consequences can and should be both formal and informal and both positive and negative. Good performance is recognized without waiting for nominations for formal awards to be solicited. Recognition is an ongoing, natural part of day-to-day experience. Nonethe-less, awards system provide a broad range of forms that more formal rewards can take, such as cash, time off, and many nonmonetary items that can be rewarded, from suggestions to group accomplishments.Managing Performance Effectively: In effective organizations, managers and employees have been practicing good perfor-mance management naturally all their lives, executing each key component process well. Goals are set and work is planned routinely. Progress toward those goals is measured and employ-ees get feedback. High standards are set, but care is also taken to develop the skills needed to reach them. Formal and infor-mal rewards are used to recognize the behavior and results that accomplish the mission. All five component processes working together and supporting each other achieve natural, effective performance management.Some Tips On How To Succeed In Your Next Performance: Annual performance reviews come just once a year, yet many employ-ees find themselves unprepared and quite anxious as they are called into their manager's office for their dreaded conversation about performance and compensation. A performance review doesn't have to send you into a stretch of anxiety. There are plenty of ways to ensure success in your next performance review. Here is a look at five ways you can ensure success in your next performance review. Perform a Self-Evaluation: Many companies require their employ-ees to complete a self-evaluation prior to receiving their annual performance review. A self-evaluation requires employees to identify their strengths and weaknesses in their current position. Self-evaluations often ask an employee to rate him- or herself on a scale and then provide additional details about his or her performance on the job. A self-evaluation is an excellent opportunity for employees to elaborate on any skills their employers may not know about, sum up the achieve-ments and struggles experienced throughout the year, and set realistic goals for next year. Don't be Defensive: Many people walk into an annual perfor-mance review with a defensive attitude. Rather than immediately preparing themselves, maintain a calm bearing, and be prepared to communicate openly with your manager. If you performed your job to the best of your ability, maintained a good rapport with your employer, you should walk into your performance review with confidence and a sense of irreplaceability. If your

manager has something negative or constructive to say, take it in stride, and take a mental note so that you know how to improve your performance in the future.Walk in with a Positive Attitude: Having a positive attitude can make a big difference when walking into a performance review. Ultimately, performance reviews identify areas where you can improve while targeting possible career advancement opportu-nities. Even if you receive constructive criticism, maintain a positive attitude. Constructive criticism identifies exactly what you need to do to succeed in your job. No one is perfect, and your performance review will identify how you can improve your job performance. Get Well-Prepared: Prior to attending your performance review, prepare yourself with some vital information such as your job description and responsibilities, any mid-year reviews and goals, a list of all of your accomplishments for the calendar year, and any other information that could be a speaking point during your conversation with your manager. By preparing yourself, you will be ready to answer any questions that management may have, and if anything in your review sounds incorrect, you will be ready to discuss it with your manager. Try Not to Focus on the Financial Aspect: Most people acknowl-edge that a vital aspect of a performance evaluation is learning whether or not an employee will receive a raise. While many employees would love to get right down to the financial details, most managers will want to review your performance first before discussing what your financial compensation will be. Rather than simply zeroing in on the compensation piece of your performance review, listen carefully to what your manager is saying, answer any questions that he or she may have, and handle the financial details at the end of your meeting.The Bottom Line: A performance review does not need to be a stress-inducing event; it is designed to identify strengths and weaknesses so that a realistic career goal can be set for the next year. Going into a performance review with a positive attitude and high level of confidence allows your meeting to flow smoothly, and you can learn how you can develop your skills and improve your strengths.A performance management process sets the platform for rewarding excellence by aligning individual employee accomplish-ments with the organization’s mission and objectives and making the employee and the organization understand the importance of a specific job in realizing outcomes. By establishing clear perfor-mance expectations which includes results, actions and behaviors, it helps the employees in understanding what exactly is expected out of their jobs and setting of standards help in eliminating those jobs which are of no use any longer. Through regular feedback and coaching, it provides an advantage of diagnosing the problems at an early stage and taking corrective actions.To conclude, performance management can be regarded as a proactive system of managing employee performance for driving the individuals and the organizations towards desired performance and results. It’s about striking a harmonious alignment between individual and organizational objectives for accomplishment of excellence in performance.If the true goal of the performance appraisal is employee development and organizational improvement, consider moving to a performance management system. Place the focus on what you really want to create in your organization - perfor-mance management and development. As part of that system, you will want to use a checklist to guide your participation in the performance management and development process. This


Under normal circumstances, Standard Chartered would’ve had its New York license revoked, potentially disastrous to the bank’s existence. However, the punishment is limited to fines: The Federal Reserve said the bank will pay $100m to resolve claims that it provided “inadequate” responses to bank examiners and insufficient oversight of compliance to US sanctions, bank secrecy laws, and anti-money-laundering rules. Separately, the bank will forfeit $227m under deferred prosecution agreements with the US Justice Department and the New York District Attorney. The settlements are on top of the $340m paid to New York’s Department of Financial Services in August.HSBCFinally we head to the holy grail of scandals of recent times. The HSBC fine for money laundering charges this week reached a record $1.92 billion (£1.2bn) as Europe’s biggest bank settled charges in an agreement with the US Justice Department. By accepting its fault and paying for settlement, HSBC avoided criminal charges. The bank agreed to ‘deferred’ prosecution by Manhattan’s District Attorney’s office and the Justice Department. A report by The Times newspaper said a money-laundering indictment or a guilty plea to money-laundering charges, would “essen-tially be a death sentence” for HSBC and cost its license to operate in the United States. The astonishing aspect is that HSBC’s dealings with Mexico were considered to be a “low risk” for money laundering, despite the fact that HSBC’s Mexico operation is said to have transferred some $7 billion from Mexico to the United States, much of it thought to have been money from drug cartels. HSBC also continued to do business with various banks in the Middle East that were said to be funding Al Qaeda groups. Furthermore, one begs to ask the question if HSBC’s $1.9bn (£1.2bn) fine is really worth all the fuss it is creating? Well, it’s a world record for the offence of money laundering and breaking sanctions. However, the sum represents only about four weeks’ earnings given the bank’s pre-tax profits of $21.9bn last year. Therefore, it probably hurts HSBC’s reputation, but not its pockets or bonuses. Therefore, what makes me smile with unease is the way the news of the world-record fine on HSBC gets swept under the carpet sooner than it took me to forget my first girlfriend in boarding school. The bank scandal was headline news last week and by the weekend, we see the news disappear in the newspapers and TV broadcasts. The BCCI scandal on the other hand, took more than two decades to unravel, the accountants and liquidators looting the funds over the years with over 90% of its creditors being reimbursed. Where did all this money come from if the bank was insolvent?The global drug money laundering market at the time when BCCI was shut in 1991 was US$200 billion and BCCI was accused of only US$14 million. A mere $14 million is small fish to fry in front of $200 billion! Now the money launder-ing laws are much more stringent than two decades ago. In the light of the HSBC and Standard Chartered scandals, do you think now money laundering does not exist? Not only does it exist but, the size of the market has increased mani-folds. Despite more strict and stringent laws the fraudulent market is growing.We also need to focus on the enormous philanthropic efforts of BCCI and Agha Hassan Abedi on a global scale

that people worldwide are still benefitting from today. How many people know that the world renowned, best private hospital in the UK – Cromwell Hospital – was established by BCCI? The BCCI foundation, now known as the ‘Infaq foundation’, helps millions of people even today with its funds. BCCI also established top class educational facilities like NUST and FAST in Pakistan. Not forgetting how it changed the lives of 14,000 employees and their families and gave them a dream and ambition to think ‘Big’. The difference between the fates of BCCI and HSBC following accusa-tions of similar ground but the latter being more serious, can be seen by all.Furthermore, it was BCCI that funded and set up the Princes Youth Business Trust (now known as the Prince’s trust) that gave awards under the patronage of Prince Charles to young entrepreneurs who needed start-up loans for their small businesses. These were all funded by BCCI. The Prince of Wales himself was a great affiliate of the Bank.The world needs to wake up and acknowledge the great tragedy and miscarriage of justice that was carried out over 20 years ago. The world opinion on BCCI is of the ‘Bank of Crooks & Criminals International’. That was US Senator John Kerry’s opinion anyway. I must stress though that the level of regard I have for his opinion is the same regard Barack Obama has for my personal choice of porridge oats cereal for breakfast. Therefore the less said the better.The question that needs to be asked is “Why are the UK taxpayers bailing out banks such as RBS, Barclays, Lloyds TSB and HSBC that became insolvent due to their own fraudulent activities?” Whereas BCCI was shut down even though it was financially sound and backed by the UAE Government and didn’t ask for a single penny from the taxpayer!The university textbooks, Google and Wikipedia need to be re-written to know that BCCI is no longer the ’largest financial fraud in history’.- Excerpts from the upcoming book ‘What comes round goes

around – The True Financial Crisis’ by Mubashir Malik. - Mubashir Malik currently works in Public & Media relations

at a Joint Venture of the world’s largest oil producer Saudi Aramco.

This checklist can also be used to help you in a more traditional performance appraisal process.Footnotes:Performance Appraisal Rating FactorsThe following are samples of rating factors and example standards taken from a variety of sources. Some may overlap, and some may need to be expanded to include more descriptive and/or numerical measures. Please feel free to combine or modify them to fit your needs by cutting and pasting.• Adaptability: Efficiency with which employee works under

stress and responds to change. Demonstrates ability to modify behavioral style and approach to goal.

• Assertiveness/Motivation: Degree to which the employee pursues goals with commitment and takes pride in accom-plishment. Demonstrates self-confidence and positive attitude towards self and others

• Attendance: The extent to which the employee can be depended upon to be available for work and to fulfill position responsibilities.

• Communication: The extent, to which the employee effec-tively listens, conveys and receives ideas, information and direction. Assesses and takes steps to improve ability to communicate (written and verbal) so ideas and consultations are conveyed with precision and efficiency.

• Creativity: Extent to which employee generates workable and innovative ideas, concepts and techniques. Initiates new and creative ideas or procedures to enhance the department or organization.

• Customer Focus: The degree to which the employee takes the initiative to meet internal and external customer needs in a timely and courteous manner.

• Customer Service: Serves customers in a manner that increases their confidence and knowledge to resolve their own problems. Advises in a manner consistent with the complexity and nature of the customer's need.

• Dependability/Initiative: The extent to which an employee effectively and enthusiastically accomplishes assignments with minimal supervision. Demonstrates eagerness, positiv-ism and takes on new responsibilities.

• Job Knowledge: The demonstration of technical, administra-tive, managerial, supervisory, or other specialized knowledge required to perform the job. Consider the degree of job knowledge relative to length of time in the current position. Effectively learns new skills.

• Judgment: Ability to analyze problems or procedures, evaluate alternatives, and select best course of action. Obtains and evaluates pertinent information to determine source of and alternative solutions to problems.

• Initiative: The degree to which the employee independently performs and accomplishes assignments. Independently contributes ideas and projects.

• Interpersonal Relations: The degree to which the employee shows understanding and sensitivity to needs and problems of others. Works cooperatively and effectively with others to achieve unit goals

• Management Skills: Extent to which employee demonstrates effective management abilities and overall results. Effectively sets goals and establishes priorities.

• Planning & Organizing: The extent to which the employee plans, organizes and implements tasks or programs. Effec-tively manages tasks or program assignments including follow-through and delegation.

• Problem Solving & Decision Making: Degree to which employee demonstrates ability to clearly isolate, define and seek solutions to problem areas.. Effectively identifies & evalu-ates alternative solutions and flexible in modifying decisions.

• Productivity: Degree to which the employee produces the expected quality and quantity of assignments. Attains conclu-sive measurable results.

• Quality of Work: The ability to set high standards for own personal performance; strive for quality work; put forth extra effort to ensure quality work. Consistently delivers what is required when required

• Quantity of Work: The volume of work produced by the employee, along with his or her speed, accuracy and consis-tency of output. Accomplishes assigned work in an organized, timely manner

• Resourcefulness: Consider the degree to which employee is a source of supply and support to the department, customers, and/or the organization as a whole. Masters difficult situations in a timely and effective manner.

• Responsibility: The degree to which the employee demon-strates dependability in work performance. Completes work in a timely, capable and reliable manner

• Safety: Degree to which employee adheres to safety and health regulations. Maintains and observes safety and health standards.

• Stress Tolerance: Degree to which employee's performance demonstrates stability under time and/or interpersonal pressure and opposition. Demonstrates composure and good judgment in stressful situations.

• Time Management: The ability to adhere to one's responsibili-ties in a timely manner. Manages multiple tasks with accuracy and efficiency.

• Work Habits: The manner in which an employee conducts his or herself in the working environment. Demonstrates effec-tive time management skills.

• Teamwork: The degree to which the employee works well in a team setting. Interacts and exchanges idea, observes the abilities and ideas of fellow team members.

• Working with Others/Cooperation: Extent to which employee works cooperatively with customers, co-workers and the public. Recognizes strengths and limitations of self and others. Focuses on performance rather than personality in relating to others.

• Cost Effectiveness: Extent to which employee seeks best use of materials, equipment, and staff to maximize efficiency and effectiveness. Establishes budget and/or functions within the budget.

• Delegation & Supervisory Skills: The extent to which the employee shows the ability to effectively authorize work and supervise subordinates. Motivates employees to think and work independently. Recognizes individual capabilities and assigns work accordingly.

• Leadership: Consider the employee's ability to direct the operations, activity and performance of others. Creates environment that guides employees to accomplish unit and individual goals.

• Performance Appraisals: Degree to which employee prepares thorough and objective annual appraisals. Acknowledges good performance and discusses performance problems.

• Staff Development: Degree to which employee provides oppor-tunities to challenge subordinate's capabilities and develops the knowledge and skills necessary for career development. Identifies training programs to improve subordinate's performance.


s the existing political system is expected to sustain in Afghanistan beyond 2014 it is likely that with political stability there may be a huge increase in the demand for capital as well as consumer

goods for sustenance. The rising demand of consumer goods in Afghanistan would result in increasing use of Pakistani trade corridor for the landlocked Afghanistan. Although rising demand for capital and consumer goods would be a positive sign for Afghanistan but for Pakistan increasing use of its land as trade corridor would result in further flooding of her markets with smuggled foreign goods. Because whatever be the scale of demand for goods in Afghanistan, the entire quantities of items imported for or by Afghanistan could not be utilized there and a large part of the goods would be smuggled into Pakistani markets. Having a population of estimated 190 million people Pakistan has been a huge consumer market in the World and far greater than war-shattered Afghanistan with only 35 million people. It may be mentioned that in July 2010 Pakistan and Afghanistan signed a new transit trade agreement called Afghanistan-Pakistan Transit Trade Agreement (APTTA)

replacing the then existing Afghanistan Transit Trade Agreement (ATTA) of 1964. The new trade agreement between Pakistan and Afghanistan was facilitated by the United States, which wanted to give an outlet to exports from Afghanistan through Pakistan as well as to address Kabul’s concern regarding the ATT. On the ATTA both Afghanistan and Pakistan have had serious reservations, though the nature of objections of both countries had been fundamentally different but mutually reinforcing. The main grievance of Afghanistan about ATT had been the restricted list of items allowed to be imported through Pakistan. Goods worth billions of dollars origi-nally meant for Afghanistan were smuggled back into Pakistani markets. The smuggled goods imported under ATTA have been inflicting huge damages on Pakistan’s economy in the form of huge revenue losses of around $5 billion a year. According to estimates the worth of illegal goods pour-ing into Pakistan from Afghanistan is around 5-7 billion dollars while Pakistan has been losing some $1.5 billion to $2 billion by way of evasion of excise and custom duties. This is in addition to the revenue losses due to

Paying for seriousregulatory violations

he US administration has finally made several banks pay a lot for violating US regulations, and set a good example, but what isn’t yet clear is whether it has punished as severely the bureaucracy in its

administration whose negligence permitted these violations to go on, for years at a stretch. Some of the banking sector analysts think that these settlement costs were ‘trivial’ in terms of the banks’ book value. Indeed that is the case. At a news conference, Lanny Breure, head of the Justice Depart- ment’s criminal division, admitted that an out-right prosecu-tion of HSBC was considered but dropped due to its damag-ing impact on the bank’s viability, and thus on jobs and the US economy. What he avoided saying was that the action could send a dangerous message to global banks i.e. they must exit the US market. One thing is clear though: big (i.e. global banks) isn’t beautiful anymore.Two big banks–HSBC and Standard Chartered will pay $1.9 billion and $627 million respectively though their regulatory violations were similar because they involved booking US dollar denominated transactions for parties in Iran, Sudan, Libya and Burma. HSBC, payer of the highest penalty thus far, faced this situation for the third time in a decade due to lax controls. Regulators had issued directives for improving oversight in 2003 and in 2010. Now for a third time HSBC has been ordered by US authorities to improve its monitoring of suspicious transactions. Under a five-year agreement with the Justice Department HSBC has agreed to appoint an independent monitor to evaluate progress in improving its compliance, and as part of the overhaul of internal controls, has launched a global review of its “Know Your Customer” files, which will cost an estimated $700 million over the next five years. The files are designed to ensure that HSBC does not unwittingly act as a conduit for criminal funds.HSBC says that after receiving the 2003 and 2007 regula-tory warnings, during 2009-2011 it increased by over nine times its outlay on anti-money laundering systems, and wound up all suspect business relationships besides cutting cutback on bonuses for its executives. As evidence of its determination to change, it cited the hiring of Stuart Levey, former chief legal officer of the Treasury Department, in January 2011. Standard Chartered Bank will pay $100 million forgiven for violations alleged by the Federal Reserve Bank according to which it offered "inadequate and incomplete responses" to bank examiners, and provided insufficient oversight for the sanctions compliance program that it had to implement por-traying its inadequate concern for abiding by the regula-tory directives. Besides the above, the bank also had to enter into separate deferred prosecution agreements with Depart-ment of Justice, and the New York District Attorney under which it will pay $227 million in fines pertaining to violation of US regulations that the bank allegedly committed between

2001 and 2007. The US Treasury also entered into an agree-ment to withdraw allegations that the bank's London and Dubai offices violated US ‘country sanctions’, but agreed that $132 million worth of penalty in this regard formed a part of the bank's payment to Department of Justice. The federal-state settlements come several months after the bank had agreed to pay $340 million to resolve a case filed by the New York banking regulator. The bank will finally end up paying total $627 million in terms of regulatory fines.

The other major regulatory violation that many mega banks indulged in was the manipulation of the London Inter- bank Offer Rate (Libor)–the rate used by banks all over the world as the yardstick for fixing floating rates of interest on loans. On December 19, Union Bank of Switzerland (UBS) agreed to pay a $1.5 billion fine after admitting fraud and bribery in the rigging of global benchmark interest rates. In June 2012, Barclays was the first to admit its role in manipulating the Libor, and was fined $450 million – one third of the amount UBS will pay. The levy on UBS reflects that scope of its misconduct was far higher compared to that of Barclay’s. This settlement ended a torrid 18 months for UBS during which it lost $2.3 billion in a rogue trading scandal in its London office, underwent a management upheaval that led to thousands of job cuts. "We have to acknowledge that the behaviour of certain of our employees who were disciplined during this investigation....... is, and was unac-ceptable," said UBS CEO, Ermotti, adding that around 40 people had either left UBS or had been asked to leave. Earlier, UBS office in Japan had pleaded guilty to one count of fraud relating to manipulation of benchmark rates, including the Yen’s Libor rate. The probe high-lighted the criminal role played by a UBS trader, who "embarked on a coordinated campaign" to manipulate the Yen’s Libor rate. Britain’s Financial Services Authority said that UBS staff made "corrupt" payments to reward brokers for helping to manipulate the rates, expanding the scandal to include bribery. Separately, a court in Italy found UBS guilty of a fraud in mis-selling derivatives to the city of Milan. But in this fraud Deutsche Bank, JP Morgan and Depfa Bank too were found guilty of the same crime.

TBank Fine* Date US-sanctioned countries HSBC 1,921 Dec 2012 Cuba, Libya, Mexico, Sudan StanChart 667 Dec 2012 Cuba, Libya, Myanmar, Sudan ING 619 Jun 2012 Cuba, Iran Cr Suisse 536 Dec 2012 Cuba, Iran, Libya, Myanmar, Sudan RBS 500 May 2010 Iran, Libya Lloyds 350 Jan 2009 Iran, Sudan,Barclays 298 Aug 2010 Cuba, Iran, Myanmar, Sudan *All amounts in millions of US Dollars

BANKING & FINANCE


by Mustafa Ali Shaikh

the damages to local manufacturing sector. The five to seven billion dollars worth of smuggling under the cover of Afghan transit trade annually is a huge amount by any count particularly for the extremely underdeveloped regions of KP, Balochistan and FATA. The unending huge smuggling through ATTA has been the reason behind Islamabad taking both protective measures of limiting the number of items Afghanistan could import through Pakistan and denying India trade corridor through Pakistan for Afghanistan. Pakistan has been fully justified in rejecting Indian and Afghan requests for giving both a trade corridor. Because the war-ravaged Afghanistan with limited writ of central government has never been in a position to check the landing back of ATTA goods into Pakistan. Also keeping in view the unhindered smuggling across the Durand Line allowing Indian goods access to Afghanistan would have been suicidal as Pakistani markets could be flooded with Indian goods and, due to their low manufacturing cost and relatively good quality, could be the choicest consumer items in Pakistan.

The ATTA has been greatly used as a cover by mischie-vous elements especially smugglers to feather their nests by inflicting irreparable loss on national kitty and in particular stifling the economy of KP, Balochistan and the FATA. Presence of smuggled items inside Pakistan, even in the settled areas, suggests that the country’s customs apparatus has failed to prevent the illegal move-ment of goods. Smuggling by land routes is not possible without the connivance and abetting of the officials who are posted on these routes. Although technically illegal, thousands of people at the border are involved in the illegal trade. Moreover, the re-entry of transit trade goods also support other sectors like transporters, work-shop owners, and real estate businesses in KP, Balo-chistan and FATA. The illegal movement of goods across the Pakistan-Afghanistan border has had another ill-effect in the shape of evolution of an undocumented economy in the north- western regions of Pakistan. The economic infra-structure in these regions has largely been non-existent or merely rudimentary, which has had compelled a large and increasing number of people to associate themselves with the illegal goods businesses. It is important to note that keeping in view the easy money available through smuggling across the Pakistan- Afghanistan border, a large number of people from other

parts of Pakistan also joined in the illegal activity. More unfortunate has been the involvement of thousands of Afghan refugees in the illegal trade. Resultantly, slowly and gradually, as mentioned earlier, a huge illegal and unregulated economy came into existence which has not been without its social and cultural consequences on Pakistan specifically in its north-western regions. The foremost socio-cultural consequence of the billions of dollars worth of smuggling across the Durand line has been the plummeting respect for the law of the land leading to constant erosion of the writ of the state which traditionally has always been weak in these regions and whatever state control the British colonial rulers established there through modern institutions of revenue, land record, regulation of businesses and secu-rity have lost their utility. This situation has had a huge negative impact as a large number of people got them-selves involved at will in illegal trade. In order to keep the state institutions at bay most of the individuals and groups involved in smuggling of goods from Afghani-stan to Pakistan established links with criminal gangs. The latter also took advantage of the condition by strengthining and expanding their networks vertically and horizontally in the process criminalizing the society on the one hand and obliterating the state writ on the other hand. The militant and terrorist groups which in the recent decades emerged and thrived in FATA, KP and Balo-chistan have also received handsome amounts from people involved in smuggling across the Durand Line under the cover of Afghan transit trade. The huge administrative vacuum created due to militants and terrorists throwing away and supplanting of the state apparatus and institutions in the areas under their control has suited the interests of the smugglers. Having earned large sums of money through smuggling under the cover of so-called transit trade to Afghanistan a nouveau riche community came into existence. This community in order to institutionalize and consolidate their wealth and status started investing money in other parts of the country especially Karachi, Lahore and rest of the Punjab. There they purchased lands and constructed plazas and shops where most of the goods smuggled from Afghanistan are transported and put on sale. Having the experience of economically entrenching themselves through establishing links either with crimi-nal gangs or illegal tactics the nouveau riche community

Settlement with UBS prompted a political and public backlash against the standards in banking across EU and the US. Libor benchmarks are used for trillions of dollars worth of loans around the world. Tiny shifts in the Libor benefit dealers in complex products. Details of the settle-ment with Barclays showed traders brazenly exploiting the system. The controversy is expected to ensnare the other big lenders and spark civil lawsuits as well as possible criminal proceedings against individuals involved.According to an international investigation, dozens of UBS staff manipulated the Libor that is used to price trillions of dollars worth of loans across the world, in collusion with brokers and traders at other banks. The penalty UBS agreed with US, UK and Swiss authorities is the second largest ever imposed on a bank forcing the UBS CEO Sergio Ermotti to admit his deep regret over “this inappropriate and unethical behaviour. No amount of profit is more impor-tant than the reputation of this firm". Because Libor benchmark rates are used to price trillions of dollars worth of loans, tiny shifts in these rates benefit-ted banks by millions of dollars, and every dollar that a bank benefited from meant an equal loss to a bank, hedge fund or other investor on the other side of the transaction – raising the threat of civil lawsuits. "The big unknown factor is the civil litigations that could follow as a result," said the head of equities trading firm Fidelity Worldwide Investment, one of the biggest investors in UBS, and went on to add that "The issue for the shareholders is the challenge of pricing that risk in."In the US, civil litigations have been filed by a variety of the affected entities but it would be tough to establish what was the type of distortion in the Libor on a specific date, who stood to benefit therefrom and who lost and how much. In all cases, there will be entities that earned unfair profits, and they won’t be only banks and brokerage houses. Given the hardships involved in assembling the relevant facts to prove their case, chances are that only few of the large number of affected parties, especially millions of small borrowers – the lot that availed billions of dollars worth of consumer loans – will not succeed in proving the losses suffered by them on account of manipulation of the Libor. The other category of misconduct by banks was to disburse huge (often shamefully high) bonuses to their executives via accounts maintained in tax heavens. JP Morgan is one such outfit that is now heading for a settle-ment with the British government, but in this case, more than 2,000 employees of JP Morgan will pay GBP 500 million representing the taxes they avoided since JP Morgan paid their bonuses through a Trust located in the Jersey Island. Employees who opt not to pay their share in the settlement would pay higher taxes once they are paid their share in the assets of that Trust, which is now being liquidated. JP Morgan’s Trust in Jersey was set up primarily to help its employees avoid high rates of British income taxes. What is strange though is the fact that, according to Financial Times, this Trust was created 20 years ago, with full knowl-edge of the British authorities. What is yet to surface is when misuse of the Trust in violation of its approved mandate i.e. deposit of JP Morgan’s employee bonuses came into the knowledge of the British authorities but the

huge share of JP Morgan’s employees (GBP 2 billion) in the assets of the Trust reflects the fact that it was being used for this purpose for a number of years before being caught. Exposure of this likely reality will cause considerable embarrassment to British authorities and hurt the image of London as financial services’ center.Market analysts are of the opinion that the settlement terms are very generous because the ‘real’ tax liability could have been GBP 1 billion, the argument being based on the logic that Trust assets now repayable to JP Morgan staffers could exceeded GBP 2.0 billion. Assuming the standard tax rate of 40 percent on salary income in the highest bracket, recover- able tax penalty had to be close to GBP 1 billion. Coming at a time when British fiscal deficit is dangerously high, this profile of the settlement is being criticized pretty harshly.Paying bonuses into employee accounts in tax heavens was one of the many questionable practices rampant in financial services, practically everywhere. In countries with exchange controls (blocking transfer of such funds abroad), financial institutions having head offices abroad began retaining these funds in head offices. Domestic financial institutions began facing this problem during the last economic boom because, between 2004 and 2008, these institutions too began paying unbelievably high bonuses to their preferred employees; the challenge was how to hide these unexplainably high bonuses from the rest of their workforce.The route they adopted was to ask their executives to open bank accounts in other institutions wherein they were paid their bonuses. There were cases wherein CEOs were hired at remunerations that were ridiculously high by the prevailing standards. In these cases, these overly paid CEOs were advised to open their bank accounts in other institutions so that none in their own organization would know what they were being paid. This happened even in case of bank CEOs, and it went on for years. In some cases, even the regulatory conditions requiring the disclosure of the remu-neration and other benefits paid to the CEOs were violated to understate these benefits, reflecting on the quality of investigative work by external auditors who certified the institutions’ financial statements. But this trick failed; insid-ers exposed the truth.

UK’s financial sector is contractingBritain’s financial services sector – the sector that used to be the key provider of jobs to young graduates is contract-ing as shown by the figures of fresh job creation in November. As per Astbury Marsden, a firm that recruits staff for the UK’s financial services sector, just 1,790 fresh jobs were created, down from 2,670 in November 2011 and over 13,000 in the same month in 2007 i.e. just before the onset of the global recession. The drop in November 2012 “is, by far, the most dramatic slump we have seen over the last few years”, and it must be “a real wakeup call" said the firm’s Chief Operating Office Mark Cameron. Besides Astbury Marsden, Morgan McKinley, a recruit-ment consultancy reported creating only 2,079 new jobs in the financial services sector in November – i.e. 24 percent drop over November 2011. The number of professionals looking for jobs in the ‘City’–the nickname for London's financial sector–is at its lowest level since January 2004 (i.e. end of the last recession), said Morgan McKinley.


also replicated these illegal and unethical practices in their new abodes in rest of the country particularly Karachi. The Qabza Mafia in Karachi, having many members from upcountry, is a case in point. The smuggling of a huge volume of goods into Paki-stan from Afghanistan imported for the latter via Paki-stan has scuttled real industrial development in the above-mentioned provinces and federal territory while also greatly affecting their corporate structure. The already weak industries in KP and Balochistan could not compete with the cheap smuggled foreign goods that awash the markets in these provinces and the adjoining tribal areas as consumer psychology and choice in Paki-stan is always in favour of foreign-made items. This is one of the main reasons that a major portion of the manufacturing sector of the provinces is sick. The extremely weak industrial infrastructure in these areas hindered the process of socioeconomic development and positive social changes, which are the natural corol-lary of development, there. Now when Pakistan and Afghanistan have agreed on the new trade regime in the form of APTTA business and political circles in Pakistan fear that the new agree-ment would increase the volume of cross border smug-gling of goods. The powerful gangs of the criminals involved in smuggling in collusion with corrupt custom officials would fully exploit the new agreement to their utter advantage. It is a well-known fact that a big part of the Taliban insurgency in Pakistan and Afghanistan is financed with the money obtained through smug-gling. As now under the provisions of APTTA, traders from Afghanistan would be able to carry goods in their own trucks through Pakistani territory from Indian border it is feared that a good part of these exports would never reach their destination and end up in Paki-stan. This would provide further financial space to militants. Thus the new transit trade agreement of Afghanistan and Pakistan may prove counterproductive if measures are not taken to check smuggling. Sadly, the agreement under reference has nothing about this important issue of smuggling which would increase militants sources of finance. Keeping in view the big volume of invisible trade across the porous border of the two countries, there is need to further increase the volume of official trade between Pakistan and Afghanistan for the benefit of the people of these countries at large. Otherwise the unofficial trade or smuggling would continue to enrich a handful of people. However, before proceeding on any such target of increasing the official trade the foremost obstacle, which has to be removed, is to stop the smug-gling of various goods worth billions of dollars into Pakistan from Afghanistan. Another important strategy to check the illegal trade is to relocate and re-employ the huge workforce, presently involved in smuggling, productively in other sectors, which unfortunately are not functional in the KP, FATA and Balochistan. So the panacea is developing the local industry and services sector. This may not only provide alternative job opportunities to those engaged in smug-gling, but would also discourage illegal trade as local inhabitants own stakes would be involved.

BANKING & FINANCE

CountryRisk Management

ackground: Simply speaking, country risk refers to the probability that changes in the business environ-ment in another country where you are doing business may adversely impact your operations or payments.

This risk may arise out of the economic, social or political condi-tions within the jurisdiction of the foreign country. For instance, deteriorating economic conditions or political and social unrest in a foreign country may have an adverse impact on the ability of a borrower in that country to fulfil his obligations. Country risk is not limited solely to an institution’s international lending operations; other balance sheet activities such as overseas investments, placements etc, and off balance sheet exposures such as letters of credit, guarantees/bonds, foreign exchange contracts etc., also contain country risk. This distinctive nature of country risk necessitates that sound country risk management should be a part of the risk management framework of institutions that engage in international activities. Types of Country Risk: Country risk may occur in different forms. The most common categories include:(a) Sovereign Risk. This denotes a foreign government’s capacity and willingness to fulfil its direct and indirect foreign currency obligations. A government’s capacity or willingness to repay may be affected by different reasons. For instance, one should remain alert on whether the repayment capacity

of a country has been affected if that country appears or may appear on a watch list that have international implications.(b) Transfer/Convertibility Risk. This is the risk where the borrower or obligator may not be able to obtain the necessary foreign exchange to service its cross-border obligations.The risk arises if changes in government policies, or any event, result in a barrier to free conversion or movement of foreign exchange across countries. Under such conditions, a borrower may not be able to secure foreign exchange to service its external obligations. Where a country suffers economic or political problems, leading to depletion of its foreign currency reserves, the borrowers in that country may not be able to convert their funds from local currency into foreign currency to repay their external obligations.(c) Contagion Risk. The risk that adverse developments in one country may lead to, say, a downgrade of rating or a credit squeeze for other countries in the region, notwithstanding that those countries may be more creditworthy and that the adverse developments do not apply to them.(d) Currency Risk. The risk that a borrower’s domestic currency holdings and cash flow become inadequate to service its foreign currency obligations because of devaluation.(e) Macroeconomic Risk. The risk that a borrower in a coun-try may suffer from the impact of high interest rates due to measures taken by the government of that country to defend

B

by Ferozeali Hussaini

0.0 - 6.0

6.1 - 17.0

17.1 - 23.0

23.1 - 26.0

26.1 - 29.0

29.1 - 31.0

31.1 - 34.0

34.1 - 36.5

36.6 - 39.0

39.1 - 44.5

No Data

Economic Risk Ratings


akistan’s economy is already in shambles, with trade deficit being one of the important factors. The recent goods transporters’ strike further contributed to the country’s problems on

economic front. Prompted by harassment by the bhat-tha mafia, rampant kidnapping of drivers, high handed-ness of the Motor Police and other Highway authorities, the strike incurred losses worth billions of rupees due to stuck up export and import shipments at the Karachi Port and Port Qasim. While halting the export and import activities and damaging the country’s industrial manufacturing capacity, according to some estimtes, the strike resulted in per day loss of around Rs. 4 bilion to the foreign exchange earnings through export of textile products alone. The strike was also detrimental to import business as importers were forced to pay demur-rages for not being able to clear their consignments from the ports. Starting on 5th December 2012 the strike continued for 12 days causing a severe drain on government’s revenue collection. The prime industrial export-oriented sectors which were affected by the strike and faced huge financial losses in terms of non-availability of basic raw material for production and output included textile, leather, marble and surgical goods. The country had suffered export loss of around $800 million due to strike as 25,000 containers loaded with value-added textiles, rice,

cement, leather made-ups and perishable commodities could not meet the shipping schedule. Horticulture, vegetables and fruits were the hardest hit as they need to be delivered on time to meet seasonal requirements in the world market. Similarly, value-added textile goods worth millions of dollars meant to meet consumers’ demands on the occasion of Christmas and New Year festivities werbadly affected in large quantities inside manufacturing facilities or on roadsides in containers as they could not meet shipping schedules.Leaders from various trade & business associations sought immediate government intervention to resolve the issue. The government did respond but quite late in the day; by the time the government woke up major damage to the country’s economy had already been done. Talking to Value Chain, representatives of the goods transporters’ associations narrated the causes and the issues that forced them to take this extreme course of action. Shoaib Khan, General Secretary, Karachi Goods Carrier Association, stated that transporters’ top issue has been the insecurity on major highways and motorways and insulting behavior meted out to them by the motorway police. He alleged that the motorway police officers misbehaved with the drivers and illtreated themand detained their vehicles, for up to 72 ho or more, resulting delay in delivery of consignments. He said that the drivers and the vehicles were released

its currency. The government may also decide to nationalize or expropriate foreign assets. Elements of Country Risk Assessment: Institutions are expected to have an effective country risk analysis process in place to assess the risk associated with each country in which they are conducting or planning to conduct business. The level of resources devoted to the process may vary depending on the size and sophistication of an institution’s international opera-tions. The results of country risk analysis should be integrated closely with the process of formulating marketing strategies, approving credits, assigning country risk ratings, setting country exposure limits and provisioning, etc.In assessing the risk of a country, institutions should consider both the quantitative and qualitative factors of that country, such as the size and structure of the country’s external debt, quality of the policy-making function, social and political stabil-ity and legal and regulatory environment of the country. Institutions may make use of internal and external sources for assessing country risk but they should conduct their own coun-try risk assessment instead of relying entirely on external assess-ment. The analysis, process and the level of resources devoted to it will depend upon the size of foreign exposure. However, such process should include effective oversight by the board of directors, adequate policies and procedures and other essential elements as set out in the following paragraphs:Oversight by the Board of Directors: It is the responsibility of the board to define the level of country risk the institution can undertake and to ensure that the institution has country risk management framework consistent with the level of institution’s cross border exposure. There should be well-defined policies and procedures for country risk management. Similarly, the senior management should ensure that the staff entrusted with the responsibility is capable of dealing with it and the managerial structure and resources devoted for country risk management are commensurate with the level of the institution’s overseas exposure.Policies and Procedures: The management of an institution is responsible for implementing sound, well-defined policies and procedures for managing country risks. Institutions (having significant cross border exposure) should have written policies and procedures for their country risk management. Generally, such policies/ procedures encompass following aspects:• the institution’s business strategy in cross-border activities;• the overall limits and sub-limits for cross-border exposures,

including the authority to approve these limits and exceptions, if any;

• the standards and criteria to be used to analyze the risk of particular countries;

• the authorized activities, investments, and instruments;• an internal rating system or external ratings (if the bank has

little cross border exposure and it is not feasible to institute an internal country risk rating mechanism).

• risk tolerance limits.• mechanism to monitor and report the institutions’ country

exposure for senior management and BOD’s review.To be effective, these polices should be communicated down the line to the concerned offices and staff. The policies should be approved by the board and subject to review semi-annually or more frequently, if the need arises.Country Exposure Reporting System: Each institution must have an effective, reliable system for capturing and catego-rizing the volume and nature of cross-border exposure, and a

reporting system in place to generate management reports which are detailed enough to permit analysis of different types of risk and cover all aspects of institution’s operations. The reports should also identify the exceptions in a timely manner. Institutions should consider not only outstanding exposures but also un-drawn commitments.Country Risk Ratings: Country Risk Ratings summarize the conclusion of the risk analysis process. Ratings are important as they provide a framework for establishing exposure limits. However, the institutions are given a choice either to use exter-nal ratings or establish their own country risk ratings frame-work. The institutions that have significant cross border expo-sure greater analytical resources and access to better informa-tion may opt for the latter. These institutions should consider external rating as an input for their internal ratings. Ratings should be reviewed semi-annually or more frequently if the situation warrants. Country risk ratings should be assigned at least annually to every country in which institutions have substantial exposures. The ratings can provide a framework for establishing country exposure limits that reflect the institution’s tolerance for risk. They can also be used to determine the appropriate level of provisions for cross border exposures.Country Exposure Limits: Institutions should have a system for establishing, maintaining and reviewing country exposure limits, which usually reflect a balancing of the following consid-erations:a) the institution’s overall strategy on international activities, i.e.

exposures to individual countries/jurisdictions, the types of country risk and the types of exposures covered under each rating category should be clearly defined;

b) the country’s risk rating and the institution’s appetite for risk;c) the perceived business opportunities in the country; andd) the desire to support the international business needs of

domestic borrowers.Country exposure limits should be approved by the board of directors, or a committee thereof, and communicated to all affected departments and staff. The limits should be reviewed and approved at least annually and more frequently when concerns about a particular country arise. Compliance with country exposure limits should be monitored at least on a monthly basis. In the case of any exception to approved country exposure limits, it should be properly autho-rized and reported to an appropriate level of management or the board for corrective measures.Monitoring Country Conditions: Institutions should have a system in place to monitor current conditions in each of the countries where it is significantly exposed. The level of resources devoted to monitoring conditions within a country should be proportionate to the institution’s level of exposure and the perceived level of risk. The information gathered in this process should be properly maintained in the country risk analysis files. The communications between senior management and the responsible country managers should be regular and ongoing. There should also be procedures for dealing with exposures in troubled countries, including contingency plans for reducing risk and, if necessary, exiting the country.Country Risk Provisioning: These are generally referred to provisions set aside by authorized credit institutions to absorb potential losses arising from the country risk exposures. There are two common approaches that institutions may adopt for country risk provisioning: (a) to earmark country risk provisions


only when the palms of the motorway officials were greased. According to him, the security on the highways was almost non-existant with dac left free to kidnap drivers along with the truck and loot the containers.”Sometimes they open fire at our drivers when they drive fast to escape from the bandit,” he said , he said, have been Karachi to Quetta and Interior Sindh and Punjab highways. He said the vehicles are looted at the Northern Bypass, Hyderabad and several places in rural Sindh. In Punjab, Lodhran, Khanewal and Dunyapur, have been hotspots for robberies.He further complained that National Highway Author-ity inspectors stop their vehicles and measure their loaded containers on too many check posts without any reason. He criticized the weighing system of National Highways and Motorway Police and suggested that the authorities should inspect and check the weight of their vehicles before they leave Karachi. After leaving Kara-chi, it is impossible for truck drivers to remove the extra load from the container/vehicle as they are not autho-rized to open the containers. Inspectors insist on removing the extra load and on refusal they detain “our vehicles , at times for more than 72 hours. It is unfair to ask the drivers to dump the extra load when they have travelled half the way.To a question as to why the carriers overload their containers beyond the prescribed limit, he said that we have no other option as there is no transportation substitute available such as railway carriage. He further explained that prescribed weight limit depends on the number of axles of a vehicle. Transport vehicles are allowed to carry lesser load than an oil tanker with the same number of axles. He said that in all fairness, the authorities should set a uniform load limit for both goods trucks and oil tankers.Scribing goods transporters’ another wish, he demanded that government should allocate them 500 acres of land at Northern bypass as promised. He further demanded that government must open the Mai Kolachi route for heavy trucks as it costs transporters extra fuel charges when they use the alternate route. He said that it is only unfair that the oil tankers allowed to use Mai Kolachi route while the goods carriers are denied the facility. The goods transporters counted 5 demands which are as follows:i- Insecurity and escalating crime rate on the highwaysii- Harsh and insulting behavior of motorway policeiii- Weight policy of NHMPiv-Non- fulfilment of the promise to allocate 500 acres of land at Northern Bypass.v- Re-opening of Mai Kolachi route for goods carriers. By the time the government realised the gravity of the situation it was already too late. However, on the inter-vention of the Prime Minister Raja Pervez Ashraf‚ transporters’ alliance called off the strike on the assur-ance that their demands would be given due consider-ation and met wherever possible. The Prime Minister constituted a two -member decisive committee consist-ing of Babar khan Ghouri, Federal Minister for Ports and Shipping and Abbas Khan Afridi, Minister of State for Commerce to negotiate with the transporters.

Federal ministers assured transporters that their right demands would be fulfilled in the shortest period of time,-- three months in this case. Consequent to the negotiations, transporters have now been allowed to use Mai Kolachi Bypass for longer duration of time instead of previously allowed time from 11pm to 6am. The new schedule of passing through the bypass would also be applicable to the vehicles of National Logistics Cell (NLC) and oil tank-ers, and, if these vehicles violate the schedule then the goods transporters would also be allowed to do so. Government also assured transporters that their vehicles would not be stopped at toll plazas for weigh-ing goods. The decision not to stop the vehicles at toll plazas for weighing is for three months. In the mean-timea new bill would be placed before the National Assembly regarding new rates for goods’ weight. Besides, the increase in toll plazas’ rates would also be withdrawn. Sadly, however, implementation of the assurances given is still missing. Shoaib Khan told this scribe that there is no implementation at all on the insecurity on highways issue which is transporters’ prime concern.” Just the next of our ccalling off the strike, dacoits robbed my own vehicle,” Shoaib Khan said adding that “the government is expert in giving assurances only, not implementation.’Are goods transporters justified in their demands? The answer is, “to some extent, yes.” While talking with ‘Value Chain’, Muhammad Javed Chaudhry, Public Rela-tions Officer (PRO), National Highway & Motorways Police, admitted that crime ratio has escalated on some national routes. He said that most of the incidents took place on the link roads connecting to the major high-ways. Javed claimed that motorway police is taking every possible step to curb the crimes in highways. Working in close coordination with local area police they have recoveredsome of the stolen goods and containers from robbers. However, Shoaib Khan, refused to accept and endorse Javed’s statement and insisted that most of the robberies and kidnappings happen on highways rather than link roads. On the other hand, PRO Javed Chaudhry denies Shoaib’s claim that motorway police officials treat drivers harshly

against the aggregate exposures to a particular country (i.e. on a country basis) after accounting for risk transfer and making specific provision against credit risk; and (b) to factor in an element of provision for country risk into specific provisioning for each individual exposure (i.e. on an individual obligor basis). Whichever approach is adopted, institutions should make sure that they have set aside adequate country risk provisions according to their assessment of the probability of losses arising from their cross-border exposures. The criteria for when to provide and how to calculate country risk provision should be specified in the institutions’ policies and procedures, which should also clearly indicate which party has the authority to decide the level of country risk provision. Stress Testing: Institutions should periodically stress test their foreign exposures and report the results to the board of directors and senior management. The testing should include, for example, an evaluation of the impact on an institution’s country risk exposures under different scenarios. The level of resources devoted to this effort should be commensurate with the signifi-cance of foreign exposures in the institution’s overall operations.Internal Controls and Audit: Country risk management process should have an adequate internal controls and that audit mechanisms are available to ensure that the information for senior management and the board to monitor compliance with country-risk policies and exposure limits is true and accurate The internal audit function, in addition to review of compliance with policies/procedures, should ensure the integrity of the reports/information prepared for senior management. As an example, the system of internal controls should ensure that the responsibilities of marketing and lending personnel are properly segregated from the responsibilities of personnel who analyze country risk, rate country risk, and set country limits.Supervisory Review: Taking into account the size and complex-ity of an institution’s cross-border exposures and other factors, the Central Bank will also evaluate the adequacy of an institution’s system to manage country risk and maintain provisions for such risk. On a case-by-case basis, it may require institutions to re-assess their country risk provisions if there are grounds to doubt whether their existing provisioning level is adequate.Risk mitigation strategies: There are several strategies that can help reduce a foreign company's risk profile. Here are a few of the more common ones:• Engage in open, competitive bidding, avoiding ‘fast track’

arrangements. Participation in the latter may invite the accusation that you have bribed local officials.

• Examine the political connections of your local partners carefully. Close association with the current regime may be advantageous now, but once key figures are removed from the political stage you could be in for some nasty surprises.

• Be a good corporate citizen, contributing to the host country's economy and culture with worthwhile public projects.

• Cultivate connections with public outside the industry in which the company operates. They may become very useful in a crisis.

• Do not limit your discussions to representatives of the national or local government. They may not necessarily be a good indicator of public opinion. Make a point of establish-ing an informal dialogue with local journalists, as well as human rights and environmentalist groups.

• The alternative - keeping a low profile - can make you appear secretive.

• Avoid enlisting home government support if the local authorities threaten to break agreements. Such a tactic is often

counter-productive, particularly if it is done publicly.Conclusion: Evaluating country risks is a crucial exercise when choosing sites for international business, particularly if invest-ment is to be undertaken. Certain risks can be managed through insurance, hedging and other types of financial planning, but several others cannot be controlled through such financial mechanisms. Some of these risks may be measured in a risk-return analysis, with some countries’ risks requiring higher returns to justify the higher risks. The study of country risks is also necessary in order to develop alternative scenarios.Changes in trade and investment agreements can substantially change the economic conditions under which a corporation operates. A notable example is China’s entry into the WTO, which will require the country to cut its tariffs significantly and to eliminate many of its restrictions on foreign ownership. Foreign corporations that invested in China prior to WTO membership may suddenly face much less expensive import competition; those required to accept a joint venture partnership with a state-owned enterprise will face competition from new foreign wholly owned subsidiaries. In managing country risks that involve linkages among various political and economic forces, a particu-larly helpful Web site is the Economist Intelligence Unit. The site offers analyses of broad categories of risk as well as risk exposure associated with specific types of investment.Managers should prepare themselves accordingly, with an analysis of interest rates and stock prices, the country’s balance of payments, projections of probable macroeconomic policies, and fiscal and current-account deficits. It is important to exam-ine alternative potential scenarios and projections, and assign probabilities to each scenario in order to determine the risks and rewards connected with particular business opportunities. Pricewaterhouse Coopers has developed an index that indicates how one may quantify the impact of country risks in terms of equivalent tax rates and rates of return.The events of September 11 and the subsequent conflicts have added another dimension to country risk. Specific plans for protection and exit must be based on an analysis of each country. In the context of globalization, the new economy and the chang-ing role of governments, the analysis and management of coun-try risks is now of paramount importance.Notes & Explanations:The variables of macroeconomic indicators:• GDP • GDP deflator • Public debt • Current Account Balance • Interest rates • Forex reserves • Exchange Rate (against the USD) • FDI Inflows • Unemployment • Political Risk Index (PRI)The Risk of default increases by: • deteriorating fiscal conditions • deep recession/depression • wars • political risk • social unrest • deflation • losing control over one’s sovereignty (including monetary policy and the ability to print its own money) References:Nath, H. K. (2008),”Country Risk Analysis: A Survey of the Quantitative Methods” Business Working Paper;Ribeiro, Renato D (2001), “Country Risk Analysis”, www.gwu.edu/~ibi/minerva/spring2001/renato,Saini, G. K. and Bates, P. S. (1984), “A Survey of the Quantitative Approaches to Country Risk Analysis” JBF,Teixeira, M. F., Klotzle, M. C. and Ness, W. L. (2008), “Determi-nant Factors of Emerging Markets Risk: A Studyof Specific Country Risk.” Universidad de los Andes School of Management, Bogota, D.C., Colombia,




AGRICULTURE

Importance of theRural Roads

oad density is the ratio of the length of the country’s total road network to the country’s land area. The road network includes all roads in the country: motorways, highways, main or national

roads, secondary or regional roads and other urban and rural roads. The value for road density i.e. km of road per 100 sq km of land area in Pakistan is about 32.00. Sustained increase in growth needs massive supporting infrastructure. This may be seen from the fact that as Pakistan has failed to put in place the infrastructure the growth has shown an arbitrary pattern. A good year in between low growth periods often cames due to sudden and favorable climatic changes which resulted in good agricultural growth. One such example is 2003-04 when the country saw massive boost in GDP growth of around 8% but after that it started to decline sharply and in 2008-09 reached as low as around 2.5% against a provisioned growth rate of 8% for this year as per five year plan for 2005-10, because there was not enough energy, water and transport infrastructure in place to sustain a growth rate of 7-8%. This situation is worse in the case of agriculture. According to a Food and Agriculture Organization (FAO) report, ‘Lack of physical infrastructure such as roads, stores, refrigerated units, refrigerated transport and cargo services at airports limits the ability of the private sector in

Pakistan to modernize agriculture and deliver benefits back to farmers.” Among other things, roads and especially the farm to market roads, can play a very important role in increasing the agricultural production as well as the wellbeing of the rural population. In fact these roads bring the outside world within the reach and access of the farmers and the rural population. They facilitate the use of modern farm inputs by the farmers and timely marketing of their produce. Apart from this, the direct link with the marketing centres also save the farmer from dealing with middle man. This access affects cropping patterns and encourages the farm-ers to switch to cash crops.After its first involvement in the road project in Pakistan Asian Development Bank (ADB) had prepared a report of its effects on the population of the respective areas. The report stated that after using the improved roads for 3-4 years the people of the area concurred that the project impacted the area positively. It generated additional employment and business opportunities through the estab-lishment of new small scale and cottage industries and road-side stalls and an increase in the number of shops in the villages. It was observed that most of the benefits such as access to health and education, increase in agricultural production and increase in employment near the roads were

R

by Tahir Rauf


he role of HR in the present scenario has under-gone a sea change and its focus is on evolving such functional strategies which enable successful implementation of the major corporate strategies.

In a way, HR and corporate strategies function in align-ment. Today, HR works towards facilitating and improving the performance of the employees by building a conducive work environment and providing maximum opportunities to the employees for participating in organizational planning and decision making process. Today, all the major activities of HR are driven towards development of high performance leaders and fostering employee motivation. So, it can be interpreted that the role of HR has evolved from merely an appraiser to a facilitator and an enabler.The concept of performance management gained its popu-larity in early 1980’s when total quality management programs received utmost importance for achievement of superior standards and quality performance. Tools such as job design, leadership development, training and reward system received an equal impetus along with the traditional performance appraisal process in the new comprehensive and a much wider framework. Performance management is an ongoing communication process which is carried between the supervisors and the employees throughout the year. The process is very much cyclical and continuous in nature. Performance management is the current buzzword and is the need in the ongoing of cut-throat competition among individuals and organizations for leadership. It is a much broader and a complicated function of HR, as it encom-passes activities such as joint goal setting, continuous prog-ress review and frequent communication, feedback and coaching for improved performance, implementation of employee development programmes and rewarding achievements. The process of performance management starts

with the joining of a new incumbent in a system and ends when an employee quits the organization. Performance management can be regarded as a systematic process by which the overall performance of an organization can be improved by improving the performance of individuals within a team framework. It is a means for promoting supe-rior performance by communicating expectations, defining roles within a required competence framework and estab-lishing achievable benchmarks.A performance management system includes:• Developing clear job descriptions and employee perfor-

mance plans which includes the key result areas (KRA') and performance indicators.

• Selection of right set of people by implementing an appropriate selection process.

• Negotiating requirements and performance standards for measuring the outcome and overall productivity against the predefined benchmarks.

• Providing continuous coaching and feedback during the period of delivery of performance.

• Identifying the training and development needs by measuring the outcomes achieved against the set standards and implementing effective development programs for improvement.

• Holding quarterly performance development discussions and evaluating employee performance on the basis of performance plans.

• Designing effective compensation and reward systems for recognizing those employees who excel in their jobs by achieving the set standards in accordance with the perfor-mance plans or exceed the performance benchmarks.

• Providing promotional/career development support and guidance to the employees.

the result of this project. The beneficiaries of this project were the rural community in general including vehicle operators and farmers. However, women in the road impact areas also benefited from improved travel facilities particularly in the areas of education, health and other social amenities, increased household income for their families and improved quality of life. Moreover, this project also helped in improving the environment by eliminating hazards of dust clouds in dry seasons and muddy/ slippery road surfaces during rainy seasons and improving drainage through the installation of culverts and side drains. The construction of rural roads and their maintenance is very costly and very few governments in the developing countries have the financial means to undertake large construction projects in rural areas. In China, the com-munes mobilized their surplus manpower to build roads, although in overall terms, the transport sector remains a major bottleneck. Thus the decline in investment in farm to market roads in developing countries has been noted. Therefore, the governments which can not tackle it on their own need the help and assistance of international community. In Asia the issue has not received such intense attention. This is not to say that the problem is less apparent or real. In many of the countries of the region, rural road mainte-nance is conspicuous by its absence. Insufficient funds are allocated or even where funds are available they are gener-ally not applied within a planned maintenance framework. Rather the funds are used to correct major defects which have been caused by the absence of preventive mainte-nance. This is true not just statistically but also by personal experience of anyone who has travelled on rural roads in the region. The implications of this lack of maintenance are severe. Firstly, the enormous investments in capital assets that a country has placed in its rural road network sometime deteriorate faster than roads being rehabilitated. In the Philippines, for example, it is estimated that the annual loss in national capital assets is twice the budget that is required to maintain these assets. Secondly, rural roads play an important role in supporting the livelihood of population in rural areas. If they are not maintained then the number of the beneficiaries reduces rapidly over time and the economic and social benefits of proper access are lost. Thirdly, the rural roads are generally funded based on an economic analysis of both the reduction in transport costs and increase in production. Moreover, the analysis assumes a design life of the road based on an effective maintenance regime. If the latter is not in place then the analysis is meaningless. The yearly cost of maintaining a road is a small fraction of the investment cost, usually some 2-3% for a major paved road and 5-6% for an unpaved rural road. The economic logic for effective preventive maintenance is undeniable.In 1988 the World Bank produced a seminal work on road maintenance. The publication drew on detailed research and data of 85 countries. The publication was more focused on major highways and the paved road network than on rural roads. However, the conclusions were quite devastat-ing. They noted that in the 85 countries that received World

Bank assistance for roads, a quarter of the paved roads outside the urban areas needed reconstruction as did a third of the unpaved roads. Such reconstruction would cost US$ 40 to 45 billion which could have been avoided if less than $12 billion had been spent on preventive maintenance. They identified a series of technical, institu-tional and financial issues that had contributed to this parlous state of affairs. Since the publication of that document much more attention has been paid to road maintenance. However, a current assessment of the situa-tion in many countries in Asian region suggests that little has changed since the 1980s. In one respect, the situation has become worse. The investments in major highways are generally justified on pure economic grounds based on the reduction of the vehicle operating cost and thereby the cost to both the transporter and the end-user of goods being transported.Rural roads have a much wider benefit audience. Poor maintenance of rural roads leads to loss of access resulting not just of economic loss but also in terms of lower enrol-ment in schools, higher rates of infant, child, and maternal mortality and a general isolation from the mainstream of national development. In Pakistan the responsibility for farm to market roads has been given to local government bodies such as district councils and union councils etc. These bodies collect taxes which are sometimes supple-mented by grants from the federal/provincial government.The importance of the rural roads may not be overesti-mated in a country like Pakistan whose 21% of GDP comes from agriculture and two third of the country’s total population still lives in rural areas. Pakistan has the road network of about 258350 kilometers. This has increased only 12.5% from the network of 229595 km in 1996-97. Existing availability of the farm to market roads is 99881km. Rural development strategy included the provision of rural infrastructure including roads. Recently, a World Bank Report has noted that in Pakistan the underperformance of transport infrastructure costs the economy Rs. 300 billion per year. Paucity of resources has restrained the govern-ment in allocating the required resources for this sector. Thus, like many other developing countries, foreign assis-tance has becomes necessary to supplement the local resources especially in this respect. Asian Development Bank (ADB) has been involved in assisting the governments at federal and provincial levels in this sector. The Bank is of the view that while national and provincial roads are adequate in extent, though not in quality


• Performing exit interviews for understanding the cause of employee discontentment and thereafter exit from an organization.

Why Appraise Performance? The goal of the review process is to recognize achievement, to evaluate job progress, and then to design training for further devel-opment of skills and strengths. Periodic reviews help supervisors gain a better understanding of each employee's abilities. A careful review will stimulate employee’s interest and improve job performance. The review provides the employee, the supervisor, and Human Resources a critical, formal feedback mechanism on an annual basis.Annually, the concerned supervisor evaluates each employee’s performance. In the case where an employee has changed jobs part-way through the appraisal period, both of the employee’s supervisors during the appraisal period should submit an appraisal of the employee’s performance. During the performance evaluation process, the most recent job description on file with Human Resources will be reviewed and updated, if necessary, by both the employee and the supervisor.Employees are reviewed for a salary increase, annually. The amount of the salary increase pool of funds is recom-mended by the administration and approved by the Senior Management. The method for allocating funds is based on rewarding meritorious performance. Merit increases will be awarded on a pay-for-performance basis. A pay-for- perfor-mance structure achieves the goal of rewarding truly top performers with merit increases that match their achieve-ments and contributions. Performance Appraisal Process: A performance appraisal is a review and discussion of an employee's performance of assigned duties and responsibilities. The appraisal is based on results obtained by the employee in his/her job, not on the employee's personality character-istics. The appraisal measures skills and accomplish-ments with reasonable accuracy and uniformity. It provides a way to help identify areas for performance enhancement and to help promote professional growth. It should not, however, be considered the supervisor's only communication tool. Open lines of communication throughout the year help to make effective working relationships. Each employee is entitled to a thoughtful and careful appraisal. The success of the process depends on the supervisor's willingness to complete a constructive and objective appraisal and on the employee's willingness to respond to constructive suggestions and to work with the supervisor to reach future goals. Performance management is the systematic process by which an agency involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of agency mission and goals. Employee performance management includes:• Planning work and setting expectations,• Monitoring performance continually,• Developing the capacity to perform, • Rating performance periodically and • Rewarding good performance

Planning: The standardized requirements for planning employees' performance include establishing the elements and set of principles of performance appraisal plans. Performance elements and standards should be measur-able, understandable, verifiable, equitable, and achievable. Through critical elements, employees are held accountable as individuals for work assignments or responsibilities. Employee performance plans should be flexible so that they can be adjusted for changing program objectives and work requirements. When used effectively, these plans can be beneficial working documents that are discussed often, and not merely paperwork that is filed in a drawer and seen only when ratings of record are required.Monitoring: In an effective organization, assignments and projects are monitored continually. Monitoring well means consistently measuring performance and providing ongo-ing feedback to employees and work groups on their prog-ress toward reaching their goals. The requirements for monitoring performance include conducting progress reviews with employees where their performance is compared against their elements and standards. Ongoing monitoring provides the opportunity to check how well employees are meeting predetermined standards and to make changes to unrealistic or problematic standards. And by monitoring continually, unacceptable performance can be identified at any time during the appraisal period and assistance provided to address such performance rather than wait until the end of the period when summary rating levels are assigned.Developing: In an effective organization, employee develop-mental needs are evaluated and addressed. Developing in this instance means increasing the capacity to perform through training, giving assignments that introduce new skills or higher levels of responsibility, improving work processes, or other methods. Providing employees with training and developmental opportunities encourages good performance, strengthens job-related skills and competen-cies, and helps employees keep up with changes in the workplace, such as the introduction of new technology.Carrying out the processes of performance management provides an excellent opportunity to identify developmen-tal needs. During planning and monitoring of work, deficiencies in performance become evident and can be addressed. Areas for improving good performance also stand out, and action can be taken to help successful employees improve even further.Rating: Organizations need to know who their best perform-ers are. Within the context of formal performance appraisal

and service level, rural roads are both inadequate in extent and quality to serve the needs of rural areas. Thus its focus is primarily on the provincial networks, the components of which range from heavily trafficked multi-lane highways to remote rural access roads and in particular in improving the capabilities of the agencies that are responsible for the networks, both for human capital and regulatory frame-work. Although the World Bank focuses on the national highway system and is assisting in the establishment of a road fund, the ADB complements those efforts by assisting in the establishment of provincial road fund and selective interventions in the national highway system with the provincial emphasis. This strategy seeks to emphasize poverty reduction linkages, increase ownership, and focus on sector revenues and operation and maintenance expen-ditures. Although the viability of private sector involve-ment in development of arterial roads through BOT projects appears uncertain, the scope for private sector participation in construction and operation of rural roads, is also being explored. Japan also has accepted a request to fund the Rs 10 billion project for construction of about 3000 km farm to market roads in selected districts in four provinces in two phases through Japan Bank of International Cooperation. This is because Japan believes that lack of adequate and depend-able communication infrastructure is the biggest constraint in achieving the desired goals of development in the country and without such an infrastructure development can not proceed in any of the socio- economic sectors in the rural areas.The rains and floods during August and September 2011 damaged the transport and communication infrastructure in the provinces of Sindh and Baluchistan. Based on the data received on the damages in this sector a total of 5 districts in Baluchistan and 18 districts in Sindh were affected by the floods and longer than the usual spell and higher intensity of rains. It affected the network of national and provincial highways and district and municipal roads.

Damages to the road network were caused by submer-gence, high surface runoffs and ingress of water in road formation. About 1955 km of provincial highways in Sindh representing 15% of the provincial highway assets and 5773km of district roads including municipal and urban roads were affected. On the contrary, damages in Baluch-istan were lower and comprised about 426km or about 1% of road stock of provincial highways and district roads.Participatory poverty assessments have long identified remoteness and isolation as critical components of poverty. Although it is widely assumed that investments in rural roads reduce poverty, there is a little evidence of the ways in which these impacts occur or what their determinants are. The case studies of different Asian countries show that the poor and very poor benefited substantially from rural roads through access to state services as well as access of the services to the villages. However, economic benefits achieved were clearly different for different socio-economic groups. Careful consideration of economic determinants such as climate, agricultural potential, special position and proxim-ity to networks and world market commodity prices as well as social structure and concentration of assets would enable better assessment of the potential for poverty reduction through projects such as the ones for roads. Possible complementary measures could also be considered to increase positive impacts.Improvements to the primary village network of paths, tracks, culverts and access routes that reduce the burden of basic household and productive tasks as well as the increased availability of intermediate modes of transport with larger carrying capacity to collect water, firewood etc. are likely to have a greater initial impact on the wellbeing of the poor than improved availability of motorized transport services, which they do not or cannot afford to use. There-fore improving transport within a village is as important to the poor and very poor as providing access to market outside the village.


requirements, rating means evaluating employee or group performance against the elements and standards in an employee's performance plan and assigning a summary rating of record. The rating of record is assigned according to proce-dures included in the organization's appraisal program. It is based on work performed during an entire appraisal period. The rating of record has a bearing on various other personnel actions, such as granting within-grade pay increases and deter-mining additional retention service credit in a reduction in force. A descriptive list of Rating Factors may be referred as detailed in the foot-notes.Rewarding: Rewarding means recognizing employees, individu-ally and as members of groups, for their performance and acknowledging their contributions to the agency's mission. A basic principle of effective management is that all behavior is controlled by its consequences. Those consequences can and should be both formal and informal and both positive and negative. Good performance is recognized without waiting for nominations for formal awards to be solicited. Recognition is an ongoing, natural part of day-to-day experience. Nonethe-less, awards system provide a broad range of forms that more formal rewards can take, such as cash, time off, and many nonmonetary items that can be rewarded, from suggestions to group accomplishments.Managing Performance Effectively: In effective organizations, managers and employees have been practicing good perfor-mance management naturally all their lives, executing each key component process well. Goals are set and work is planned routinely. Progress toward those goals is measured and employ-ees get feedback. High standards are set, but care is also taken to develop the skills needed to reach them. Formal and infor-mal rewards are used to recognize the behavior and results that accomplish the mission. All five component processes working together and supporting each other achieve natural, effective performance management.Some Tips On How To Succeed In Your Next Performance: Annual performance reviews come just once a year, yet many employ-ees find themselves unprepared and quite anxious as they are called into their manager's office for their dreaded conversation about performance and compensation. A performance review doesn't have to send you into a stretch of anxiety. There are plenty of ways to ensure success in your next performance review. Here is a look at five ways you can ensure success in your next performance review. Perform a Self-Evaluation: Many companies require their employ-ees to complete a self-evaluation prior to receiving their annual performance review. A self-evaluation requires employees to identify their strengths and weaknesses in their current position. Self-evaluations often ask an employee to rate him- or herself on a scale and then provide additional details about his or her performance on the job. A self-evaluation is an excellent opportunity for employees to elaborate on any skills their employers may not know about, sum up the achieve-ments and struggles experienced throughout the year, and set realistic goals for next year. Don't be Defensive: Many people walk into an annual perfor-mance review with a defensive attitude. Rather than immediately preparing themselves, maintain a calm bearing, and be prepared to communicate openly with your manager. If you performed your job to the best of your ability, maintained a good rapport with your employer, you should walk into your performance review with confidence and a sense of irreplaceability. If your

manager has something negative or constructive to say, take it in stride, and take a mental note so that you know how to improve your performance in the future.Walk in with a Positive Attitude: Having a positive attitude can make a big difference when walking into a performance review. Ultimately, performance reviews identify areas where you can improve while targeting possible career advancement opportu-nities. Even if you receive constructive criticism, maintain a positive attitude. Constructive criticism identifies exactly what you need to do to succeed in your job. No one is perfect, and your performance review will identify how you can improve your job performance. Get Well-Prepared: Prior to attending your performance review, prepare yourself with some vital information such as your job description and responsibilities, any mid-year reviews and goals, a list of all of your accomplishments for the calendar year, and any other information that could be a speaking point during your conversation with your manager. By preparing yourself, you will be ready to answer any questions that management may have, and if anything in your review sounds incorrect, you will be ready to discuss it with your manager. Try Not to Focus on the Financial Aspect: Most people acknowl-edge that a vital aspect of a performance evaluation is learning whether or not an employee will receive a raise. While many employees would love to get right down to the financial details, most managers will want to review your performance first before discussing what your financial compensation will be. Rather than simply zeroing in on the compensation piece of your performance review, listen carefully to what your manager is saying, answer any questions that he or she may have, and handle the financial details at the end of your meeting.The Bottom Line: A performance review does not need to be a stress-inducing event; it is designed to identify strengths and weaknesses so that a realistic career goal can be set for the next year. Going into a performance review with a positive attitude and high level of confidence allows your meeting to flow smoothly, and you can learn how you can develop your skills and improve your strengths.A performance management process sets the platform for rewarding excellence by aligning individual employee accomplish-ments with the organization’s mission and objectives and making the employee and the organization understand the importance of a specific job in realizing outcomes. By establishing clear perfor-mance expectations which includes results, actions and behaviors, it helps the employees in understanding what exactly is expected out of their jobs and setting of standards help in eliminating those jobs which are of no use any longer. Through regular feedback and coaching, it provides an advantage of diagnosing the problems at an early stage and taking corrective actions.To conclude, performance management can be regarded as a proactive system of managing employee performance for driving the individuals and the organizations towards desired performance and results. It’s about striking a harmonious alignment between individual and organizational objectives for accomplishment of excellence in performance.If the true goal of the performance appraisal is employee development and organizational improvement, consider moving to a performance management system. Place the focus on what you really want to create in your organization - perfor-mance management and development. As part of that system, you will want to use a checklist to guide your participation in the performance management and development process. This


All available data and statistics indicate that as a result of both direct and indirect impacts of human activity, a sustained reduction in the mangrove cover along our coast is taking place,

leading to land erosion and reduced supply of bio-mass. Under threat – the precious mangrove ecosystemThe economic impor-tance of mangroves in Pakistan largely comes from the fishery resource that they harbor. An estimated 80% of the fish caught in coastal waters spend at least part of their life cycle as fry in the mangrove creeks, or depend on the food web within the mangrove ecosystem. Shrimp fishery is the major fish export of mangroves, accounting for 68% of the $100 million of the foreign exchange the country earns from fisheries exports. The mangrove swamps of the Sindh coastal zone are exten-sive, covering approximately 243,000 hectares (ha) com-pared with 7,400 ha along the Balochistan coast. The system is intersected by large and small creeks that allow tidal water to move into and out of the area during the twice-daily ebb and flow of the tides. The main species in the area is the black mangrove Avicennia marina, which has aerial roots growing up out of the mud. The man-grove swamps, bare mud flats, and mangrove creeks support many animals along the Sindh coast. Some species of birds also use the swamps as wintering grounds during their long distance migrations. The man-grove trees are used for firewood and building, while the mangrove green shoots and leaves are used as fodder for livestock, for medicinal purposes, and as food for the villagers in some cases. The 100,000 people living along the northern edge of the Indus Delta use an estimated 18,000 tons of mangrove firewood each year. At certain times of the year, about 16,000 camels are herded into the mangroves and left to browse for about 6 months. The creeks provide a source of shrimp and fish for the local village fisher folk working from small inshore boats. Bees that live in the mangroves and above the high tide level inland provide honey, which is a valuable marketed commodity. Mangrove swamp ecosystems face a number of threats, as they are an exploitable natural resource for the rural communities along the Pakistan coast. Man-made and natural impacts have degraded the mangroves. These include (i) construction of dams and barrages, (ii) fresh water diversion for irrigation, (iii) decrease in fresh water input and sediment load, and (iv) increased salinity.

The proposed interventionWhat however is a cause of even greater concern is that to redress this negative development, most of our efforts have been focused on planting more mangroves while neglecting the critical aspect of ‘threat removal’ itself. There is a need to seek and employ innovative solutions to tackle this challenge that can also be sustained. In this context, an opportunity provided by nature can be availed. Among the various environment friendly services that wetlands provide, is included its role as a “pollutant filter”. It is quite feasible to use the mangroves wherever available as ’pollutant filters’, by channeling the sewage generated in the coastal villages via the wetlands into the creeks/open sea. This feasibility is based on the concept of ‘Ecological Engineering’. Ecological engineering relies on nature’s ability to self-design a self-sustaining ecosys-tem. Humans only provide the initial conditions that collectively enhance the nature’s capability to develop within its bio-geochemical conditions. Other than ‘filter-ing’ the local sewage, this option offers many more benefits that can be listed as: • Increase in the fresh water availability in the coastal wetland

mixing zone through the release of treated sewage, thereby facilitating the growth of the wetland cover

Innovating for savingour coastal ecology

by Farhan Anwar

HEALTH & ENVIRONMENT

Arcata, California: An Ecological Engineering WetlandSewage Treatment System on Pacific West Cost of USA

This checklist can also be used to help you in a more traditional performance appraisal process.Footnotes:Performance Appraisal Rating FactorsThe following are samples of rating factors and example standards taken from a variety of sources. Some may overlap, and some may need to be expanded to include more descriptive and/or numerical measures. Please feel free to combine or modify them to fit your needs by cutting and pasting.• Adaptability: Efficiency with which employee works under

stress and responds to change. Demonstrates ability to modify behavioral style and approach to goal.

• Assertiveness/Motivation: Degree to which the employee pursues goals with commitment and takes pride in accom-plishment. Demonstrates self-confidence and positive attitude towards self and others

• Attendance: The extent to which the employee can be depended upon to be available for work and to fulfill position responsibilities.

• Communication: The extent, to which the employee effec-tively listens, conveys and receives ideas, information and direction. Assesses and takes steps to improve ability to communicate (written and verbal) so ideas and consultations are conveyed with precision and efficiency.

• Creativity: Extent to which employee generates workable and innovative ideas, concepts and techniques. Initiates new and creative ideas or procedures to enhance the department or organization.

• Customer Focus: The degree to which the employee takes the initiative to meet internal and external customer needs in a timely and courteous manner.

• Customer Service: Serves customers in a manner that increases their confidence and knowledge to resolve their own problems. Advises in a manner consistent with the complexity and nature of the customer's need.

• Dependability/Initiative: The extent to which an employee effectively and enthusiastically accomplishes assignments with minimal supervision. Demonstrates eagerness, positiv-ism and takes on new responsibilities.

• Job Knowledge: The demonstration of technical, administra-tive, managerial, supervisory, or other specialized knowledge required to perform the job. Consider the degree of job knowledge relative to length of time in the current position. Effectively learns new skills.

• Judgment: Ability to analyze problems or procedures, evaluate alternatives, and select best course of action. Obtains and evaluates pertinent information to determine source of and alternative solutions to problems.

• Initiative: The degree to which the employee independently performs and accomplishes assignments. Independently contributes ideas and projects.

• Interpersonal Relations: The degree to which the employee shows understanding and sensitivity to needs and problems of others. Works cooperatively and effectively with others to achieve unit goals

• Management Skills: Extent to which employee demonstrates effective management abilities and overall results. Effectively sets goals and establishes priorities.

• Planning & Organizing: The extent to which the employee plans, organizes and implements tasks or programs. Effec-tively manages tasks or program assignments including follow-through and delegation.

• Problem Solving & Decision Making: Degree to which employee demonstrates ability to clearly isolate, define and seek solutions to problem areas.. Effectively identifies & evalu-ates alternative solutions and flexible in modifying decisions.

• Productivity: Degree to which the employee produces the expected quality and quantity of assignments. Attains conclu-sive measurable results.

• Quality of Work: The ability to set high standards for own personal performance; strive for quality work; put forth extra effort to ensure quality work. Consistently delivers what is required when required

• Quantity of Work: The volume of work produced by the employee, along with his or her speed, accuracy and consis-tency of output. Accomplishes assigned work in an organized, timely manner

• Resourcefulness: Consider the degree to which employee is a source of supply and support to the department, customers, and/or the organization as a whole. Masters difficult situations in a timely and effective manner.

• Responsibility: The degree to which the employee demon-strates dependability in work performance. Completes work in a timely, capable and reliable manner

• Safety: Degree to which employee adheres to safety and health regulations. Maintains and observes safety and health standards.

• Stress Tolerance: Degree to which employee's performance demonstrates stability under time and/or interpersonal pressure and opposition. Demonstrates composure and good judgment in stressful situations.

• Time Management: The ability to adhere to one's responsibili-ties in a timely manner. Manages multiple tasks with accuracy and efficiency.

• Work Habits: The manner in which an employee conducts his or herself in the working environment. Demonstrates effec-tive time management skills.

• Teamwork: The degree to which the employee works well in a team setting. Interacts and exchanges idea, observes the abilities and ideas of fellow team members.

• Working with Others/Cooperation: Extent to which employee works cooperatively with customers, co-workers and the public. Recognizes strengths and limitations of self and others. Focuses on performance rather than personality in relating to others.

• Cost Effectiveness: Extent to which employee seeks best use of materials, equipment, and staff to maximize efficiency and effectiveness. Establishes budget and/or functions within the budget.

• Delegation & Supervisory Skills: The extent to which the employee shows the ability to effectively authorize work and supervise subordinates. Motivates employees to think and work independently. Recognizes individual capabilities and assigns work accordingly.

• Leadership: Consider the employee's ability to direct the operations, activity and performance of others. Creates environment that guides employees to accomplish unit and individual goals.

• Performance Appraisals: Degree to which employee prepares thorough and objective annual appraisals. Acknowledges good performance and discusses performance problems.

• Staff Development: Degree to which employee provides oppor-tunities to challenge subordinate's capabilities and develops the knowledge and skills necessary for career development. Identifies training programs to improve subordinate's performance.

• Nutrient/water recycling• Managing a trade off with the supply of alternative sources

of fuel-wood/fodder to the local community, thereby reducing their dependency on the threatened mangrove ecology

• Improving the quality of life of the local community with proper treatment/disposal of their sewage

Sindh Coastal Community Development Project, December 2006This vital ‘service’ provided by the mangrove ecology would itself create the momentum and desire for their preservation and sustained utilization.

Planning implementationHowever, the mangroves along our coastline are being cleared at an alarmingly rapid pace. Sufficiently dense mangrove cover is now only available across the coastline in the creek system. It can therefore be proposed to develop an ‘Eco-tone Wetland’, along the coastline. The sewage of one or group of villages can be collected and transferred to either existing wetlands or specially designed wetlands, where some species of indigenous sub-semi arid forest variety that can be used for fodder/fuel wood are seeded and planted. The sewage can be channeled sub-surface into the wetland to provide nutrients to the plantations and thus a unique combination of marine/terrestrial and natural/constructed ‘Eco-tone Wetland’, can be operated. ‘Eco-tones’, are zones of transition between adjacent ecological systems (e.g. prod-ucts of alternating dryness and wetness). They are areas of significant ground water-surface water exchange. Such an initiative can be launched in the Korangi creek in Karachi, for example in Rehri village that forms part of the Korangi Creek system of the Indus Delta that is rich in mangrove forestation with the main ecological resource of the area being the mangrove forests. The livelihood of almost the entire population is dependent on fishing and allied works. The local community finds direct dependence on the mangroves in the use of mangrove leaves as fodder for their domesticated animals and to a lesser extent for construction purposes. Indirect dependence can be related to the role of mangroves as nursery and feeding grounds of aquatic life, in particular shrimps, that constitute the most financially viable livelihood source for the local fishing community.Most of the mangrove plantations (Type – Avicennia marina) are found along the creek, across the main coastline. The major forms of pollution in the area relate to the waste discharges, both from the village and from the surrounding areas that are brought to the area at high tide. Along with domestic sewage, this discharge load also contains industrial waste from the adjoining Korangi/Landhi Industrial areas.

The implementation process would require development of channels, with the construction of appropriate treat-ment systems having proper hydraulic and engineering controls. In the proposed area for intervention, at places, it may not be possible to use inland mangroves as pollutant filters as most of the mangrove forestation is located across the coastal belt in the creek system and the transportation of the waste stream at such distance could pose logistical problems, increase the complexity of the project and make the whole exercise financially non-feasible due to cost magnification. However, sound and innovative, alternative options can be designed in consultation with local commu-nities. For example, other than using existing mangrove cover, wherever viable, specially designed wetlands can also be ‘created’ where some variety of fodder is seeded and planted. The sewage can be directed sub-surface into the wetland to provide nutrients to the fodder plantation and thus an artificial wetland can be created. The ‘Ecotone Wetland’, can be constructed above the high tide level and a combination of indigenous forest specie (fuel wood/fodder potential) would require to be planted. Some specie would be of a terrestrial nature while others of a marine nature, whose roots would be flushed by the treated sewage at low tide condition, at least twice a day. Communities participate and benefitA critical requirement would be of establishing a role and mechanism of local community as ‘environmental stew-ards’. The communities can be trained for the construction and management of the wetland system. This would include training for the monitoring of the ecological treat-ment and waste disposal processes. Thus, the community would be actively involved in the construction and moni-toring of the system.Key performance indicators that can be developed may include:• Biomass Production• Waste Load Reduction/Nutrient Recycling/Substance Sink• Water Quality (Effluent)• Alternative Supply of Fuel wood/Fodder To ensure the long term sustainability of the proposed inter-ventions, the local community can be specially trained in the principles of environmental stewardship and resource management as they apply specific to the proposed project. To assist the community in the effective and sustainable management of the wetland resource, comprehensive monitoring and evaluation schedules would need to be prepared.

Rehri Village, Korangi Creek, Karachi

Beaufort, South Carolina: An Ecological Engineering WetlandSewage treatment System on Atlantic East Cost of USA


he US administration has finally made several banks pay a lot for violating US regulations, and set a good example, but what isn’t yet clear is whether it has punished as severely the bureaucracy in its

administration whose negligence permitted these violations to go on, for years at a stretch. Some of the banking sector analysts think that these settlement costs were ‘trivial’ in terms of the banks’ book value. Indeed that is the case. At a news conference, Lanny Breure, head of the Justice Depart- ment’s criminal division, admitted that an out-right prosecu-tion of HSBC was considered but dropped due to its damag-ing impact on the bank’s viability, and thus on jobs and the US economy. What he avoided saying was that the action could send a dangerous message to global banks i.e. they must exit the US market. One thing is clear though: big (i.e. global banks) isn’t beautiful anymore.Two big banks–HSBC and Standard Chartered will pay $1.9 billion and $627 million respectively though their regulatory violations were similar because they involved booking US dollar denominated transactions for parties in Iran, Sudan, Libya and Burma. HSBC, payer of the highest penalty thus far, faced this situation for the third time in a decade due to lax controls. Regulators had issued directives for improving oversight in 2003 and in 2010. Now for a third time HSBC has been ordered by US authorities to improve its monitoring of suspicious transactions. Under a five-year agreement with the Justice Department HSBC has agreed to appoint an independent monitor to evaluate progress in improving its compliance, and as part of the overhaul of internal controls, has launched a global review of its “Know Your Customer” files, which will cost an estimated $700 million over the next five years. The files are designed to ensure that HSBC does not unwittingly act as a conduit for criminal funds.HSBC says that after receiving the 2003 and 2007 regula-tory warnings, during 2009-2011 it increased by over nine times its outlay on anti-money laundering systems, and wound up all suspect business relationships besides cutting cutback on bonuses for its executives. As evidence of its determination to change, it cited the hiring of Stuart Levey, former chief legal officer of the Treasury Department, in January 2011. Standard Chartered Bank will pay $100 million forgiven for violations alleged by the Federal Reserve Bank according to which it offered "inadequate and incomplete responses" to bank examiners, and provided insufficient oversight for the sanctions compliance program that it had to implement por-traying its inadequate concern for abiding by the regula-tory directives. Besides the above, the bank also had to enter into separate deferred prosecution agreements with Depart-ment of Justice, and the New York District Attorney under which it will pay $227 million in fines pertaining to violation of US regulations that the bank allegedly committed between

2001 and 2007. The US Treasury also entered into an agree-ment to withdraw allegations that the bank's London and Dubai offices violated US ‘country sanctions’, but agreed that $132 million worth of penalty in this regard formed a part of the bank's payment to Department of Justice. The federal-state settlements come several months after the bank had agreed to pay $340 million to resolve a case filed by the New York banking regulator. The bank will finally end up paying total $627 million in terms of regulatory fines.

The other major regulatory violation that many mega banks indulged in was the manipulation of the London Inter- bank Offer Rate (Libor)–the rate used by banks all over the world as the yardstick for fixing floating rates of interest on loans. On December 19, Union Bank of Switzerland (UBS) agreed to pay a $1.5 billion fine after admitting fraud and bribery in the rigging of global benchmark interest rates. In June 2012, Barclays was the first to admit its role in manipulating the Libor, and was fined $450 million – one third of the amount UBS will pay. The levy on UBS reflects that scope of its misconduct was far higher compared to that of Barclay’s. This settlement ended a torrid 18 months for UBS during which it lost $2.3 billion in a rogue trading scandal in its London office, underwent a management upheaval that led to thousands of job cuts. "We have to acknowledge that the behaviour of certain of our employees who were disciplined during this investigation....... is, and was unac-ceptable," said UBS CEO, Ermotti, adding that around 40 people had either left UBS or had been asked to leave. Earlier, UBS office in Japan had pleaded guilty to one count of fraud relating to manipulation of benchmark rates, including the Yen’s Libor rate. The probe high-lighted the criminal role played by a UBS trader, who "embarked on a coordinated campaign" to manipulate the Yen’s Libor rate. Britain’s Financial Services Authority said that UBS staff made "corrupt" payments to reward brokers for helping to manipulate the rates, expanding the scandal to include bribery. Separately, a court in Italy found UBS guilty of a fraud in mis-selling derivatives to the city of Milan. But in this fraud Deutsche Bank, JP Morgan and Depfa Bank too were found guilty of the same crime.

Since the proposal offers an integrated approach, no element of the ecosystem benefits or suffers at the cost of the other. As the state of the natural ecosystem improves, the community also benefits in a variety of ways. The major cause of diseases in such coastal communities is improper sanitation. The sanitary conditions of the area are anticipated to register a marked improvement as a result of the proper collection, transfer, treatment and disposal of the sewage generated in the area. This improvement should translate into better health for the residents and financial savings. Short-term improvement in the community’s financial condition can be anticipated as the locals find temporary work and employment in activities related to the develop-ment of the ‘Eco-tone Wetland’, a resource that would also provide the local community with an alternative and much more easily accessible source of fuel wood/fodder. This would reduce the levels of exploitation of the mangrove ecology. As the mangroves act as nurseries for a variety of aquatic life, of particular importance being the shrimps, the survival of the mangroves indirectly gets translated in financial benefits for the fishing community. Mangroves act as protective barriers for the coastline and prevent erosion of land, providing safety to the coastline, thus offering added benefits for the community that get translated both in environmental and economic terms. In the social sector, greater social mobility of the women would be facilitated by the project that could impact positively on the economics of the area. The project has sound potential for up scaling within the project area and replication in other coastal communities. Therefore, the

project can offer a good demonstration value and lessons learnt can be shared.Recreational potential of such sites can also be explored where the communities can act as ‘guides’ for tourists thus adding an alternative livelihood option for improving their financial status. Ensuring sustainabilityThe main tools and mechanisms employed for monitoring and evaluation of the performance indicators of the project would include sampling, measurements, surveying and assessment of the performance of the facility (waste collection/transfer system and the wetland). Periodic check/cleanup of the collection/septic tanks would need to be carried out and functioning of sewers monitored. Similarly, periodic monitoring and checks would require to be carried out to assess the state of the effluent quality, biomass production and bio-diversity. The growth of the forest would have to be monitored and at a later stage the public acceptability of the alternative fuel wood/fodder resource would be gauged. Community should be involved in the selection phase of the species that are to be planted so that proper usage is ensured. An effort would have to be made to evaluate impact of the use of the alternative fuel wood/fodder sources on the mangroves by monitoring and comparing the mangrove usage by the project area commu-nity before and after the project intervention. Use of historical data can be made and public surveys conducted to identify and quantify impact. Implementation of such a comprehensive monitoring and evaluation regime can assist in viable replication and upgrading of the proposed intervention.

Settlement with UBS prompted a political and public backlash against the standards in banking across EU and the US. Libor benchmarks are used for trillions of dollars worth of loans around the world. Tiny shifts in the Libor benefit dealers in complex products. Details of the settle-ment with Barclays showed traders brazenly exploiting the system. The controversy is expected to ensnare the other big lenders and spark civil lawsuits as well as possible criminal proceedings against individuals involved.According to an international investigation, dozens of UBS staff manipulated the Libor that is used to price trillions of dollars worth of loans across the world, in collusion with brokers and traders at other banks. The penalty UBS agreed with US, UK and Swiss authorities is the second largest ever imposed on a bank forcing the UBS CEO Sergio Ermotti to admit his deep regret over “this inappropriate and unethical behaviour. No amount of profit is more impor-tant than the reputation of this firm". Because Libor benchmark rates are used to price trillions of dollars worth of loans, tiny shifts in these rates benefit-ted banks by millions of dollars, and every dollar that a bank benefited from meant an equal loss to a bank, hedge fund or other investor on the other side of the transaction – raising the threat of civil lawsuits. "The big unknown factor is the civil litigations that could follow as a result," said the head of equities trading firm Fidelity Worldwide Investment, one of the biggest investors in UBS, and went on to add that "The issue for the shareholders is the challenge of pricing that risk in."In the US, civil litigations have been filed by a variety of the affected entities but it would be tough to establish what was the type of distortion in the Libor on a specific date, who stood to benefit therefrom and who lost and how much. In all cases, there will be entities that earned unfair profits, and they won’t be only banks and brokerage houses. Given the hardships involved in assembling the relevant facts to prove their case, chances are that only few of the large number of affected parties, especially millions of small borrowers – the lot that availed billions of dollars worth of consumer loans – will not succeed in proving the losses suffered by them on account of manipulation of the Libor. The other category of misconduct by banks was to disburse huge (often shamefully high) bonuses to their executives via accounts maintained in tax heavens. JP Morgan is one such outfit that is now heading for a settle-ment with the British government, but in this case, more than 2,000 employees of JP Morgan will pay GBP 500 million representing the taxes they avoided since JP Morgan paid their bonuses through a Trust located in the Jersey Island. Employees who opt not to pay their share in the settlement would pay higher taxes once they are paid their share in the assets of that Trust, which is now being liquidated. JP Morgan’s Trust in Jersey was set up primarily to help its employees avoid high rates of British income taxes. What is strange though is the fact that, according to Financial Times, this Trust was created 20 years ago, with full knowl-edge of the British authorities. What is yet to surface is when misuse of the Trust in violation of its approved mandate i.e. deposit of JP Morgan’s employee bonuses came into the knowledge of the British authorities but the

huge share of JP Morgan’s employees (GBP 2 billion) in the assets of the Trust reflects the fact that it was being used for this purpose for a number of years before being caught. Exposure of this likely reality will cause considerable embarrassment to British authorities and hurt the image of London as financial services’ center.Market analysts are of the opinion that the settlement terms are very generous because the ‘real’ tax liability could have been GBP 1 billion, the argument being based on the logic that Trust assets now repayable to JP Morgan staffers could exceeded GBP 2.0 billion. Assuming the standard tax rate of 40 percent on salary income in the highest bracket, recover- able tax penalty had to be close to GBP 1 billion. Coming at a time when British fiscal deficit is dangerously high, this profile of the settlement is being criticized pretty harshly.Paying bonuses into employee accounts in tax heavens was one of the many questionable practices rampant in financial services, practically everywhere. In countries with exchange controls (blocking transfer of such funds abroad), financial institutions having head offices abroad began retaining these funds in head offices. Domestic financial institutions began facing this problem during the last economic boom because, between 2004 and 2008, these institutions too began paying unbelievably high bonuses to their preferred employees; the challenge was how to hide these unexplainably high bonuses from the rest of their workforce.The route they adopted was to ask their executives to open bank accounts in other institutions wherein they were paid their bonuses. There were cases wherein CEOs were hired at remunerations that were ridiculously high by the prevailing standards. In these cases, these overly paid CEOs were advised to open their bank accounts in other institutions so that none in their own organization would know what they were being paid. This happened even in case of bank CEOs, and it went on for years. In some cases, even the regulatory conditions requiring the disclosure of the remu-neration and other benefits paid to the CEOs were violated to understate these benefits, reflecting on the quality of investigative work by external auditors who certified the institutions’ financial statements. But this trick failed; insid-ers exposed the truth.

UK’s financial sector is contractingBritain’s financial services sector – the sector that used to be the key provider of jobs to young graduates is contract-ing as shown by the figures of fresh job creation in November. As per Astbury Marsden, a firm that recruits staff for the UK’s financial services sector, just 1,790 fresh jobs were created, down from 2,670 in November 2011 and over 13,000 in the same month in 2007 i.e. just before the onset of the global recession. The drop in November 2012 “is, by far, the most dramatic slump we have seen over the last few years”, and it must be “a real wakeup call" said the firm’s Chief Operating Office Mark Cameron. Besides Astbury Marsden, Morgan McKinley, a recruit-ment consultancy reported creating only 2,079 new jobs in the financial services sector in November – i.e. 24 percent drop over November 2011. The number of professionals looking for jobs in the ‘City’–the nickname for London's financial sector–is at its lowest level since January 2004 (i.e. end of the last recession), said Morgan McKinley.

TRAINING & DEVELOPMENT

by Sohailuddin Alavi

eadership, especially in the organizational set-up, has been focus of interest of both academicians and practicing managers for a long time. Conventionally, leadership is a personality driven concept. Individu-

als are considered instrumental in bringing the difference in the lives of other people and organizations. The emerging concept of leadership, however, is that it is a culture of managing modern businesses, be it a commercial enterprise, public service institution or not-for-profit entity. Further-more, leadership has since long been considered a sub-system of management that deals with people in the workplace. This was perhaps because of the fact that the concept of leadership was originally derived from the field of politics. Consequently, it was defined as a variant of manag-ing or supervising subordinates per se and it became more of a status symbol to reflect position of individuals along the organizational echelons. Subjectivity and personification of the leaders became the focus of attention for most of the researchers as well as organizational managers. Ironically, all this led to coining of a new title for managers and supervi-sors as leaders but resulted in no synergy in the work place, for they remained narrowly confined to managing (controll- ing to be exact) people and their actions, respectively, which

although led to specific actions but the organizational impact was still missing. This was because of the fact that people and their actions were managed as an end in itself. For instance, the emerging performance culture in many organizations has only been effective in creating the façade. Real and sustainable benefits for the organization remain distant goals. Sub-prime mortgage tsunami in the US is a prominent example of such a scenario. Similarly, the change initiatives in Pakistani financial sector are no exception, as still the service standards are far from the expected. Like- wise, the yawning non-performing financial assets of banks in general are clear evidence to this fact. Many similar scenarios abound globally.Leadership in PerspectivePersonified leadership refers to dependence on a single person as the savior for all. This type of leadership can have many manifestations in the world of work in particular, and in the society in general. Most interesting one is Charismatic-leadership. These persons are considered to command strong follow-ership mainly because of their personality charisma: extra ordinary [inspirational] physical personality, humility, attire, etc., besides, amongst other personified leaders extraordinary achievers who enjoy leadership status such as philanthropists,

L

Leadership Revisited:A critical analysis


ackground: Simply speaking, country risk refers to the probability that changes in the business environ-ment in another country where you are doing business may adversely impact your operations or payments.

This risk may arise out of the economic, social or political condi-tions within the jurisdiction of the foreign country. For instance, deteriorating economic conditions or political and social unrest in a foreign country may have an adverse impact on the ability of a borrower in that country to fulfil his obligations. Country risk is not limited solely to an institution’s international lending operations; other balance sheet activities such as overseas investments, placements etc, and off balance sheet exposures such as letters of credit, guarantees/bonds, foreign exchange contracts etc., also contain country risk. This distinctive nature of country risk necessitates that sound country risk management should be a part of the risk management framework of institutions that engage in international activities. Types of Country Risk: Country risk may occur in different forms. The most common categories include:(a) Sovereign Risk. This denotes a foreign government’s capacity and willingness to fulfil its direct and indirect foreign currency obligations. A government’s capacity or willingness to repay may be affected by different reasons. For instance, one should remain alert on whether the repayment capacity


social workers, celebrities, public figures, etc. Stature-based leaders also avail of the status of leaders by default such as feudal lords and their descendents, political icons and their close aides. The stature-based leaders in particular are the ones who are known as born leaders, for they need not do much for becoming leaders. Another very significant type of personified leadership is of fabricated leaders. These are the individuals identified as potential leaders by an outsider group, which then promotes them as leaders and thereby leverages their leadership for accomplishing their specific agenda. Quite a few political leaders fall under this category. It is a common practice of established political parties around the world to continually fabricate new leaders, for this provides them perpetuity while conforming to the needs and expectations of change by the general public. Ironically, sometimes these fabricated leaders are installed by an external group as their instruments to intervene in the policies and decision making processes of another nation or organization, for gaining extraordinary advantage. Another conventional view of leadership is that it is an alternate to managing [manager]. Some, however, consider leading and managing as complimentary to each other meaning thereby that all managers are essentially leaders in one way or the other, for they lead people and manage their performances. As we look at leadership in this context it includes all sorts of personified leaderships, such as; social entrepreneurs, political icons, public admin-istrators, business executives, and teachers, etc. We find one commonality amongst all of them: they all lead people in a particular direction. This follows that leadership is about organizing, coaching, and motivating people in almost every walk of life. In nutshell, a typical personified leader is generally single person (probably the most favored follower of his or her predecessor-leader) above the rest. It is more of a status usually associated with one’s position within the organiza-tional echelons. Ironically, personified leader either has a self-proclaimed status or the one perceived by its followers. Moreover, personified leader has more of a people mobili-zation role. Theoretically, personified leader influences followers for optimal productivity. But in most of the situa-tions followers control the strings of the leader. Transformational leadership is rather an emerging concept. Here the leadership is referred to as organizational culture. It essentially focuses on organizational transformation. It follows that leadership in the emerging context is all about synergizing work groups [people], organizations, systems and the immediate environment, etc. Put it differently, leadership is about changing for better; implementing the change, and, acknowledging [celebrating] the accomplish-ments. Thus in comparison to the conventional perspec-tives, it is relatively more holistic in its scope and pragmatic in its implications. It considers leadership not as a position or personality but as an organizational culture that every individual must live by within his or her permeable domains and its implications are organization wide – strategic, operational and interpersonal. Leadership Concept RevisitedIn this backdrop, the need was felt to revisit leadership from a holistic perspective. This led to the initial point of departure from leaders as a personified concept to leader-ship as a process concept. Having said this, it was further

established that for a leadership, focus should shift from a singular people management to overall organizational management, which shall include strategic orientation, operational orientation and the people orientation. In other words, the leadership concept should encompass strategic, operational and people management as means to continu-ally reforming organizations. Secondly, it is imperative that the leadership process must replace conventional manage-ment processes at all levels, which provides basis for intro-ducing leadership as a superior work culture, where every individual demonstrates requisite leadership orientation irrespective of his or her location and status in the work organization. Thus in nutshell it advocates replacement of personified leaders with a wide spread leadership culture across the work organization.

Myths and RealitiesLeadership is no magic – it is a reality of modern management system geared to accomplishing in dynamic environmentsLeadership is not mundane people management – it is about continually reforming the enterprise performance and people achievements to newer heightsLeadership is no more a status – it is a process that exists at all levels in a successful enterpriseLeadership is not a choice – it is the key to sustaining the present and securing the futureLeadership effectiveness is no more person or posi-tion dependent – it is a complex function of competen-cies, roles, focus and interactions across the organization

Having said so, transformational leadership is a culture per se – set of shared values, habits, and behaviors of employ-ees across the organization. This leadership culture helps the organizations and the people to be creative in finding innovative solutions that help reduce response time to the changing patterns of business requirements of today; and, continually improve process efficiencies and people achievements paradigmatically. Thus, we can say, in the modern times “Leadership Culture” enhances the organiza-tional ability to transform itself (and the performance of people) to newer heights. Hence it is critical for success and sustainability in today’s fast improving world.The FrameworkTransformational-leadership-framework provides a realis-tic basis in the organizational setting for a systematic analysis of leadership as a process. To begin with, this framework proposes a conceptual paradigm shift from personified-leader to the leadership-culture. Hence, it envisages a much broader implication. Precisely, it is about leading the organization in entirety. Teaming up and interacting with people, however, is but one dimension to it. Strategic and operating dimensions are equally signifi-cant too. Transformational leadership promotes a culture of do-it-right. As one can observe, it acknowledges the significance of leadership competencies as the basis. But it rejects the concept of personified leader as advocated by the conventional theorists. In simple words, leadership is more of a way of working in an organization that every individual member should essentially subscribe to instead of searching for the right person who would come and lead [turn around] the organization.


its currency. The government may also decide to nationalize or expropriate foreign assets. Elements of Country Risk Assessment: Institutions are expected to have an effective country risk analysis process in place to assess the risk associated with each country in which they are conducting or planning to conduct business. The level of resources devoted to the process may vary depending on the size and sophistication of an institution’s international opera-tions. The results of country risk analysis should be integrated closely with the process of formulating marketing strategies, approving credits, assigning country risk ratings, setting country exposure limits and provisioning, etc.In assessing the risk of a country, institutions should consider both the quantitative and qualitative factors of that country, such as the size and structure of the country’s external debt, quality of the policy-making function, social and political stabil-ity and legal and regulatory environment of the country. Institutions may make use of internal and external sources for assessing country risk but they should conduct their own coun-try risk assessment instead of relying entirely on external assess-ment. The analysis, process and the level of resources devoted to it will depend upon the size of foreign exposure. However, such process should include effective oversight by the board of directors, adequate policies and procedures and other essential elements as set out in the following paragraphs:Oversight by the Board of Directors: It is the responsibility of the board to define the level of country risk the institution can undertake and to ensure that the institution has country risk management framework consistent with the level of institution’s cross border exposure. There should be well-defined policies and procedures for country risk management. Similarly, the senior management should ensure that the staff entrusted with the responsibility is capable of dealing with it and the managerial structure and resources devoted for country risk management are commensurate with the level of the institution’s overseas exposure.Policies and Procedures: The management of an institution is responsible for implementing sound, well-defined policies and procedures for managing country risks. Institutions (having significant cross border exposure) should have written policies and procedures for their country risk management. Generally, such policies/ procedures encompass following aspects:• the institution’s business strategy in cross-border activities;• the overall limits and sub-limits for cross-border exposures,

including the authority to approve these limits and exceptions, if any;

• the standards and criteria to be used to analyze the risk of particular countries;

• the authorized activities, investments, and instruments;• an internal rating system or external ratings (if the bank has

little cross border exposure and it is not feasible to institute an internal country risk rating mechanism).

• risk tolerance limits.• mechanism to monitor and report the institutions’ country

exposure for senior management and BOD’s review.To be effective, these polices should be communicated down the line to the concerned offices and staff. The policies should be approved by the board and subject to review semi-annually or more frequently, if the need arises.Country Exposure Reporting System: Each institution must have an effective, reliable system for capturing and catego-rizing the volume and nature of cross-border exposure, and a





Universal Leadership Skills“Power-to-Lead” is the foremost skill. It has a focus on individuals’ readiness to conduct him or herself in a leader-ship role and prepares the individual to face the strategic and day-to-day challenges with courage and hope. It has several dimensions, such as conviction, motivation, and moral integrity. “Empowerment” is the second competence in sequence. It also has focus on the individuals’ self-management ability. Its dimensions are: discipline, responsibility, and emotional power.“Horizon” is the next critical leadership competence. It has a focus on the individuals’ ability to see opportunities and challenges beyond the present and beyond the obvious. In other words it is an ability to understand the relationship between discrete present and cloudy future. It considers dimensions, like vision, focus, and sense of direction.“Social” competence is no less important. It has a focus on the individuals’ ability to work and interact with other people. Its dimensions include: team-player, role-model, moderator. “Management” competence refers to an individuals’ ability to control the business activity and/or process in an efficient and effective fashion. It has dimensions such as attention to details, systems thinking, and managing change. ConclusionPersonified leadership analysis was limiting the horizon of leadership development in organizational setup, particularly, primarily because personified leadership predominantly

assumes that leadership is an innate characteristic [leaders are born], sometimes explicitly and sometimes implicitly, hence it cannot be developed institutionally. Furthermore, it considers the relationship between leader’s personality and performance as that of “cause and effect” and totally ignores the leadership competencies and the context [transient dynamics] in which employees operate, such as vision and focus, attitude, style and skills and knowledge; and, the process, teamwork [group work], and the perme-able environment, respectively. Interestingly, the transformation leadership perspective has enabled rather pragmatic analysis of leadership scope and implications, yet the personified leadership perspec-tives still hold reasonable grounds when considered in conjunction with other factors as well but fail to do so as a solo factor, as was considered in the initial days. Trans-formational leadership, in fact, does not substitute but compliments the personified leadership perspective by broadening the scope of leadership analysis. It puts leadership at the centre instead of leader [or his personal-ity] as is the case of the former perspective. The signifi-cance of leaders’ personality, however, has shifted from physical to competency orientation such as; socio-moral values, integrity & honesty, behaviors and habits, and last but not the least, cognitive characteristics. It argues that organization’s and group’s effectiveness is a complex func-tion of leadership culture and the work context. Hence, the chances of success can be positively altered through institutional interventions, such as; by modifying leader-ship culture through training and development programs and reshaping the organizational context.


against the aggregate exposures to a particular country (i.e. on a country basis) after accounting for risk transfer and making specific provision against credit risk; and (b) to factor in an element of provision for country risk into specific provisioning for each individual exposure (i.e. on an individual obligor basis). Whichever approach is adopted, institutions should make sure that they have set aside adequate country risk provisions according to their assessment of the probability of losses arising from their cross-border exposures. The criteria for when to provide and how to calculate country risk provision should be specified in the institutions’ policies and procedures, which should also clearly indicate which party has the authority to decide the level of country risk provision. Stress Testing: Institutions should periodically stress test their foreign exposures and report the results to the board of directors and senior management. The testing should include, for example, an evaluation of the impact on an institution’s country risk exposures under different scenarios. The level of resources devoted to this effort should be commensurate with the signifi-cance of foreign exposures in the institution’s overall operations.Internal Controls and Audit: Country risk management process should have an adequate internal controls and that audit mechanisms are available to ensure that the information for senior management and the board to monitor compliance with country-risk policies and exposure limits is true and accurate The internal audit function, in addition to review of compliance with policies/procedures, should ensure the integrity of the reports/information prepared for senior management. As an example, the system of internal controls should ensure that the responsibilities of marketing and lending personnel are properly segregated from the responsibilities of personnel who analyze country risk, rate country risk, and set country limits.Supervisory Review: Taking into account the size and complex-ity of an institution’s cross-border exposures and other factors, the Central Bank will also evaluate the adequacy of an institution’s system to manage country risk and maintain provisions for such risk. On a case-by-case basis, it may require institutions to re-assess their country risk provisions if there are grounds to doubt whether their existing provisioning level is adequate.Risk mitigation strategies: There are several strategies that can help reduce a foreign company's risk profile. Here are a few of the more common ones:• Engage in open, competitive bidding, avoiding ‘fast track’

arrangements. Participation in the latter may invite the accusation that you have bribed local officials.

• Examine the political connections of your local partners carefully. Close association with the current regime may be advantageous now, but once key figures are removed from the political stage you could be in for some nasty surprises.

• Be a good corporate citizen, contributing to the host country's economy and culture with worthwhile public projects.

• Cultivate connections with public outside the industry in which the company operates. They may become very useful in a crisis.

• Do not limit your discussions to representatives of the national or local government. They may not necessarily be a good indicator of public opinion. Make a point of establish-ing an informal dialogue with local journalists, as well as human rights and environmentalist groups.

• The alternative - keeping a low profile - can make you appear secretive.

• Avoid enlisting home government support if the local authorities threaten to break agreements. Such a tactic is often

counter-productive, particularly if it is done publicly.Conclusion: Evaluating country risks is a crucial exercise when choosing sites for international business, particularly if invest-ment is to be undertaken. Certain risks can be managed through insurance, hedging and other types of financial planning, but several others cannot be controlled through such financial mechanisms. Some of these risks may be measured in a risk-return analysis, with some countries’ risks requiring higher returns to justify the higher risks. The study of country risks is also necessary in order to develop alternative scenarios.Changes in trade and investment agreements can substantially change the economic conditions under which a corporation operates. A notable example is China’s entry into the WTO, which will require the country to cut its tariffs significantly and to eliminate many of its restrictions on foreign ownership. Foreign corporations that invested in China prior to WTO membership may suddenly face much less expensive import competition; those required to accept a joint venture partnership with a state-owned enterprise will face competition from new foreign wholly owned subsidiaries. In managing country risks that involve linkages among various political and economic forces, a particu-larly helpful Web site is the Economist Intelligence Unit. The site offers analyses of broad categories of risk as well as risk exposure associated with specific types of investment.Managers should prepare themselves accordingly, with an analysis of interest rates and stock prices, the country’s balance of payments, projections of probable macroeconomic policies, and fiscal and current-account deficits. It is important to exam-ine alternative potential scenarios and projections, and assign probabilities to each scenario in order to determine the risks and rewards connected with particular business opportunities. Pricewaterhouse Coopers has developed an index that indicates how one may quantify the impact of country risks in terms of equivalent tax rates and rates of return.The events of September 11 and the subsequent conflicts have added another dimension to country risk. Specific plans for protection and exit must be based on an analysis of each country. In the context of globalization, the new economy and the chang-ing role of governments, the analysis and management of coun-try risks is now of paramount importance.Notes & Explanations:The variables of macroeconomic indicators:• GDP • GDP deflator • Public debt • Current Account Balance • Interest rates • Forex reserves • Exchange Rate (against the USD) • FDI Inflows • Unemployment • Political Risk Index (PRI)The Risk of default increases by: • deteriorating fiscal conditions • deep recession/depression • wars • political risk • social unrest • deflation • losing control over one’s sovereignty (including monetary policy and the ability to print its own money) References:Nath, H. K. (2008),”Country Risk Analysis: A Survey of the Quantitative Methods” Business Working Paper;Ribeiro, Renato D (2001), “Country Risk Analysis”, www.gwu.edu/~ibi/minerva/spring2001/renato,Saini, G. K. and Bates, P. S. (1984), “A Survey of the Quantitative Approaches to Country Risk Analysis” JBF,Teixeira, M. F., Klotzle, M. C. and Ness, W. L. (2008), “Determi-nant Factors of Emerging Markets Risk: A Studyof Specific Country Risk.” Universidad de los Andes School of Management, Bogota, D.C., Colombia,

BRIEFS

Sugar Export- SBP asks banks to process cases:The State Bank of Pakistan has advised all banks (Authorized Dealers in Foreign Exchange) to process the cases of sugar export. SBP’s Exchange Policy Depart-ment (EPD) has issued Circular Letter No. 09/EPD.1 (51)-Sugar – 2012 on December 4 according to which export of some 200,000 tons of sugar will be allowed against each E-Form on first come first served basis and without any quantity restriction. Sugar export by the individual sugar mill will be subject to receipt of a minimum 10 percent of total contract value as advance payment (evidenced by advance payment voucher, swift message and reporting schedule/credit advice) and exporter must ship the sugar within 60 days from the date of SBP approval or obtaining an irrevocable Letter of Credit 60 days maturity from the buyer.As per described criteria, banks will forward the requests of sugar mills along attested photo copies of contract, E-Form, irrevocable LC with 60 days maturity or advance payment voucher, swift message and reporting schedule /credit advice, as the case may be, for SBP approval. All requests would be addressed to the Director, Exchange Policy Department, State Bank of Pakistan, I.I. Chundrigar Road, Karachi and SBP will allow permission against each E-Form on first come first served basis. SBP has asked banks to send sugar export update to the Director, Exchange Policy Department, State Bank of Pakistan on daily basis. Incomplete requests will not be considered.

SBP extends Credit Guarantee Scheme:As per IH&SMEFD Circular Letter No. 14 of December 4, 2012, the State Bank of Pakistan has extended the scope of Credit Guarantee Scheme (CGS) by including Microfinance Banks (MFBs) as eligible Participating Financial Institutions (PFIs) in order to enable micro enterprises to benefit from this Scheme. Now MFBs would be able to loans from above Rs. 150,000 upto Rs. 500,000 to micro enterprises for a tenor not exceeding five years. The MFBs which have already obtained approval of SBP for undertaking ‘microenterprise’ lending as per AC&MFD Circular No. 02 dated March 16, 2012, can apply for alloca-tion of Credit Exposure Limits under the Credit Guarantee Scheme. Earlier, the CGS facility was open to commercial banks only.

SBP asks banks to facilitate public in exchanging demonetised Rs 5 note:The State Bank of Pakistan has asked all banks operating in

the country to issue necessary instructions to their branches to facilitate the general public in exchanging demonetized Rs 5 banknote by the end of December 2012. In a circular issued to the Presidents/Chief Executives of all commercial and microfinance banks, the SBP said that all banks should display posters/banners regarding the last date for the exchange of the demonetised ‘rupees five banknote’ at public counters and other visible places in and outside their branches.

SBP issues new guidelines for disclosure requirements:The State Bank of Pakistan (SBP) issued new guidelines for disclosure requirements in annual financial state-ments. SBP, referring to BSD Circular No 04 dated February 17, 2006, has said that it has been observed that Banks/DFIs are not complying with the disclosure requirements for preparation and reporting of annual audited financial statements, particularly when it comes to disclosing sub-head ''Others'' in various notes. The instruction will be applicable with immediate effect and all Banks/ DFIs have been advised to ensure meticulous compliance with the disclosure requirements.

FBR issues red alerts to block allegedly fake refunds:The Federal Board of Revenue’s Intel-ligence and Investigation wing has issued eight red alerts in two daays after suspicion of filing alleged fake invoices to obtain multi-million rupees refunds in just one specific Regional Taxpayer Office (RTO-I) Karachi.

Reduction on tax rate on sugar supplies- FBR circular set aside:The Lahore High Court has set aside a circular issued by Federal Board of Revenue (FBR) about reduction in the rate of input sales tax on local supplies of sugar. Declaring the impugned circular legally infirm/ incor-rect, the court held that the reduction in the rate of sales tax by 50 percent amounted to splitting the local supply into a 50 percent taxable and a 50 percent non-taxable supply. The court observed that the exemption granted under section 13(2) of the Sales Tax Act whereby the rate of sales tax was reduced on the local supply of sugar by petitioners implied that the entire local supply of sugar was taxable at the rate of 8 percent and was a taxable supply.” The situation in section 8(2) of the Act is totally different as if a registered person makes taxable and non-taxable supplies, only such proportion of input tax can be claimed that is attribut-able to taxable supplies in such a manner as is specified by the FBR.”

Regulatory Compliance




oad density is the ratio of the length of the country’s total road network to the country’s land area. The road network includes all roads in the country: motorways, highways, main or national

roads, secondary or regional roads and other urban and rural roads. The value for road density i.e. km of road per 100 sq km of land area in Pakistan is about 32.00. Sustained increase in growth needs massive supporting infrastructure. This may be seen from the fact that as Pakistan has failed to put in place the infrastructure the growth has shown an arbitrary pattern. A good year in between low growth periods often cames due to sudden and favorable climatic changes which resulted in good agricultural growth. One such example is 2003-04 when the country saw massive boost in GDP growth of around 8% but after that it started to decline sharply and in 2008-09 reached as low as around 2.5% against a provisioned growth rate of 8% for this year as per five year plan for 2005-10, because there was not enough energy, water and transport infrastructure in place to sustain a growth rate of 7-8%. This situation is worse in the case of agriculture. According to a Food and Agriculture Organization (FAO) report, ‘Lack of physical infrastructure such as roads, stores, refrigerated units, refrigerated transport and cargo services at airports limits the ability of the private sector in


BRIEFS

SECP notifies accounting rules draft for insurance companies:The SECP has notified draft of accounting rules and regulations for the Life and non-Life Insurance companies. The drafted revised accounting formats and regulations for published finan-cial statements and regulatory returns by insurance entities have been notified in the official gazette of Pakistan to elicit public and stakeholders comments. By issuing these accounting formats and regulations, the SECP, as the apex regulator, aimed to protect the interests of policy holders and promote the sound development of the insurance industry.

SECP imposes Rs 0.3 million penalty on MRA Securities:The Securities and Exchange Commission of Pakistan (SECP) has imposed a penalty of Rs 300,000 on MRA Securi-ties (Pvt) Limited, broker of Karachi Stock Exchange (KSE) for non-provision of record and miscalculation of Net Capital Balance (NCB). The violations came to the notice of SECP during the on-site inspection of the broker under Securities and Exchange Ordinance, 1969. The order passed by the SECP said, “The commission observed that the broker failed to provide complete information and documents to the inspection team.” The order said that it was further observed that NCB certificate submitted by the broker was overstated. During the course of inquiry the SECP officials were informed that the brokerage could not provide the relevant records as demanded by the regulator because of the law and order conditions in Karachi. The brokerage maintained that the relevant staff could not attend the offices as public trans-port was not available. However, the inquiry team in its report said that they noted the staff related to routine business could attend the office, whereas obtaining the soft copy of records did not require too much time or physical presence of the relevant staff. Apart from the fine, the broker was strongly advised to take immediate measures and put in place proper checks and procedures to eliminate the occurrence of such instances in future.

$500m OGDCL exchangeable bond, Govt asked to tap world markets after election: Financial Advisory Consortium (FAC), hired by the government for the launch of Oil and Gas Development Company Limited (OGDCL) exchangeable bonds with a transaction size of $500 million in the international capital markets, have recommended to the government to access international capital markets after general election with greater political certainty in the country. Issuances from high quality and repeat issuers have been cleared but there is still a significant backlog of deals. New equity issuances are primar-ily happening in markets where there is strong domestic bid such as Malaysia and Philippines. The Consortium comprising Citibank, JP Morgan, Credit Suisse and BMA Capital were appointed as joint bookrunners for the transaction.

SECP takes action against com-panies’ directors, auditors:The Securities and Exchange Commission of Pakistan (SECP) took regulatory and punitive actions against companies’ direc-tors and auditors to safeguard the interests of the investors. On the abuse of powers by directors of listed and non-listed companies, the SECP issued show-cause notices to 23 companies in the month of November. The irregularities pertained to unauthorised inter-corporate financing, provident fund, mis-statement of financial state-ments, improper circulation of financial statements and unauthorised utilisation of security deposits. In November, the enforcement department also allowed a listed company for issuance of preference shares that resulted into injection of capital of Rs. 2.4 billion in the corporate entity. Relax-ation was also allowed to another listed company from the requirements of Companies (Issue of Capital) Rules 1996. Four companies were found unable to organise their manda-tory Annual General Meetings in given schedule. They were directed to hold their overdue annual general meetings, while two companies were directed to issue addendum to the notice of annual general meeting/extra-ordinary general meeting. Meanwhile, a listed company was also allowed to change the place of its annual general meeting.

SECP forms body for microin-surance:The Securities and Exchange Commission of Pakistan (SECP) announced the constitution of a Working Group to recommend the regulatory framework for microinsurance, in line with best international practices, backed by technology-based solutions and addressing the issues of capacity building of stakeholders. The SECP has been working proactively with the stakeholders to promote microinsurance through various policy reforms and supporting various initiatives.

SECP imposes Rs1m fine on PPPFTCL:The Securities and Exchange Commission of Pakistan has levied a fine of Rs1 million on Pakistan Petroleum Provi-dent Fund Trust Company (Pvt.) Limited for insider trading. Further, the Pakistan Petroleum Limited official found to have leaked the information regarding the company’s upcoming financials has also been fined Rs500,000. Accord-ing to the SECP notice, the trading data of the Karachi Stock Exchange between August 07, 2012 and August 09, 2012 showed that Pakistan Petroleum Limited Senior Provi-dent Fund managed by PPPFTCL bought 662,500 shares of PPL a few days prior to the announcement of PPL’s finan-cial results for the year ended June 30, 2012. The matter was taken up with PPL and show-cause notices were issued to both the PPPFTCL and the employees of PPL suspected of insider trading. Meanwhile, the SECP discovered that PPL CFO Kamran Wahab Khan was also a member of the PPPFTCL Investment Committee.


the result of this project. The beneficiaries of this project were the rural community in general including vehicle operators and farmers. However, women in the road impact areas also benefited from improved travel facilities particularly in the areas of education, health and other social amenities, increased household income for their families and improved quality of life. Moreover, this project also helped in improving the environment by eliminating hazards of dust clouds in dry seasons and muddy/ slippery road surfaces during rainy seasons and improving drainage through the installation of culverts and side drains. The construction of rural roads and their maintenance is very costly and very few governments in the developing countries have the financial means to undertake large construction projects in rural areas. In China, the com-munes mobilized their surplus manpower to build roads, although in overall terms, the transport sector remains a major bottleneck. Thus the decline in investment in farm to market roads in developing countries has been noted. Therefore, the governments which can not tackle it on their own need the help and assistance of international community. In Asia the issue has not received such intense attention. This is not to say that the problem is less apparent or real. In many of the countries of the region, rural road mainte-nance is conspicuous by its absence. Insufficient funds are allocated or even where funds are available they are gener-ally not applied within a planned maintenance framework. Rather the funds are used to correct major defects which have been caused by the absence of preventive mainte-nance. This is true not just statistically but also by personal experience of anyone who has travelled on rural roads in the region. The implications of this lack of maintenance are severe. Firstly, the enormous investments in capital assets that a country has placed in its rural road network sometime deteriorate faster than roads being rehabilitated. In the Philippines, for example, it is estimated that the annual loss in national capital assets is twice the budget that is required to maintain these assets. Secondly, rural roads play an important role in supporting the livelihood of population in rural areas. If they are not maintained then the number of the beneficiaries reduces rapidly over time and the economic and social benefits of proper access are lost. Thirdly, the rural roads are generally funded based on an economic analysis of both the reduction in transport costs and increase in production. Moreover, the analysis assumes a design life of the road based on an effective maintenance regime. If the latter is not in place then the analysis is meaningless. The yearly cost of maintaining a road is a small fraction of the investment cost, usually some 2-3% for a major paved road and 5-6% for an unpaved rural road. The economic logic for effective preventive maintenance is undeniable.In 1988 the World Bank produced a seminal work on road maintenance. The publication drew on detailed research and data of 85 countries. The publication was more focused on major highways and the paved road network than on rural roads. However, the conclusions were quite devastat-ing. They noted that in the 85 countries that received World


for the Indian side with $1.54 billion exports and imports at $400 million. The recent official figure between April-October 2012 places exports at $834 million exhibiting a growth of about 1 percent while imports during the same period increased to $333 million showing a jump of 42 percent over the corresponding period in 2011. Ajay Sahai, Director General and CEO of FIEO suggested that India and Pakistan should give preference to compa-nies in each other’s countries for exports and imports if products could be supplied at competitive prices. For example, he said, sugar can be exported from Pakistan to India which would help in softening sugar prices in the country while petroleum exporters from India could reduce the price of petroleum products in Pakistan by $14 per barrel giving a saving close to $2 billion for its economy. Three agreements viz-a-viz Customs Cooperation, Agree-ment on Mutual Recognition and Redressal of Grievances were signed which would be implemented after completion of all legal formalities to streamline bilateral trade.

n Indian multi-product showcase, “India Expo 2012”, was held at Karachi Expo Centre during 21-23 December, where Indian companies exhibited their goods from diverse sectors.

Federation of Indian Export Organisations (FIEO) and Karachi Chamber of Commerce and Industry (KCCI) were the main organisers of the three-day event. 47 renowned Indian brands encompassing Engineering & Construction sector: diesel engines, pumping sets, generators, wind solar hybrid system, LED lamps, wind turbines, solar lanterns, home lighting, welding electrodes, flux core wires, Office & School Stationary: hologram labels, paper & paper prod-ucts, holographic pouches, duplex boards, stickers & labels, Agri & Food products: spices, oil seeds, ghee, skimmed milk powder, dairy products, chick peas, pulses, beans, seeds, rubber, coconut, nuts, Pharmaceutical & Chemical Products: homoeopathic & unani, allopathic, ayurvedic, leather chemicals, textile pigments, organic chemicals, Textile & Accessories: denim, dyed fabrics, shirting fabrics, exhibiting in the INDIA Expo 2012. garments, sarees, grey fabric, readymade garments, fashion and imitation jewel-lery, cosmetics, etc. were exhibited.A 65- member Indian trade and business delegation headed by Rafeeque Ahmed, President FIEO attended the event. Siraj Kassam Teli, Chairman, Businessmen Group of KCCI, while inaugurating the event underlined the need to create new Indo-Pak trade synergies for economic integration. According to him, once Indo-Pak business executes in real sense, both countries would become free from dependence on other countries for economic cooperation. Indo-Pak trade nexus will also activate intra-South Asian Association for Regional Cooperation (SAARC) tradeIndian businessmen emphasized that political relations should not affect the positive business developments between business communities of the two countries. Positive develop-ments should not slow down and businesses should not suffer, they asserted.Expressing the hope that the Indo-Pak business communi-ties would fairly and sincerely entertain each other, they observed that the pace of economic growth in South Asia was slow and intra-regional trade in SAARC block was very nominal as compared to ASEAN and European Union.The head of the Indian delegation, Rafeeque Ahmed, said that ‘India Expo 2012’ was only the beginning of a long journey between FIEO and KCCI. He said that FIEO was an apex trade promotion body set up by Ministry of Com-merce to promote international trade having more than 14 offices in India and organised more than 50 international exhibitions across the globe. India-Pakistan bilateral trade for 2011-12 is estimated to yield around $2 billion. The balance of trade is favourable

A

India Expo2012

EVENTS


and service level, rural roads are both inadequate in extent and quality to serve the needs of rural areas. Thus its focus is primarily on the provincial networks, the components of which range from heavily trafficked multi-lane highways to remote rural access roads and in particular in improving the capabilities of the agencies that are responsible for the networks, both for human capital and regulatory frame-work. Although the World Bank focuses on the national highway system and is assisting in the establishment of a road fund, the ADB complements those efforts by assisting in the establishment of provincial road fund and selective interventions in the national highway system with the provincial emphasis. This strategy seeks to emphasize poverty reduction linkages, increase ownership, and focus on sector revenues and operation and maintenance expen-ditures. Although the viability of private sector involve-ment in development of arterial roads through BOT projects appears uncertain, the scope for private sector participation in construction and operation of rural roads, is also being explored. Japan also has accepted a request to fund the Rs 10 billion project for construction of about 3000 km farm to market roads in selected districts in four provinces in two phases through Japan Bank of International Cooperation. This is because Japan believes that lack of adequate and depend-able communication infrastructure is the biggest constraint in achieving the desired goals of development in the country and without such an infrastructure development can not proceed in any of the socio- economic sectors in the rural areas.The rains and floods during August and September 2011 damaged the transport and communication infrastructure in the provinces of Sindh and Baluchistan. Based on the data received on the damages in this sector a total of 5 districts in Baluchistan and 18 districts in Sindh were affected by the floods and longer than the usual spell and higher intensity of rains. It affected the network of national and provincial highways and district and municipal roads.

Damages to the road network were caused by submer-gence, high surface runoffs and ingress of water in road formation. About 1955 km of provincial highways in Sindh representing 15% of the provincial highway assets and 5773km of district roads including municipal and urban roads were affected. On the contrary, damages in Baluch-istan were lower and comprised about 426km or about 1% of road stock of provincial highways and district roads.Participatory poverty assessments have long identified remoteness and isolation as critical components of poverty. Although it is widely assumed that investments in rural roads reduce poverty, there is a little evidence of the ways in which these impacts occur or what their determinants are. The case studies of different Asian countries show that the poor and very poor benefited substantially from rural roads through access to state services as well as access of the services to the villages. However, economic benefits achieved were clearly different for different socio-economic groups. Careful consideration of economic determinants such as climate, agricultural potential, special position and proxim-ity to networks and world market commodity prices as well as social structure and concentration of assets would enable better assessment of the potential for poverty reduction through projects such as the ones for roads. Possible complementary measures could also be considered to increase positive impacts.Improvements to the primary village network of paths, tracks, culverts and access routes that reduce the burden of basic household and productive tasks as well as the increased availability of intermediate modes of transport with larger carrying capacity to collect water, firewood etc. are likely to have a greater initial impact on the wellbeing of the poor than improved availability of motorized transport services, which they do not or cannot afford to use. There-fore improving transport within a village is as important to the poor and very poor as providing access to market outside the village.

More than 30 international publishers from USA, India, Iran, Singapore, Saudi Arabia, Germany, England and UAE exhibited their books and literature at eighth Karachi Interna-

tional Book Fair 2012, held during 6-10 December at the Karachi Expo Centre. The Book Fair was organised by the Pakistan Publishers and Booksellers Association (PPBA) in association with National Book Foundation.

the fair. Literary heavyweights, including Mehtab Akbar Rashdi, Prof. Salim Mughal and Dr Nawaz Ali Shoq also attended the event. The book fair proved to be a positive platform for international book publishers to meet with Pakistan's industry specialists and explore business oppor-tunities in this market.

The event brought 180 publishing and distribution houses together with domestic and international publishers, book-sellers, librarians and institutional customers. Thousands of wide varieties of books were displayed at 300 stalls. National Book Foundation, Ministry of Education, Gov-ernment of Sindh extended its full support in making the event a great success and serve as an aid to promote literacy in the country. Around 300,000 people, books lovers, students from all groups of ages, professionals from all walks of life, academicians, writers, librarians and general public attended the book fair. Karachi University’s Shah Abdul Latif Chair inaugurated the Shah jo Risalo ‘Ganj’ at

Karachi InternationalBook Fair

Hamdard Village School winsInter-school Football Championship

EVENTS

Hamdard Village School, Karachi has won 14th Shaheed Hakim Mohammad Saeed Inter-School Football Championship by 2–0 against Hamdard Public School, Karachi in final match

played on December 20, 2012 at Bilawal Stadium, Madinat al Hikmah, Karachi. Sadia Rashid, Chancellor, Hamdard University & President, Hamdard Foundation Pakistan gave away the trophy to Hamdard Village School's winning Captain Mohammad Shoaib. Sajid Mehmood, Principal, Behria College and eminent social worker and former U.C.Nazim, Latif Rind were also present on the occasion.


ll available data and statistics indicate that as a result of both direct and indirect impacts of human activity, a sustained reduction in the mangrove cover along our coast is taking place,

leading to land erosion and reduced supply of bio-mass. Under threat – the precious mangrove ecosystemThe economic impor-tance of mangroves in Pakistan largely comes from the fishery resource that they harbor. An estimated 80% of the fish caught in coastal waters spend at least part of their life cycle as fry in the mangrove creeks, or depend on the food web within the mangrove ecosystem. Shrimp fishery is the major fish export of mangroves, accounting for 68% of the $100 million of the foreign exchange the country earns from fisheries exports. The mangrove swamps of the Sindh coastal zone are exten-sive, covering approximately 243,000 hectares (ha) com-pared with 7,400 ha along the Balochistan coast. The system is intersected by large and small creeks that allow tidal water to move into and out of the area during the twice-daily ebb and flow of the tides. The main species in the area is the black mangrove Avicennia marina, which has aerial roots growing up out of the mud. The man-grove swamps, bare mud flats, and mangrove creeks support many animals along the Sindh coast. Some species of birds also use the swamps as wintering grounds during their long distance migrations. The man-grove trees are used for firewood and building, while the mangrove green shoots and leaves are used as fodder for livestock, for medicinal purposes, and as food for the villagers in some cases. The 100,000 people living along the northern edge of the Indus Delta use an estimated 18,000 tons of mangrove firewood each year. At certain times of the year, about 16,000 camels are herded into the mangroves and left to browse for about 6 months. The creeks provide a source of shrimp and fish for the local village fisher folk working from small inshore boats. Bees that live in the mangroves and above the high tide level inland provide honey, which is a valuable marketed commodity. Mangrove swamp ecosystems face a number of threats, as they are an exploitable natural resource for the rural communities along the Pakistan coast. Man-made and natural impacts have degraded the mangroves. These include (i) construction of dams and barrages, (ii) fresh water diversion for irrigation, (iii) decrease in fresh water input and sediment load, and (iv) increased salinity.

The proposed interventionWhat however is a cause of even greater concern is that to redress this negative development, most of our efforts have been focused on planting more mangroves while neglecting the critical aspect of ‘threat removal’ itself. There is a need to seek and employ innovative solutions to tackle this challenge that can also be sustained. In this context, an opportunity provided by nature can be availed. Among the various environment friendly services that wetlands provide, is included its role as a “pollutant filter”. It is quite feasible to use the mangroves wherever available as ’pollutant filters’, by channeling the sewage generated in the coastal villages via the wetlands into the creeks/open sea. This feasibility is based on the concept of ‘Ecological Engineering’. Ecological engineering relies on nature’s ability to self-design a self-sustaining ecosys-tem. Humans only provide the initial conditions that collectively enhance the nature’s capability to develop within its bio-geochemical conditions. Other than ‘filter-ing’ the local sewage, this option offers many more benefits that can be listed as: • Increase in the fresh water availability in the coastal wetland

mixing zone through the release of treated sewage, thereby facilitating the growth of the wetland cover

SCIENCE & TECHNOLOGY

NASA crashed two satellites on the moon

NASA develops lighter & flexible space suits

World's longest high-speed rail line

A

he NASA has developed a new lightweight flexible space suit, infused with oxygen supplying and carbon dioxide removing mechanisms, for its future advanced space missions. The technologically-equipped one-piece suit named ‘Z-1 Proto-

type Spacesuit and Portable Life Support System (PLSS) 2.0’ is specially designed to protect the astronaut from extreme temperatures, which might prove beneficial in NASA’s future trips to Mars. The suit also features shoulder joints for increased manoeuvrability and a larger bubble helmet which will offer the astronaut a better and bigger view.Additionally, the suit’s back has a life support pack, which would enable the astronaut to attach himself to the spacecraft. Coated with layers of urethane, nylon and polyester, the suit is equipped to maintain pressure and allows flexibility of limbs and torso. The suit is packed with a water membrane evaporation cooler, which works in the same method as sweating and hence can cool off the outfit quickly. After conducting a series of efficiency tests, NASA might start using the new suit by 2015.

hina launched the world's longest high-speed rail line in 26 December, when a link between Beijing and the southern metropolis of Guangzhou is inaugu-rated underscoring its commitment to a trouble-plagued transport scheme. The opening of the 2,298-kilometre (1,425-mile) line between Beijing and

Guangzhou means passengers will travel from the capital to the southern commercial hub in just eight hours, compared with the 22 hours previously. The train departing Beijing travelled at an average speed of 300 kilometres per hour and made stops in four cities - Shijiazhuang, Zhengzhou, Wuhan on the Yangtze River and Changsha - before arriving in Guangzhou. China now operates 9,300 kilometres of high-speed railways. China is eventually planning to expand this railway system up to Russia and down to Southeast Asia. China has relied on technology transfers from foreign companies, including France's Alstom, Germany's Siemens and Japan's Kawasaki Heavy Industries, to develop its high-speed network. But the country is now seeking to capitalise on what it has learned and has been building high-speed rail networks in countries such as Turkey and Venezuela. The China News Service said the major type of train running on the Beijing-Guangzhou high-speed route is produced by state-owned China CNR Corp, headquartered in Beijing and founded in June 2008.

T

C

pair of NASA moon-mapping probe satellites ‘Ebb’ and ‘Flow’ deliberately smashed themselves into a mountain near the Moon's north pole ending a one-year mission during which they had taken images that will allow scien-

tists to better understand the internal lunar structure. Out of fuel and edging closer to the lunar surface, the probes were commanded to smash themselves avoiding a chance encounter with any Apollo or other relics left on the surface during previous expeditions. During their work life the probes took more than 115,000 images of the lunar surface, generating the highest resolution gravity map ever gathered from a celestial body. In a precision maneuver, 50 minutes before impact the pair of spacecraft fired their engines until they had burned up all their remaining fuel. The impact site, on the southern face of a mountain near the crater Goldschmidt, was dubbed Sally Ride, a tribute to the astronaut who was the first U.S. woman to go into space and who died last July at age 61 from cancer.


• Nutrient/water recycling• Managing a trade off with the supply of alternative sources

of fuel-wood/fodder to the local community, thereby reducing their dependency on the threatened mangrove ecology

• Improving the quality of life of the local community with proper treatment/disposal of their sewage

Sindh Coastal Community Development Project, December 2006This vital ‘service’ provided by the mangrove ecology would itself create the momentum and desire for their preservation and sustained utilization.

Planning implementationHowever, the mangroves along our coastline are being cleared at an alarmingly rapid pace. Sufficiently dense mangrove cover is now only available across the coastline in the creek system. It can therefore be proposed to develop an ‘Eco-tone Wetland’, along the coastline. The sewage of one or group of villages can be collected and transferred to either existing wetlands or specially designed wetlands, where some species of indigenous sub-semi arid forest variety that can be used for fodder/fuel wood are seeded and planted. The sewage can be channeled sub-surface into the wetland to provide nutrients to the plantations and thus a unique combination of marine/terrestrial and natural/constructed ‘Eco-tone Wetland’, can be operated. ‘Eco-tones’, are zones of transition between adjacent ecological systems (e.g. prod-ucts of alternating dryness and wetness). They are areas of significant ground water-surface water exchange. Such an initiative can be launched in the Korangi creek in Karachi, for example in Rehri village that forms part of the Korangi Creek system of the Indus Delta that is rich in mangrove forestation with the main ecological resource of the area being the mangrove forests. The livelihood of almost the entire population is dependent on fishing and allied works. The local community finds direct dependence on the mangroves in the use of mangrove leaves as fodder for their domesticated animals and to a lesser extent for construction purposes. Indirect dependence can be related to the role of mangroves as nursery and feeding grounds of aquatic life, in particular shrimps, that constitute the most financially viable livelihood source for the local fishing community.Most of the mangrove plantations (Type – Avicennia marina) are found along the creek, across the main coastline. The major forms of pollution in the area relate to the waste discharges, both from the village and from the surrounding areas that are brought to the area at high tide. Along with domestic sewage, this discharge load also contains industrial waste from the adjoining Korangi/Landhi Industrial areas.

The implementation process would require development of channels, with the construction of appropriate treat-ment systems having proper hydraulic and engineering controls. In the proposed area for intervention, at places, it may not be possible to use inland mangroves as pollutant filters as most of the mangrove forestation is located across the coastal belt in the creek system and the transportation of the waste stream at such distance could pose logistical problems, increase the complexity of the project and make the whole exercise financially non-feasible due to cost magnification. However, sound and innovative, alternative options can be designed in consultation with local commu-nities. For example, other than using existing mangrove cover, wherever viable, specially designed wetlands can also be ‘created’ where some variety of fodder is seeded and planted. The sewage can be directed sub-surface into the wetland to provide nutrients to the fodder plantation and thus an artificial wetland can be created. The ‘Ecotone Wetland’, can be constructed above the high tide level and a combination of indigenous forest specie (fuel wood/fodder potential) would require to be planted. Some specie would be of a terrestrial nature while others of a marine nature, whose roots would be flushed by the treated sewage at low tide condition, at least twice a day. Communities participate and benefitA critical requirement would be of establishing a role and mechanism of local community as ‘environmental stew-ards’. The communities can be trained for the construction and management of the wetland system. This would include training for the monitoring of the ecological treat-ment and waste disposal processes. Thus, the community would be actively involved in the construction and moni-toring of the system.Key performance indicators that can be developed may include:• Biomass Production• Waste Load Reduction/Nutrient Recycling/Substance Sink• Water Quality (Effluent)• Alternative Supply of Fuel wood/Fodder To ensure the long term sustainability of the proposed inter-ventions, the local community can be specially trained in the principles of environmental stewardship and resource management as they apply specific to the proposed project. To assist the community in the effective and sustainable management of the wetland resource, comprehensive monitoring and evaluation schedules would need to be prepared.

New type of nerve cell in the brain

Bats: clues to disease resistance found

New way to restore eyesight

DISCOVERY

S

new biological paper by the research of Chinese and Australian biologists published in the journal “Science” provided an insight into the evolution of the bat's flight, resistance to viruses, and relatively long life.

The Bat Pack, a team of researchers at the Australian Animal Health Laboratory (AAHL) in Geelong, in collaboration with the Beijing Genome Institute, conducted a wide range of research into bats and bat borne viruses, and their potential effects on the human popula-tion, as well as differences between DNA of bats and humans. They are sequencing the genomes of two bat species -- the Black Flying Fox, an Australian mega bat, and the David's Myotis, a Chinese micro bat. Once the genomes were sequenced, they compared them to the genomes of other mammals, including humans, to find where the similarities and differences lay. Research found that bats have developed some novel genes to deal with the toxins. Some of these genes, including P53, are implicated in the development of cancer or the detection and repair of damaged DNA.

ritish Stem cell researchers from the University of Sheffield, UK, have found a better and a cheaper way to restore human sight by implanting a contact lens containing stem cells that will repair the human cornea. Scientists found that the biodegrad-

able implant disc's stem cells will multiply in the eye, thus rebuilding the transparent layer on the front of the eye, known as the cornea, which degradation is one of the major causes of blindness in the world, a study published in Acta Biomaterialia journal revealed.Since stem cells have the ability to renew themselves through mitotic cell division and differentiation into a diverse range of specialized cell types, scientists hope that it will allow the eye to heal naturally as new implants are designed to form thin membranes by grafting the cells onto the eye itself.What makes the new research different is that the new biodegradable lens contains small pockets of stem cells that protect them and serve as a constant repair utility. According to Ílida Ortega Asencio, from University of Sheffield, The material across the center of the disc is thinner, so it will biodegrade more quickly, allowing the stem cells to proliferate across the surface of the eye to repair the cornea. With-out stem cells, thick white scar tissue develops in the cornea, causing partial or complete sight loss.The overall treatment using these lenses will not only be better than current treatments, it will be cheaper as well. The clinical trials are expected to begin in India in 2013.

A

B

cientists at Karolinska Institutet in Sweden, in collaboration with colleagues in Germany and the Netherlands identified a previously unknown group of nerve cells in the brain that regulate cardiovascular functions such as heart rhythm and

blood pressure. These nerve cells, also known as 'neurons', develop in the brain with the aid of thyroid hormone, which is produced in the thyroid gland. The new study in mice found that thyroid hormone also affects the heart indirectly, through the newly discovered neurons. The discovery opened the possibility of a completely new way of combating cardiovascular disease. Scientists are further researching how to control these neurons as they will be able to treat certain cardiovascular problems like hypertension through the brain.


Since the proposal offers an integrated approach, no element of the ecosystem benefits or suffers at the cost of the other. As the state of the natural ecosystem improves, the community also benefits in a variety of ways. The major cause of diseases in such coastal communities is improper sanitation. The sanitary conditions of the area are anticipated to register a marked improvement as a result of the proper collection, transfer, treatment and disposal of the sewage generated in the area. This improvement should translate into better health for the residents and financial savings. Short-term improvement in the community’s financial condition can be anticipated as the locals find temporary work and employment in activities related to the develop-ment of the ‘Eco-tone Wetland’, a resource that would also provide the local community with an alternative and much more easily accessible source of fuel wood/fodder. This would reduce the levels of exploitation of the mangrove ecology. As the mangroves act as nurseries for a variety of aquatic life, of particular importance being the shrimps, the survival of the mangroves indirectly gets translated in financial benefits for the fishing community. Mangroves act as protective barriers for the coastline and prevent erosion of land, providing safety to the coastline, thus offering added benefits for the community that get translated both in environmental and economic terms. In the social sector, greater social mobility of the women would be facilitated by the project that could impact positively on the economics of the area. The project has sound potential for up scaling within the project area and replication in other coastal communities. Therefore, the

project can offer a good demonstration value and lessons learnt can be shared.Recreational potential of such sites can also be explored where the communities can act as ‘guides’ for tourists thus adding an alternative livelihood option for improving their financial status. Ensuring sustainabilityThe main tools and mechanisms employed for monitoring and evaluation of the performance indicators of the project would include sampling, measurements, surveying and assessment of the performance of the facility (waste collection/transfer system and the wetland). Periodic check/cleanup of the collection/septic tanks would need to be carried out and functioning of sewers monitored. Similarly, periodic monitoring and checks would require to be carried out to assess the state of the effluent quality, biomass production and bio-diversity. The growth of the forest would have to be monitored and at a later stage the public acceptability of the alternative fuel wood/fodder resource would be gauged. Community should be involved in the selection phase of the species that are to be planted so that proper usage is ensured. An effort would have to be made to evaluate impact of the use of the alternative fuel wood/fodder sources on the mangroves by monitoring and comparing the mangrove usage by the project area commu-nity before and after the project intervention. Use of historical data can be made and public surveys conducted to identify and quantify impact. Implementation of such a comprehensive monitoring and evaluation regime can assist in viable replication and upgrading of the proposed intervention.

Tablet PCs have become quite popular now- adays because of their extreme portability, easy to handle and the wide range of ways they can be used. In many ways, they can almost replace

a laptop for any user on the go. But is a tablet really a better choice for someone over a more traditional laptop? After all, laptops can also be extremely portable and have a much wider range of tasks they can be used for. Let us examine these in greater detail in order to have a clearer understanding of which of these two types of mobile computing platforms would serve a PC user better.Input Method: The most obvious difference between a tablet PC and a laptop is the keyboard. Tablets rely solely on a touch interface on the screen for all inputs. This is fine when it involves mainly pointing, dragging or tapping to navigate around a program. The problems arise when you have to input text into a program such as an email or document. Since they have no keyboard, users are required to type on virtual keyboards that have varying layouts and designs. Most people cannot type as quickly or as accurately on a virtual keyboard. Users do have the option of adding an external Bluetooth keyboard to most tablets to make this look like a laptop but it adds costs and peripherals that must be taken with the tablet.Result: Laptops for those that write a lot, tablets for those that do more point interaction.

Size: This is probably the biggest reason for prefering a tablet PC to a laptop. Tablets have the size roughly of a small pad of paper and a weight that is under two pounds. Laptops are generally larger in size and heavier in weight. Even one of the smallest ultraportables, the Apple MacBook Air 11 weighs just over two pounds and has a volume that is larger than an iPad 2. The main reason for this is the keyboard and trackpad which require it to be larger. Add in more powerful compo-nents that require additional cooling and power, they get even larger. Because of this, it is much easier to carry a tablet than a laptop, especially if you happen to be traveling.Result: Tablets are a better choice.Battery Life: Tablets are designed for efficiency because of the low power requirements of their hard-ware components. In fact, the major part of the interior of a tablet is occupied by the battery. In comparison, laptops use more powerful hardware. The battery com-ponent of the laptop is a far smaller percentage of the laptops internal components. Thus, even with the higher capacity battery of laptops, they do not run as long as a tablet. Many of the tablets right now can run up to ten hours of web usage before they require a charge. The average laptop would only run for roughly three to four hours with a few systems able to stretch it out to eight hours but that is still less than a tablet. This

Tablet PCs VS. Laptops

INFORMATION & TECHNOLOGY


by Taimoor Akhtar Bhatti

eadership, especially in the organizational set-up, has been focus of interest of both academicians and practicing managers for a long time. Conventionally, leadership is a personality driven concept. Individu-

als are considered instrumental in bringing the difference in the lives of other people and organizations. The emerging concept of leadership, however, is that it is a culture of managing modern businesses, be it a commercial enterprise, public service institution or not-for-profit entity. Further-more, leadership has since long been considered a sub-system of management that deals with people in the workplace. This was perhaps because of the fact that the concept of leadership was originally derived from the field of politics. Consequently, it was defined as a variant of manag-ing or supervising subordinates per se and it became more of a status symbol to reflect position of individuals along the organizational echelons. Subjectivity and personification of the leaders became the focus of attention for most of the researchers as well as organizational managers. Ironically, all this led to coining of a new title for managers and supervi-sors as leaders but resulted in no synergy in the work place, for they remained narrowly confined to managing (controll- ing to be exact) people and their actions, respectively, which

although led to specific actions but the organizational impact was still missing. This was because of the fact that people and their actions were managed as an end in itself. For instance, the emerging performance culture in many organizations has only been effective in creating the façade. Real and sustainable benefits for the organization remain distant goals. Sub-prime mortgage tsunami in the US is a prominent example of such a scenario. Similarly, the change initiatives in Pakistani financial sector are no exception, as still the service standards are far from the expected. Like- wise, the yawning non-performing financial assets of banks in general are clear evidence to this fact. Many similar scenarios abound globally.Leadership in PerspectivePersonified leadership refers to dependence on a single person as the savior for all. This type of leadership can have many manifestations in the world of work in particular, and in the society in general. Most interesting one is Charismatic-leadership. These persons are considered to command strong follow-ership mainly because of their personality charisma: extra ordinary [inspirational] physical personality, humility, attire, etc., besides, amongst other personified leaders extraordinary achievers who enjoy leadership status such as philanthropists,

means that tablets can achieve all day usage which few laptops can achieve.Result: Tablets won this time.Storage Capacity: In order to keep their size and costs down, tablet PCs have to rely on new solid state storage memory as a means to store programs and data. These have the potential for faster access and low power usage. They have one major disadvantage i.e the amount of files they can store. Most tablets come with configu-rations that allow between 16 and 64 gigabytes of storage. By comparison, most laptops still use tradi-tional hard drives that hold far much more. Extremely affordable netbooks still have 160 gigabytes of storage which allows for ten times the amount of data as the most affordable tablets. This won't always be the case though as some laptops have moved to solid state drives as well and may have as little as 64GB of space.Result: Laptops are edgy here.Performance: Since most tablet PCs are based on extremely low powered processors, they will generally fall behind a laptop when it comes to computing tasks. Of course, a lot of this will depend on how the tablet or laptop is being used. For tasks like email, web browsing, playing video or audio, both platforms will typically work just as well as neither requires much performance. Things get more complicated once you start doing more demanding tasks. For the most part, multitasking or graphics performance is typically better suited with a laptop but not always. Take for instance video editing. One would assume that for this laptops would be pref-erable but a recent test of video editing on the iPad 2 with iMovie found its specialized video hardware actu-ally provided higher performance than doing the same task with iMovie on a MacBook Pro. Result: Laptops are preferable.Software: The software that runs on a laptop or tablet can be vastly different in terms of capabilities. Now if the tablet PC is running Windows 7 such as the HP Slate or ASUS Eee Slate it can theoretically run the same software as a laptop but will likely be slower. This can make it easy for use as a primary laptop using the same software in a work environment. The two other major tablet platforms right now are Android and iOS. Both of these require applications specific to their operating systems. There are tons of programs available for each of these and many will do most of the basic tasks that a laptop can do. The problem is the lack of input devices

and hardware performance limitations meaning thereby that some more advanced features supplied by corre-sponding laptop class programs may have to be dropped in order to fit into the tablet environment.Result: Laptops win.Cost: Tablets are relatively new to the market and, as a result, they tend to carry a fairly high price premium for the new technologies they have installed in them. The average starting price for a tablet PC seems to have settled around $499. By comparison, there are laptop computers that can be found for as little as $300 to $400. Of course, most people are probably not going to be looking at the least expensive laptop. The average price of the laptop is around $650 which is slightly more expensive than the mid range tablet PC . Laptops still have the advantage over tablets.. After all, notebooks price starts with somewhere below $300 but can gener-ally handle all the same tasks as a tablet, just in a ‘not as easy to carry or use format’.Result: Ti Stand Alone Device: This category is describing a situation where a tablet PC would be your only com-puter system. It isn't something that many people would necessarily think about when looking at the devices but it is pretty critical. A laptop is a fully self-contained system that one can use as a computer system in terms of loading data and programs onto and backing up. Many tablet PCs actually require an additional computer system beyond the tablet for backing up the device or even activating it. One could do this on another person's computer but you still have the problem of backing up data especially if you want to temporarily remove an application if you have limited space.Result: Laptop achieves preference.Conclusion: As is evident from the above comparison, laptops still offer a greater level of flexibility when it comes to mobile computing. They may not have the same level of portability, running times or ease of use of a tablet but there are still a number of issues that tablets need to resolve before they become the main means of mobile computing. Over time, many of these issues such as lack of storage capacity and processing power will likely be resolved. If you already have a desktop computer, a tablet PC may be an option if you use it mainly for entertainment and web usage. If it is going to be your primary then a laptop should be the obvious choice.

Comparison Laptop Tablet Screen (Size Inches) 11-20 7-11 Make Phone Calls Yes (via VOIP softwares) Yes Keyboard Full size physical keyboard QWERTY keyboard on

touch screen CD/DVD Drive Yes No Storage Capacity 150-500 GB 16-64 GB Operating system Windows, Mac OS,

Ubuntu etc Smartphone operating system Android, OSX, Symbian, Blackberry



social workers, celebrities, public figures, etc. Stature-based leaders also avail of the status of leaders by default such as feudal lords and their descendents, political icons and their close aides. The stature-based leaders in particular are the ones who are known as born leaders, for they need not do much for becoming leaders. Another very significant type of personified leadership is of fabricated leaders. These are the individuals identified as potential leaders by an outsider group, which then promotes them as leaders and thereby leverages their leadership for accomplishing their specific agenda. Quite a few political leaders fall under this category. It is a common practice of established political parties around the world to continually fabricate new leaders, for this provides them perpetuity while conforming to the needs and expectations of change by the general public. Ironically, sometimes these fabricated leaders are installed by an external group as their instruments to intervene in the policies and decision making processes of another nation or organization, for gaining extraordinary advantage. Another conventional view of leadership is that it is an alternate to managing [manager]. Some, however, consider leading and managing as complimentary to each other meaning thereby that all managers are essentially leaders in one way or the other, for they lead people and manage their performances. As we look at leadership in this context it includes all sorts of personified leaderships, such as; social entrepreneurs, political icons, public admin-istrators, business executives, and teachers, etc. We find one commonality amongst all of them: they all lead people in a particular direction. This follows that leadership is about organizing, coaching, and motivating people in almost every walk of life. In nutshell, a typical personified leader is generally single person (probably the most favored follower of his or her predecessor-leader) above the rest. It is more of a status usually associated with one’s position within the organiza-tional echelons. Ironically, personified leader either has a self-proclaimed status or the one perceived by its followers. Moreover, personified leader has more of a people mobili-zation role. Theoretically, personified leader influences followers for optimal productivity. But in most of the situa-tions followers control the strings of the leader. Transformational leadership is rather an emerging concept. Here the leadership is referred to as organizational culture. It essentially focuses on organizational transformation. It follows that leadership in the emerging context is all about synergizing work groups [people], organizations, systems and the immediate environment, etc. Put it differently, leadership is about changing for better; implementing the change, and, acknowledging [celebrating] the accomplish-ments. Thus in comparison to the conventional perspec-tives, it is relatively more holistic in its scope and pragmatic in its implications. It considers leadership not as a position or personality but as an organizational culture that every individual must live by within his or her permeable domains and its implications are organization wide – strategic, operational and interpersonal. Leadership Concept RevisitedIn this backdrop, the need was felt to revisit leadership from a holistic perspective. This led to the initial point of departure from leaders as a personified concept to leader-ship as a process concept. Having said this, it was further

established that for a leadership, focus should shift from a singular people management to overall organizational management, which shall include strategic orientation, operational orientation and the people orientation. In other words, the leadership concept should encompass strategic, operational and people management as means to continu-ally reforming organizations. Secondly, it is imperative that the leadership process must replace conventional manage-ment processes at all levels, which provides basis for intro-ducing leadership as a superior work culture, where every individual demonstrates requisite leadership orientation irrespective of his or her location and status in the work organization. Thus in nutshell it advocates replacement of personified leaders with a wide spread leadership culture across the work organization.

Myths and RealitiesLeadership is no magic – it is a reality of modern management system geared to accomplishing in dynamic environmentsLeadership is not mundane people management – it is about continually reforming the enterprise performance and people achievements to newer heightsLeadership is no more a status – it is a process that exists at all levels in a successful enterpriseLeadership is not a choice – it is the key to sustaining the present and securing the futureLeadership effectiveness is no more person or posi-tion dependent – it is a complex function of competen-cies, roles, focus and interactions across the organization

Having said so, transformational leadership is a culture per se – set of shared values, habits, and behaviors of employ-ees across the organization. This leadership culture helps the organizations and the people to be creative in finding innovative solutions that help reduce response time to the changing patterns of business requirements of today; and, continually improve process efficiencies and people achievements paradigmatically. Thus, we can say, in the modern times “Leadership Culture” enhances the organiza-tional ability to transform itself (and the performance of people) to newer heights. Hence it is critical for success and sustainability in today’s fast improving world.The FrameworkTransformational-leadership-framework provides a realis-tic basis in the organizational setting for a systematic analysis of leadership as a process. To begin with, this framework proposes a conceptual paradigm shift from personified-leader to the leadership-culture. Hence, it envisages a much broader implication. Precisely, it is about leading the organization in entirety. Teaming up and interacting with people, however, is but one dimension to it. Strategic and operating dimensions are equally signifi-cant too. Transformational leadership promotes a culture of do-it-right. As one can observe, it acknowledges the significance of leadership competencies as the basis. But it rejects the concept of personified leader as advocated by the conventional theorists. In simple words, leadership is more of a way of working in an organization that every individual member should essentially subscribe to instead of searching for the right person who would come and lead [turn around] the organization.

2012 Dec 11 Dec 20 Dec 31

16,95016,90016,85016,80016,75016,70016,65016,60016,55016,500

by Zeeshan Ahmed Mirza

SE-100 Index closed the first week at 16,808 points, up a significant 1.41%WoW. After initial consolidation around the

16,250 points in mid November, the KSE- 100 index resumed its uptrend achieving all time high levels. Average daily volumes dropped to 238.79mn shares, down 18.17%WoW. Major news dictating market sentiment this week were 1) adjournment of ICH case hearing till Dec13’12 by the Lahore High Court (negative for the telecom sector), 2) encouraging cement offtake numbers for Nov’12, 3) a statement by Dr. Hafeez Sheikh that the US will soon disburse US$500mn to US$600mn in lieu of CSF payment due to Pakistan and 4) a commitment by the US to provide US$200mn to finance the Diamer Bhasha Dam (positive for the Cement sector). The Karachi Stock Exchange (KSE) index movement was very cautious because of monetary policy. KSE – 100 index on second week closed at 16,845.09 points by gaining 37.18 points or 0.2 percent. Average volumes plunging by 43%WoW to 136mn shares. On net basis foreigners remained net sellers of US$ 3.8 million this week. The market moved in a range of 200 points and on a WoW basis was up 0.2%. In-line with expectations, SBP cut policy rate by 50bps after market close on Friday. Major news dictating market sentiment this week were 1) The fertilizer factories operating in the SNGPL system have been facing severe gas outages and received less than 50% gas supplies in the 11MCY12 against last year. A subcom-mittee of ECC has turned down a plan to spend USD400mn from GIDC on gas supply to the struggling fertilizer firms and has instead come up with a revised plan, 2) Overseas Pakistanis remitted US$ 5.98 billion in 5MFY13, 3) Local auto sales dipping by 3%MoM in November 2012, 4) Trade deficit decreasing by 20%YoY in Novem-ber 2012, 5) The Economic Coordination Committee of the Cabinet’s approval of new pricing for Qadirpur gas field brought some fresh buying in Oil and Gas Development Company as well.The KSE-100 Index edged higher by 0.12%WoW to close at 16,865 points on third week with average daily volumes clocking in at 138mn shares, up 2%WoW. While the market witnessed profit taking on Monday following absence of any positive surprises in the monetary policy and some law & order concerns in Karachi, it recorded modest gains across the rest of the week. Key data releases during the week included a sizeable Current Account deficit of US$638mn in Nov’12. Despite this, the PKR managed to recover vs. the US$ (after sliding by 1% last week) with the SBP urging exchange companies to take appropriate measures. Within our coverage cluster.KSE 100 index inched closer to the 17,000 points mark closing at 16,943 points on last week of the month of December, up 0.46%WoW. Traders consolidated gains on Thursday as the year draws to a close, however the market picked up again on Friday continuing its push towards the 17,000 points psychological mark. Average daily turnover improved slightly to 141.07mn shares up 1.97%WoW with trading dominated in the 2nd and 3rd tier stocks.

Stock Market ReviewDecember 2012

MARKET REVIEW

K Dec 31, 2012: ^KSE 15910.11

Company Open Close Diff High Low Avg.Rate Turnover*BYCO 10.36 14.45 4.12 14.82 10.01 11.72 194,204,500 MLCF 14.62 14.57 -0.36 15.35 12.60 14.48 179,342,500 JSCL 17.31 16.14 -1.09 19.29 16.00 17.19 171,088,500 LOTPTA 7.20 7.35 0.25 8.37 7.06 7.58 160,052,500 FCCL 6.95 6.54 -0.41 7.09 6.34 6.61 144,609,000 TRG 4.52 5.59 1.23 6.50 3.99 4.78 142,975,000 PIAA 2.61 4.03 1.39 4.76 2.55 3.36 99,342,000 KESC 6.80 5.76 -1.12 7.17 5.49 6.38 97,840,000 PTCL 18.10 17.35 -0.74 18.35 16.61 17.28 88,573,500 ANL 8.56 8.09 -0.44 9.40 7.57 8.33 79,309,000

Top 10 Traded Companies(Dec 2012)

Company Open Close Diff High Low Avg.Rate TurnoverRMPL 3799.99 3998.38 198.39 4,000.00 3,800.00 782.52 460 COLG 1365.00 1500.00 135.00 1,500.10 1,350.00 784.48 21,850 UPFL 4190.00 4300.00 110.00 4,400.00 4,076.00 2,123.90 400 NESTLE 4660.00 4733.33 78.33 4,999.99 4,423.00 3,303.87 4,560 KHTC 62.96 141.20 78.24 141.20 65.12 23.83 2,000 ILTM 998.73 1000.00 48.82 1,125.00 998.73 263.49 700 SALT 111.25 148.69 42.73 162.99 111.25 34.64 8,000 PMRS 53.20 90.00 39.32 91.50 53.00 60.60 73,500 MFFL 350.00 385.12 35.12 403.20 337.25 183.55 46,800 SIEM 750.00 774.68 27.18 784.49 742.00 757.94 105,100

Top 10 Gainers(Dec 2012)

Company Open Close Diff High Low Avg.Rate Turnover*BATA 1725.00 1351.00 -371.00 1,725.00 1,316.00 1,262.14 7,300 ULEVER 9900.00 10100.00 -59.54 10,500.00 9,700.00 9,989.53 71,320 MUREB 152.01 133.06 -26.94 165.00 120.13 106.91 159,400 PSEL 187.67 162.00 -25.67 187.00 160.50 34.05 600 EWIC 223.38 203.07 -20.31 203.07 203.07 10.15 20,000 IGIIL 115.35 96.28 -19.17 121.00 96.23 111.31 3,595,000 EXIDE 319.00 295.00 -18.00 320.00 290.00 270.45 26,600 BHAT 275.00 257.01 -17.99 278.77 257.01 120.93 2,600 SHEZ 440.00 422.75 -17.25 460.00 422.75 110.75 11,400 PKGS 161.00 151.16 -13.34 165.25 149.50 155.04 1,336,500

Top 10 Losers (Dec 2012)

Gross Buy Gross Sell Rs Rs Rs $

FIPI 7,913,713,838 (8,659,499,636) (745,785,799) (7,704,139) Local Companies 32,903,370,171 (32,631,497,428) 271,872,742 2,688,642 Banks/DFI 7,177,654,367 (6,246,964,339) 930,690,025 9,699,096 Mutual Funds 5,452,878,967 (6,835,231,392) (1,382,352,421) (14,548,480) NBFC 1,905,799,652 (2,100,993,202) (195,193,550) (1,875,302) Local Investor 52,326,870,979 (50,228,680,429) 2,098,190,547 21,873,900 Other Organization 1,093,116,578 (2,070,538,126) (977,421,546) (10,133,716)

Foreign Portfolio Investment Monthly (Dec 2012)Net Buy/Sell

T-Bills (3mth) Bids RejectedT-Bills (6mth) Bids RejectedT-Bills (12mth) Bids RejectedDiscount Rate 9.50%Kibor (1mth) 9.19%Kibor (3mth) 9.31%Kibor (6mth) 9.38%Kibor (9mth) 9.70%Kibor (12mth) 9.75%P.I.B (3 year) 10.3995%P.I.B (5 year) 10.9347%P.I.B (10 year) 11.4206%

Money Market






Universal Leadership Skills“Power-to-Lead” is the foremost skill. It has a focus on individuals’ readiness to conduct him or herself in a leader-ship role and prepares the individual to face the strategic and day-to-day challenges with courage and hope. It has several dimensions, such as conviction, motivation, and moral integrity. “Empowerment” is the second competence in sequence. It also has focus on the individuals’ self-management ability. Its dimensions are: discipline, responsibility, and emotional power.“Horizon” is the next critical leadership competence. It has a focus on the individuals’ ability to see opportunities and challenges beyond the present and beyond the obvious. In other words it is an ability to understand the relationship between discrete present and cloudy future. It considers dimensions, like vision, focus, and sense of direction.“Social” competence is no less important. It has a focus on the individuals’ ability to work and interact with other people. Its dimensions include: team-player, role-model, moderator. “Management” competence refers to an individuals’ ability to control the business activity and/or process in an efficient and effective fashion. It has dimensions such as attention to details, systems thinking, and managing change. ConclusionPersonified leadership analysis was limiting the horizon of leadership development in organizational setup, particularly, primarily because personified leadership predominantly

assumes that leadership is an innate characteristic [leaders are born], sometimes explicitly and sometimes implicitly, hence it cannot be developed institutionally. Furthermore, it considers the relationship between leader’s personality and performance as that of “cause and effect” and totally ignores the leadership competencies and the context [transient dynamics] in which employees operate, such as vision and focus, attitude, style and skills and knowledge; and, the process, teamwork [group work], and the perme-able environment, respectively. Interestingly, the transformation leadership perspective has enabled rather pragmatic analysis of leadership scope and implications, yet the personified leadership perspec-tives still hold reasonable grounds when considered in conjunction with other factors as well but fail to do so as a solo factor, as was considered in the initial days. Trans-formational leadership, in fact, does not substitute but compliments the personified leadership perspective by broadening the scope of leadership analysis. It puts leadership at the centre instead of leader [or his personal-ity] as is the case of the former perspective. The signifi-cance of leaders’ personality, however, has shifted from physical to competency orientation such as; socio-moral values, integrity & honesty, behaviors and habits, and last but not the least, cognitive characteristics. It argues that organization’s and group’s effectiveness is a complex func-tion of leadership culture and the work context. Hence, the chances of success can be positively altered through institutional interventions, such as; by modifying leader-ship culture through training and development programs and reshaping the organizational context.

by Raeda Latif

espite a disappointing 2011, many commodities rebounded in a year that was tough for all asset classes. Among agricul-

tural products, wheat and soybeans yielded the highest gains and coffee the biggest loss while in metals, gold's rally stretched to a 12th year whereas oil posted its first annual loss since 2008 as commodities ended 2012 focused on the U.S. fiscal crisis after riding through a blister-ing drought and Europe's debt debacle.Despite a mixed price trend over the year, the FAO Food Price Index (FFPI) averaged 212 points in 2012, 7 percent (17 points) less than in 2011.PMEX commodity index increased by 9.60 % during the year 2012 which is based on seven commodities Gold, Silver, Crude Oil, Rice, Sugar, wheat and Palm Olein.

The precious yellow metal ended up around 7 percent in 2012 despite the presence of so called fiscal cliff that kept the investors aside in December, 2012. Gold went up for a 12th straight year of gains, which makes it one of the longest bull runs ever for a commodity, though it is the smallest annual rise in four years. It remains down 12 percent from a record $1,900.2 set in September, 2011.

At PMEX, gold prices fluctuated between $ 1,538.7 – 1,790.9 per ounce in the year, 2012. Where as traded volumes

CRUDE OIL

SILVER

IRRI-6

at the Exchange increased to Rs. 724 bn from Rs. 581 bn in the corresponding period of previous year, a growth of 25 %. The precious metal maintained its top position at PMEX with a leading share of around 63% in the year 2012.

Oil posted its first loss of around 7 % since 2008, though the prices gained support from robust Chinese data in last quarter of the year pointing to a recovery at the world's second largest economy and second biggest oil consumer. Crude Oil price fell from $ 109.7, the highest in the month of March, to its lowest $ 78.25 a barrel in the month of June. Crude recov-ered in second half of the year despite a fall in the month of October, 2012.

During 2012, the traded volumes at the Exchange increased to Rs. 347 bn from Rs. 98 bn in the corresponding period of previous year, a growth of 254 %. Crude managed to sustain its second position at PMEX with a notable share of 30 % in the year 2012.

Silver rebounded after posting a loss in year 2011. The metal advanced around 6 percent in 2012 as investors boosted holdings in exchange-traded products 9.4 percent to a record 18,916.92 tons on December 28, 2012.

Prices also got support as China’s manu-facturing unexpectedly expanded at the fastest pace in 19 months in December, boosting optimism that a recovery in the

world’s second-largest economy is gaining traction. A growth has been witnessed in the second half of the year.

In domestic market an upward trend in prices was witnessed in first quarter of the year, 2012. Prices remained quite stable with some bumpy rides from April – October where a decrease was observed in last quarter of the year. The decrease was mainly due to the arrival of new crop in later part of the year. Price movement remained in a wide band. Maximum price was Rs 3,575 per 100 Kg in July and Minimum price was Rs 2,975 per 100 kg on the opening day of the year 2,012. A rise of 9.40 % was noted over the year 2012.

29 contracts were traded on PMEX with a value of Rs. 24 million in the year 2012.

Commodity Market 2012

PMEX Commodity INDEX

GOLDPalm Olein\Palm Oil

Palm oil notched its worst annual perfor-mance since the financial crisis in 2008, losing more than one-fifth, mainly because of higher ending stocks news for Malaysia, though the losses were curbed by expecta-tions that heavy rains in the world's No.2 producer may disrupt production and bring down record high stocks. In domestic market, a downward trend in prices was witnessed over the year, 2012, except first quarter. Maximum price Rs 5,385 was in the month of April while Minimum price was Rs. 4,025 per 37.324 kg in October. A drop of 7.50 % was observed in prices in domestic markets.

MARKET REVIEW

D


Sugar Export- SBP asks banks to process cases:The State Bank of Pakistan has advised all banks (Authorized Dealers in Foreign Exchange) to process the cases of sugar export. SBP’s Exchange Policy Depart-ment (EPD) has issued Circular Letter No. 09/EPD.1 (51)-Sugar – 2012 on December 4 according to which export of some 200,000 tons of sugar will be allowed against each E-Form on first come first served basis and without any quantity restriction. Sugar export by the individual sugar mill will be subject to receipt of a minimum 10 percent of total contract value as advance payment (evidenced by advance payment voucher, swift message and reporting schedule/credit advice) and exporter must ship the sugar within 60 days from the date of SBP approval or obtaining an irrevocable Letter of Credit 60 days maturity from the buyer.As per described criteria, banks will forward the requests of sugar mills along attested photo copies of contract, E-Form, irrevocable LC with 60 days maturity or advance payment voucher, swift message and reporting schedule /credit advice, as the case may be, for SBP approval. All requests would be addressed to the Director, Exchange Policy Department, State Bank of Pakistan, I.I. Chundrigar Road, Karachi and SBP will allow permission against each E-Form on first come first served basis. SBP has asked banks to send sugar export update to the Director, Exchange Policy Department, State Bank of Pakistan on daily basis. Incomplete requests will not be considered.

SBP extends Credit Guarantee Scheme:As per IH&SMEFD Circular Letter No. 14 of December 4, 2012, the State Bank of Pakistan has extended the scope of Credit Guarantee Scheme (CGS) by including Microfinance Banks (MFBs) as eligible Participating Financial Institutions (PFIs) in order to enable micro enterprises to benefit from this Scheme. Now MFBs would be able to loans from above Rs. 150,000 upto Rs. 500,000 to micro enterprises for a tenor not exceeding five years. The MFBs which have already obtained approval of SBP for undertaking ‘microenterprise’ lending as per AC&MFD Circular No. 02 dated March 16, 2012, can apply for alloca-tion of Credit Exposure Limits under the Credit Guarantee Scheme. Earlier, the CGS facility was open to commercial banks only.

SBP asks banks to facilitate public in exchanging demonetised Rs 5 note:The State Bank of Pakistan has asked all banks operating in





After 2007, the Pakistanis have virtually stopped remembering Mirza Ghalib on his birthday because it coincides with the death

anniversary of Ms Benazir Bhutto. That’s the impression one gets each year since 2007. This year too no TV channel thought it fit to spare a few minutes for Ghalib although, historically, he was one of the greatest visionaries that the Indo-Pak sub-continent was blessed with, and not surprisingly, forgotten as well.December 27, 2012 marked the 215th birthday of this great visionary about whom there is consensus that he never had formal education. Given this educational background, the grasp he had over Persian and Urdu and his command over theology, philosophy, ethics and history, amaze his critics. Ghalib solved this puzzle and also proved his impeccable integrity in his following couplet:

Aatey hain ghaib se yeh Mazameen khayal meinGhalib sareer-e-khama nawa-e-sarosh hai

By claiming no praise for himself for all the beauty, realism, and the timelessness of his poetry, and honestly assigning it to the Creator, he sets a magnificent example of integrity and selfless-ness. What he concluded about human nature, its intellectual reach, and its piety and integrity is spelled out beautifully in the following couplet:

Bazeecha-e-itfal hai dunya mere aageyHo ta hai shab-o-roze tamasha mere aagey

His vision of the future and understanding of man’s nature and his failings, render his poetry timeless. Just look at the way his poetry describes today’s chaotic scenario as it did hundred and fifty years ago after the great ‘Indian mutiny’:

Koi ummeed bar nahien aatiKoi soorat nazar nahien aati

Aagey aati thi haal-e-dil pe hansiAb kisi baat par nahien aati

Vision wasn’t just a part of his poetry; it manifested itself in practical ways as well, the most significant instance thereof being the way he guided Sir Syed Ahmed Khan to set up a place of learning for the coming generations, to let them acquire a grasp over modern sciences, the deficit of which resulted in the Indians staying far behind the West in every field. He realized it on his visit to Calcutta after the fall of the Moughal empire, where he saw how modern inventions –electricity, steam boats, telegraph, and modern weaponry– had helped the English become the greatest imperial power of that time. Convinced by Ghalib about this undeniable need, Sir Syed, a disciple of Ghalib, made spread of knowledge the aim of his life. After successfully turning Aligarh’s Islamia college into a University

–largest to-date anywhere –Sir Syed would often say how he wished Mirza Sahib was alive today to see that his disciple had fulfilled the promise he had made to his guide–Mirza Ghalib. The role this university played in awakening India’s Muslims and in the creation of Pakistan is no secret. Creation of Aligarh University was the most important event for Indian Muslims because it triggered among them a desire to not just acquire modern knowledge but to become a partner in the evolving world. This quest led many of them to rise to places of eminence, and leave their mark on the pages of history and the man who put them on this elevated track–Sir Syed–owed his grand vision to the master visionary Mirza Ghalib; it is this great attribute that places Ghalib ahead of all his contemporaries. How Ghalib challenged the

Muslims to rise is reflected in a remarkable couplet that also summarizes in a single line the great event of Meraj-Nabvi. Ghalib says:

Us ki ummat mein hun maien, merey rahain kayun kam bundWastey jis Sheh key Ghalib gumbad-e-be-dar khula

This priceless couplet is, in fact, a challenge for the Muslim ummah because it reminds them that they are the followers of the Guide for whom even skies had to part, and make way (the briefest yet the most beautiful reference to Meraj). Should the followers of a Guide like the Prophet (PBUH) find anything an obstruction in their march towards salvation? It is a pity that the Muslim ummah never reflected on this great event (Meraj), and the inspiring message it holds out for the ummah–a refusal to stay behind in any field that promises human well being and emancipation.In spite of being what he was, Ghalib would very humbly and honestly define his place. He recognized the supremacy of the greats like Rumi, Saadi, Hafiz, Jami and Mir Taqi Mir by claim-ing that he was only ‘different’, which he indeed was, by saying:

Hain aur bhi duniya mein sukhanwar bohat achcheyKehtey hain ke Ghalib ka hai andaz-e-bayan aur

The romantic aspect of his poetry too is unique; at times, he went about describing the frustrations of his beloved as well in remarkably beautiful styles. For instance:

Kabhi neki bhi us ke jee mein gar aa jaye hai mujh seJafayein kar ke apni yad sharma jaye hai mujh se

Ghalib died in a state of abject poverty; the last person to meet him, and record it was Khawja Hassan Nizami. Ghalib denied being a wali. But the fact that he left a treasure of wisdom for mankind’s lasting good and died of starvation, suggests he may be a wali, for that’s how walis live and leave a legacy that keeps enriching people for years to come.

ART & LITERATURE

Mirza Ghalib:the divinely gifted poet



SECP notifies accounting rules draft for insurance companies:The SECP has notified draft of accounting rules and regulations for the Life and non-Life Insurance companies. The drafted revised accounting formats and regulations for published finan-cial statements and regulatory returns by insurance entities have been notified in the official gazette of Pakistan to elicit public and stakeholders comments. By issuing these accounting formats and regulations, the SECP, as the apex regulator, aimed to protect the interests of policy holders and promote the sound development of the insurance industry.

SECP imposes Rs 0.3 million penalty on MRA Securities:The Securities and Exchange Commission of Pakistan (SECP) has imposed a penalty of Rs 300,000 on MRA Securi-ties (Pvt) Limited, broker of Karachi Stock Exchange (KSE) for non-provision of record and miscalculation of Net Capital Balance (NCB). The violations came to the notice of SECP during the on-site inspection of the broker under Securities and Exchange Ordinance, 1969. The order passed by the SECP said, “The commission observed that the broker failed to provide complete information and documents to the inspection team.” The order said that it was further observed that NCB certificate submitted by the broker was overstated. During the course of inquiry the SECP officials were informed that the brokerage could not provide the relevant records as demanded by the regulator because of the law and order conditions in Karachi. The brokerage maintained that the relevant staff could not attend the offices as public trans-port was not available. However, the inquiry team in its report said that they noted the staff related to routine business could attend the office, whereas obtaining the soft copy of records did not require too much time or physical presence of the relevant staff. Apart from the fine, the broker was strongly advised to take immediate measures and put in place proper checks and procedures to eliminate the occurrence of such instances in future.

$500m OGDCL exchangeable bond, Govt asked to tap world markets after election: Financial Advisory Consortium (FAC), hired by the government for the launch of Oil and Gas Development Company Limited (OGDCL) exchangeable bonds with a transaction size of $500 million in the international capital markets, have recommended to the government to access international capital markets after general election with greater political certainty in the country. Issuances from high quality and repeat issuers have been cleared but there is still a significant backlog of deals. New equity issuances are primar-ily happening in markets where there is strong domestic bid such as Malaysia and Philippines. The Consortium comprising Citibank, JP Morgan, Credit Suisse and BMA Capital were appointed as joint bookrunners for the transaction.

SECP takes action against com-panies’ directors, auditors:The Securities and Exchange Commission of Pakistan (SECP) took regulatory and punitive actions against companies’ direc-tors and auditors to safeguard the interests of the investors. On the abuse of powers by directors of listed and non-listed companies, the SECP issued show-cause notices to 23 companies in the month of November. The irregularities pertained to unauthorised inter-corporate financing, provident fund, mis-statement of financial state-ments, improper circulation of financial statements and unauthorised utilisation of security deposits. In November, the enforcement department also allowed a listed company for issuance of preference shares that resulted into injection of capital of Rs. 2.4 billion in the corporate entity. Relax-ation was also allowed to another listed company from the requirements of Companies (Issue of Capital) Rules 1996. Four companies were found unable to organise their manda-tory Annual General Meetings in given schedule. They were directed to hold their overdue annual general meetings, while two companies were directed to issue addendum to the notice of annual general meeting/extra-ordinary general meeting. Meanwhile, a listed company was also allowed to change the place of its annual general meeting.

SECP forms body for microin-surance:The Securities and Exchange Commission of Pakistan (SECP) announced the constitution of a Working Group to recommend the regulatory framework for microinsurance, in line with best international practices, backed by technology-based solutions and addressing the issues of capacity building of stakeholders. The SECP has been working proactively with the stakeholders to promote microinsurance through various policy reforms and supporting various initiatives.

SECP imposes Rs1m fine on PPPFTCL:The Securities and Exchange Commission of Pakistan has levied a fine of Rs1 million on Pakistan Petroleum Provi-dent Fund Trust Company (Pvt.) Limited for insider trading. Further, the Pakistan Petroleum Limited official found to have leaked the information regarding the company’s upcoming financials has also been fined Rs500,000. Accord-ing to the SECP notice, the trading data of the Karachi Stock Exchange between August 07, 2012 and August 09, 2012 showed that Pakistan Petroleum Limited Senior Provi-dent Fund managed by PPPFTCL bought 662,500 shares of PPL a few days prior to the announcement of PPL’s finan-cial results for the year ended June 30, 2012. The matter was taken up with PPL and show-cause notices were issued to both the PPPFTCL and the employees of PPL suspected of insider trading. Meanwhile, the SECP discovered that PPL CFO Kamran Wahab Khan was also a member of the PPPFTCL Investment Committee.

TRAVEL & TOURISM

ourism is a booming industry worldwide. It is one of the six key locational factors for a country’s image, the other five being exports, people, governance, cultural and heritage, and investment & immigration. Accord-

ing to World Travel and Tourism Council, in 2011, there were over 983 million international tourist arrivals worldwide, repre-senting a growth of 4.6% when compared to 940 million in 2010. It has an exceptional cultural diversity, encompassing the many monuments, historic towns, gardens, stately homes and castles, cathedrals and churches, industrial monuments, millions of dancing, musical and artistic events, more than 6000 museums, over 360 public and private theatres, some 12 250 public festivals and a number of UNESCO World Heritage Sites. Germany is a land of dense forests and mountains, fairy-tale castles, medieval villages and festivals. The country has some-thing to appeal to almost every tourist, ranging from historic sites and museums to river cruising; and from Alpine skiing to shopping and dining. It even boasts a few seaside resorts along its Baltic and North Sea coastline. Most of Germany's tourist hot spots are centered around areas of outstanding natural beauty.The countryside has a pastoral aura, while the cities exhibit both a modern and classical feel. The most visited tourist regions in Germany are the East Frisian and North Frisian Islands, the Baltic Sea coasts of Holstein and Mecklenburg-Vorpommern, the Upper Middle Rhine Valley, the Bavarianand Black Forest, and the Bavarian Alps. Top Tourist Attractions in GermanySince reunification of East and West Germany into a single entity, the country has gained a higher profile as a travel and

tourism destination. Many new squares and avenues have been constructed while the city's old town areas are also beautifully preserved. Notable landmarks include the Brandenburg Gate and Checkpoint Charlie, the Berlin Television Tower and Char-lottenburg Palace. Berlin is a multi-faceted city and home to the arts and political scene. For nature lovers there are attractions such as the Botani-cal Gardens, Berlin Zoo and the Sea Life aquarium while cultural tourists can find more than 180 museums and galleries. This is also a good shopping venue, with designer boutiques and shopping malls. Some of the worth seeing places in Berlin are Pergamon Museum, Berlin Wall, and Gendarmenmarkt. Other popular cities in Germany include Frankfurt, Munich, Hamburg, Cologne, Potsdam, Dusseldorf, and Stuttgart each of which has its own unique character. Nature lovers will find a world of possibilities in Germany's great outdoors; there is no shortage of outdoor adventures to be had in Germany. The country is well set to help visitors enjoy the landscape, with great walking areas to appeal to hikers in summer. In winters, skiers can take advantage of the numerous ski resorts. Frankfurt: Frankfurt is the main commercial, financial, and transportation hub in Germany and an industrial and financial metropolis. It is a gateway to many international tourists coming to Germany. Modern high-rises reflect post war development while the restored Old Town still attracts tourists. Those spend-ing time in the city, take a stroll through the Museum District, home to a number of interesting museums, or wander past the landmark Römer, which comprises the Old Town Hall and the New Town Hall.

T

Tourism in Germany:The fifth most visited country in Europe

Städel Museum, Frankfurt

Deutsche Museum, Munich The New City Hall, Hanover


by K. Jehangeer Khan




Munich: The centuries old city of Munich is a mix of old and new, where various architectural styles co-exist. The vibrant cultural scene is often compared to that of Berlin. The city was almost completely destroyed in two world wars, yet it has managed to recreate much of its folkloric, Bavarian past. Bavaria: The city is a harmonious blend of the traditional and the modern. Located in southeastern Germany, Bavaria is one of the oldest states in Europe. It is a mixture of beautiful coun-tryside, towering Alpine mountains, vibrant cities and medieval villages. Blue skies, crystal-clear lakes, mystical forests and snow-capped mountain peaks, a wealth of cultural attractions, outdoor activities and relaxation fill the visitors with inspiration and passion for life. Neuschwanstein is situated on a rugged hill near Füssen in southwest Bavaria. Neuschwanstein is one of the most popular tourist attractions in Germany. This fairytale castle was the inspiration for the Sleeping Beauty castles in the Disneyland parks.The state contains two UNESCO World Heritage Cities, Regensburg and Bamburg, as well as more than 70 castles, fortresses and palaces.The Rhine Valley: The Rhine is Germany's principal and longest river. This is a top class river cruising destination. Rhine Valley is also an excellent venue for walking and cycling vacations.Hamburg: Hamburg is a harbor city. Its port is the third largest in the world, after London and New York. A stroll along its many waterways and canals is refreshing and fascinating.

Miniatur Wunderland, Hafen Hamburg and Park Planten un Blomen are some of the places worth not missing. Cologne: This is a historical place in Germany which has 2,000 years of history. Culture is an essential feature of the buzzing metropolis of Cologne. Architectural treasures abound with old churches, museums, and halls. The visitors here will find every-thing from Roman towers to Gothic churches to fine examples of modern architecture. Cologne Cathedral (Kölner Dom) has been Cologne’s most famous landmark for centuries. Rügen Cliffs: The Rügen Cliffs are located in the Jasmund National Park in the northeast of Rügen Island in the Baltic Sea off the coast of Mecklenburg-Western Pomerania. Rügen, Germany’s largest island, has been one of Germany’s most popular travel destinations for centuries. The 118 meter (387 feet) high Königsstuhl (king’s chair) is the most majestic part of the cliffs. The undisturbed forests behind the cliffs are also part of the national park.Brandenburg Gate: The Brandenburg Gate is the only surviving city gate of Berlin and symbolizes the reunification of East and West Berlin. Built in the 18th century, the Bran-denburg Gate is the entry to Unter den Linden, the prominent boulevard of linden trees which once led directly to the palace of the Prussian monarchs. It is regarded as one of the most famous landmarks in Europe.The Government in Germany is set about making efforts for facilitating and strengthening domestic tourism, alongside climate protection measures.

Brandenburg Gate, Berlin Rügen Cliffs Jasmund National Park

Neuschwanstein Castle, Bavaria Alster lake, Hamburg Kölner Dom, Cologne Cathedral

The Rhine Valley


Ten ways to avoid intricacies with your visa applicationDisclaimer: Although the information has been prepared with utmost care, we cannot accept any responsibility for inaccuracies contained herein.

Apply well in advance!Make your online appointment under http://service.diplo.de/rktermin/extern/choose_realmList.do? locationCode=isla&request _locale=en .Usually, online appointments are available two to three weeks later. The application procedure takes about two more weeks. There-fore, start at least 6 weeks before you intend to travel. In case your application cannot be processed for certain reasons or in case you cancel your appointment, the online appointment system does not allow you to make a new appointment for a period of two weeks. This means, your application procedure might be delayed with another 5 - 6 weeks. Thus, we recommend to apply three months in advance (if possible).

Don’t try to outsmart the online appointment system!Please use your current passport number only and write your name exactly in the way it is written in your passport. Any attempt to make more than one appointment with different passport numbers will lead to the rejection of your application. Please also ensure that your passport number, your e-mail address, etc. are filled out correctly, otherwise you may lose your appointment.

Ensure that your documents are complete!Visit http://www.pakistan.diplo.de/envisa, choose the correct type of visa (business, trade fair, visitor, etc.), print out the list of docu-ments available as a download and tick off each and every document. For each documents, important hints are given on the right side of the list.

Submit a correct travel insurance!Some insurance policies mention Germany or another Schengen country only. Please make sure that explicitely all (!) Schengen States are covered by the insurance.

Apply at the German Mission which is competent for your place of residence!Residents of Sindh and Balouchistan need to apply at the German Consulate General Karachi. Residents of the other provinces and areas in Pakistan should apply at the German Embassy Islamabad.

Apply at the Embassy/Consulate of the country which is your main destination!Don’t go for visa shopping, that means don’t apply at any Schengen Embassy/Consulate of your choice, but at the Embassy/ Consulate of the country which is your main destination. Your main destination is the country in which you stay longest or the country your visit to is most important. If your stay in all Schengen countries is of the same duration or importance, apply at the Embassy/Consulate of the country you enter first.

Come to the visa section in person (unless your are exempted)!Only those Travellers- who have been in the possession of at least two valid Schengen visa (category C, issued by any Schengen state) within the past 24 months and have used them in a lawful manner or- who have been in the possession of a Schengen visa with a validity of a year or several years in the past (24 months time limit does not apply in this case) and have used them in a lawful manner are exempted from a personal appearance at the visa section. They can send a person of trust with their application form and the required documents.

Don’t use the “services” of any persons outside the visa sectionPersons outside the visa section offering their services for the visa procedure neither work for nor work with the consent of the visa section. In case these persons do promise any favour regarding the issuance of a visa, please report them to the visa section in writing.

Check your personal data on the visa sticker!After receiving your visa, you should examine all data very carefully. If a mistake in the spelling of your name or of your passport number occurs, it could cause difficulties at the border.

Stick to the maximum of days permitted!Your visa sticker indicates a number of days that you are permitted to stay within the Schengen States (up to 90). This number always refers to a six-months-period starting from the date of issuance. Don’t stay more days within this period, otherwise your name will be registered for refusal of future visa applications.

Islamabad


Victory at World Snooker ChampionshipCoach or no coach, patronage or nothing of it, facilities or none of them, but hard work and commitment pays off in the end. Pakistan’s Muhammad Asif–now world’s snooker champion proved just that by winning the IBSF World Snooker Championship in Sofia, Bulgaria. He got no help from Pakistan Sports Board for participating in this event. He had to travel to Sofia on his own, without even a kit carrier, let alone a manager. The Faisalabad’s local snooker association gathered funds for his journey and provided all the necessary assistance. The Pakistan Sports Board (PSB) neglected him not just on this occasion; it never bothered about him. However, once he had won the world championship, loads of cash prizes were announced, the first by Chief Minister of the Punjab. Hopefully, by now the PSB knows a bit more about Asif ’s talents. Asif was jobless, but gradually built a small snooker club in front of his house to carry on with his struggle because of Pakistan Sports Board’s inability to recognize the talents he possesses and refusal to support him. The two-time national snooker champion, aged 31, also did not have any technical support or corporate patronage; but he worked really hard and finally won the IBSF world snooker championship to become the second Pakistani cueist to win this title. Asif played 5 matches in the tournament and throughout remained unbeaten. Earlier, he defeated Australia’s Vinnie Calabrese 5-0 in the first round. Next, he overcame Egypt’s Wael Talaat 5-2 in the pre-quarterfinal, then defeated Syria’s Mer Alkojah 6-2 in the quarterfinal and outclassed Malta’s Alex Borg 7-1 in the semifinal to make it to the final. In the final of the championship, he convincingly beat his oppo-nent Britain’s Gary Wilson 10-8 in a 19 frame thrilling final that was played on December 2, 2012.With limited resources and without sponsors, Asif‘s struggle to get on the road to glory and success therein, should be a great motivational lesson for the younger generation, and very good news for Asian snooker fraternity since it is the second time the trophy has come to Asia.

Runner-up in World Blind Cricket T20The first ever Blind Twenty20 Cricket World Cup was held in India between December 2 and 13. Australia, Bangla-desh, England, India, Nepal, Pakistan, South Africa, Sri Lanka and West Indies participated in the tournament. Pakistan played a total of 10 matches in the tournament and lost just one–the final match against India. Earlier, Pakistan defeated 8 teams including England, South Africa, the West Indies, Australia, India, Bangladesh, Sri Lanka and Nepal. In its match against W. Indies, Pakistani batsman Muham-mad Ahmed created a world record by scoring 264 runs from just 85 balls to help his side to a huge win. Pakistan defeated England by 9 wickets on December 12, to reach the target of 182 runs, and it did so in just 13 of the 20 overs. Muhammad Akram scored 103 runs in 42 balls to help his team win the match. He also earned the Man of the Match title. In the final of the tournament on December 13, however, India outclassed Pakistan by 29 runs. Pakistan won the toss and invited India to bat first. Indian players posted a huge total of 258 runs. Although Pakistan had not lost any match before, couldn’t match the required run rate, right from the start and managed to score only 229 runs. Pakistan blind cricket team captain Zeeshan Abbasi blamed extra runs conceded by bowlers for the defeat of his side.

Faysal Bank T20 championshipThe 9th Faisal Bank T20 Championship was played from December 1 to 9 at Lahore. Fourteen teams–Abbottabad Falcons, Islamabad Leopards, Karachi Zebras, Lahore Lions, Multan Tigers, Quetta Bears, Sialkot Stallions, and Rawalpindi Rams, Peshawar Panthers, Lahore Eagles, Karachi Dolphins, Hyderabad Hawks, Faisalabad Wolves and Bahawalpur Stags played a total of 45 matches. The final of the championship was played on December 9, at Lahore’s Gaddafi Stadium between Lahore Lions and Faisalabad Wolves. Lahore Lions won the final by 33 runs. Ahmed Shehzad of Lahore Lions, with 391 runs in the tournament, was the highest scorer, and Muhammad Talha ended up as the batsman with the highest strike rate of 188.88.

SPORTS

Sports round up forDecember 2012


new biological paper by the research of Chinese and Australian biologists published in the journal “Science” provided an insight into the evolution of the bat's flight, resistance to viruses, and relatively long life.

The Bat Pack, a team of researchers at the Australian Animal Health Laboratory (AAHL) in Geelong, in collaboration with the Beijing Genome Institute, conducted a wide range of research into bats and bat borne viruses, and their potential effects on the human popula-tion, as well as differences between DNA of bats and humans. They are sequencing the genomes of two bat species -- the Black Flying Fox, an Australian mega bat, and the David's Myotis, a Chinese micro bat. Once the genomes were sequenced, they compared them to the genomes of other mammals, including humans, to find where the similarities and differences lay. Research found that bats have developed some novel genes to deal with the toxins. Some of these genes, including P53, are implicated in the development of cancer or the detection and repair of damaged DNA.

n December 25, arch rivals India and Pakistan faced each other at Bangalore’s M. Chinnaswamy Stadium, after 5 long years to play a cricket series. After winning the toss captain Mohammad Hafeez

opted to field first. Aggressive bowling by over seven feet tall Irfan–tallest cricketer in the world–forced Indian openers Gautam Gambhir and Ajikya Rahane to play cautiously but gradually they enhanced the run rate and gave India a start of 77 runs in 66 balls. Then Rahane was dismissed by leg-spinner Shahid Afridi for 42. Soon, Gambhir was run out by a targeted throw from Sohail Tanvir. Dismissal of the openers in quick succession triggered a crash of the Indian side forcing it to finish with a low total of 133 for 9. In effect, the other 7 batsmen could score only 56 runs in 54 balls, and only two reached double figures. For Pakistan, pacer Umar Gul got 3 wickets for 21, but most unluckily, missed a hat-trick, and Saeed Ajmal–the world’s best off-break bowler–bagged 2 for 25. Afridi and the debutant pacer Irfan–whose balling touched a peak of 146 km per hour– took one wicket each. Experts are of the opinion that on Chinnaswamy Stadium’s pitch, the safe score is 155 or 160 runs. Pakistan thus had an advantage, but while chasing India’s 133 runs, it started its innings in a disastrous manner, losing the first 3 wickets for a paltry 12 runs. Nasir Jamshed, Ahmed Shahzad and Umar Akmal simply couldn’t face up to remarkable swing bowling by Kumar. However, captain Hafeez, and former captain Shoaib Malik, batted sensibly (though they too had their uneasy moments) to repair the damage caused by the loss of 3 early wickets, and added 106 runs in the fourth wicket partnership to help Pakistan score 118 runs in 17 overs. But after scoring 61 in 44 balls, Hafeez was caught by B. Kumar off the bowling of Ishant Sharma. Kamran Akmal, in next, could not do much against Sharma’s splendid pace bowling, and was quickly back in the pavilion, but not before exchange of hot words with Sharma–a scene that should have been avoided even though Sharma was at fault. Kamran was fined 5 percent of his match fee, while Sharma was fined 15 percent. Earlier in the match, Sharma collided with Hafeez, and could have caused Hafeez to be run out, but it didn’t turn into a clash.But Malik stuck on with Afridi (who too wasn’t comfortable against Sharma’s pace bowling) to hit a match winning sixer after scoring his fourth T20 half-century, and remained not out on 57. Mohammad Hafeez, having scored 61 in 44 balls was declared the “Man of the Match”. The other peculiarity of the match was that both sides fielded debutant pacers– Bhubaneshwar Kumar in India’s side and Mohammad Irfan in the Pakistani team and both performed very well. But the fact is that in the T20 format, world’s top three bowlers are Pakistan’s Saeed Ajmal, Umar Gul and Shahid Afridi. This is Pakistan’s edge; but its batting remains unpredictable, which has the effect of passing the pressure on to its bowlers.

On December 28, Indian and Pakistani cricket teams again faced each other in Ahmedabad’s Sardar Patel Stadium, to play the second and final T20 match of their 2012 series. Pakistan won the toss, and opted to bowl first. This time it favoured the Indians. While the openers scored just 44 runs, in partnerships with Kolhi and captain Dhoni, Yuvraj Singh scored 72 runs in 36 balls (including 7 sixes, 3 against Saeed Ajmal in one over, which proved decisive) and helped India finish its innings with 192 for 5 wickets. Ajmal was hit for 42 runs in his 4 overs, but was allowed to complete his spell.Another odd decision of skipper Hafeez was to allow Sohail Tanvir go on bowling towards the end although he wasn’t in form, and was hit for 44 runs in his 4 overs. On top thereof, Hafeez bowled just one over and did not utilize the bowling talents of Shoaib Malik. The star bowler was Umar Gul who got 4 of the 5 Indian wickets for 37 runs. Saeed Ajmal bore the brunt of Yuvraj’s fury; the Indian hit four sixes off him with three of them coming in a row in the 19th over. The perfor-mance of the bowlers allowed India to score 192 for 5 and made victory a tough challenge for Pakistani batsmen, as proved by the subsequent events. In this context, it is worth noting that India posted their highest total against Pakistan in T20s, and Yuvraj’s career-best T20 knock was well-timed to lift India back to third place in the T20 ranking. Pakistan’s openers batted well to score 74 runs. Thereafter, skipper Hafeez and Umar Akmal scored 62 runs in just 5.3 overs but Shahid Afridi and Kamran Akmal didn’t stay with Hafeez for long, and could score 11 and 5 runs respectively, as the Indian bowlers regrouped to stage a brilliant recovery. A bigger oddity was that Shoiab Malik came in to bat after K Akmal and Afridi when just three overs were left.Indian pacer Ashok Dinda got three wickets for 36 runs; his spell included the crucial wicket of skipper Hafeez (who was able to score 55 runs of 26 balls), in the penultimate over to turn the tide in India’s favour. Besides skipper Hafeez, the openers Nasir Jamshed (41) and Ahmed Shehzad (31) made their contributions to Pakistan’s score of 181 for 7 wickets. Skipper Hafeez scored his back-to-back half century (which included 5 fours and 3 sixes) in 23 deliveries, with a hit past the bowler. At one stage it seemed that Pakistan was on course to cross India’s challenging total, but Dinda and Ishant Sharma kept their cool during the final overs to turn the match in India’s favour. Needing 20 runs off the final over bowled by Ishant Sharma, Umar Gul and Shoaib Malik could score just 8 runs much to the delight of the home crowd and skipper Dhoni whose leadership has been criticised after England defeated India 2-1 in the recent test match series. Besides, while India has been lifted back to the third place in the T20 ranking, Pakistan, which shot up to the third place after winning the first T20 match in the current series in India, has fallen to the sixth place. However the series with India ended 1-1.

O

SPORTS

T20 series results are shared equally


ablet PCs have become quite popular now- adays because of their extreme portability, easy to handle and the wide range of ways they can be used. In many ways, they can almost replace

a laptop for any user on the go. But is a tablet really a better choice for someone over a more traditional laptop? After all, laptops can also be extremely portable and have a much wider range of tasks they can be used for. Let us examine these in greater detail in order to have a clearer understanding of which of these two types of mobile computing platforms would serve a PC user better.Input Method: The most obvious difference between a tablet PC and a laptop is the keyboard. Tablets rely solely on a touch interface on the screen for all inputs. This is fine when it involves mainly pointing, dragging or tapping to navigate around a program. The problems arise when you have to input text into a program such as an email or document. Since they have no keyboard, users are required to type on virtual keyboards that have varying layouts and designs. Most people cannot type as quickly or as accurately on a virtual keyboard. Users do have the option of adding an external Bluetooth keyboard to most tablets to make this look like a laptop but it adds costs and peripherals that must be taken with the tablet.Result: Laptops for those that write a lot, tablets for those that do more point interaction.

Size: This is probably the biggest reason for prefering a tablet PC to a laptop. Tablets have the size roughly of a small pad of paper and a weight that is under two pounds. Laptops are generally larger in size and heavier in weight. Even one of the smallest ultraportables, the Apple MacBook Air 11 weighs just over two pounds and has a volume that is larger than an iPad 2. The main reason for this is the keyboard and trackpad which require it to be larger. Add in more powerful compo-nents that require additional cooling and power, they get even larger. Because of this, it is much easier to carry a tablet than a laptop, especially if you happen to be traveling.Result: Tablets are a better choice.Battery Life: Tablets are designed for efficiency because of the low power requirements of their hard-ware components. In fact, the major part of the interior of a tablet is occupied by the battery. In comparison, laptops use more powerful hardware. The battery com-ponent of the laptop is a far smaller percentage of the laptops internal components. Thus, even with the higher capacity battery of laptops, they do not run as long as a tablet. Many of the tablets right now can run up to ten hours of web usage before they require a charge. The average laptop would only run for roughly three to four hours with a few systems able to stretch it out to eight hours but that is still less than a tablet. This

s the Pakistan-India ODI series came closer there were indications that Sachin Tendulkar–India’s as well as the cricketing world’s master batsman– was likely to be ignored by the team selectors. While he

still had several dedicated backers in the Board for Control of Cricket in India (BCCI), including the board’s president, N Srinivasan–but some in the higher echelons of the board thought it is time the 39-year old ‘great’ retires from cricket; they had valid reasons to suggest so, based on Tendulkar’s recent batting record in ODIs, as well as test matches.In the ten ODI matches he played in 2012, Tendulkar could average only 31.50 runs a match, with just one century–his 100th in tests and ODIs–that he scored in the match India lost to Bangladesh in the Asia Cup, and one half-century. The last ODI he played was in March against Pakistan, wherein he scored 52 runs off 48 balls. Thereafter, he had opted out of India’s next and last ODI series in 2012–the five-match tour of Sri Lanka in July-August. Since then, Tendulkar played in six test matches in which he scored a total of 175 runs (including one half-century) at an average of 19.44. In August, playing against New Zealand, he was bowled out for 19, 17 and 27, which was a shocking experience for his admirers. In the test match series against England that ended in December, he was once again out of form; all he could manage were 112 runs in six innings at an average of 18.66 runs. It was the third series over the last 18 months wherein he couldn’t score a century, which built the case for his taking retirement because, in both test matches and ODIs, he had been finding it difficult to face up to young bowlers. But the “un-droppable” Tendulkar finally forfeited his coveted place in Indian cricket, though he was eager and ‘available’ for the 3-match ODI series, to be played against Pakistan. What he was overlooking was that, in the process, very unwisely, he was damaging his otherwise great 23-year record as the top-ranking batsman in the world. The rumblings within BCCI about the champion batsman’s future, for the first time in over two decades, eventually did convince him to retire from the ODIs. It would be the first time in his 23-year career that he would miss an ODI series. Tendulkar’s retirement will be a great jolt for millions of his admirers, even though it is Tedulkar’s own decision; he was, without any doubt one of the master batsmen of all times, and set examples of what is good batting. Tendulkar’s retirement will make life difficult for the current BCCI selection committee since, after hosting Pakistan for 3 ODIs India will play 5 ODIs against England. But, India has many upcoming batsmen, though it will take them time to come close to Tendulkar. It is a tough challenge for them to play without him and the spirit he injected in the team.Tendulkar has retired from the ODI version of cricket, but the landmark he has left behind, will inspire batsmen for years to

come; to-date he is the world's top batsman in ODIs having scored 18,426 runs in 463 matches, at an average of 44.83 with 49 centuries. The batsman closest to Tendulkar is South African Jacques Kallis with a score of 11,498 runs that include 17 hundreds. Scoring 100s in ODIs isn’t an easy task; it calls concentration on and maximizing each scoring opportunity offered by the opposing side; he showed both. Given below are the highest scores of his ODI 463-match career:

Until early 2012, Tendulkar was batting in his usual style; he was able to score 113 runs in an ODI in 2012 and it seemed that age couldn’t wither him. This he had proved earlier as well by cracking a double century against South Africa in 2010. His was the first double-century in the ODI format of cricket, after as many as 2,961 matches had been played–the first being played well in January 1971–well before he had entered the world cricket arena. The records Tendulkar has set are gigantic despite his recent unim-pressive performance; age finally takes its toll on even the best; he is no exception to this rule. Tendulkar is known for his orthodox and unorthodox strokes, his flamboyance, and his exciting and aggressive stroke play that combined classical batting techniques with frequent pinches of smartly contrived aggression. But on the field, he never put himself before the team. In a book "Shane Warne's century", Warne remembered Tendulkar by saying that "the way he conducts himself, handles fame and everything that goes with being Sachin, is a great example for all sportsmen." Australia's Don Bradman, rated as the greatest test batsman ever, once said that Tendulkar's batting style reminded him of his own i.e. dominate and demoralise the opposing team. Indian legend Sunil Gavaskar–first batsman to score 10,000 test runs–says he was convinced that Tendulkar will achieve great-ness when he (Gavaskar) first saw him bat in the nets more than two decades ago. "It is hard to imagine any player in the history of the game who plays like the little champion. There is not a single shot that he can’t play." His peculiar style of batting was his only way of expressing arrogance; as a human being and a player, he has rarely been anything less than a Gentleman. All his admirers were used to seeing a smile on his face all the time, and a clearly visible commitment with which he spent every moment, while on the field; new cricketers have a lot to learn from this legacy.

A

SPORTS

Tendulkar retiresfrom ODIs

Score Against Place Date 200 South Africa Gawalior, India 24.02.2010 143 Australia Sharjah, UAE 22.04.1998140 Kenya Bristol, England 23.05.1999114 Bangladesh Dhaka, Bangladesh 16.03.2012110 Australia Colombo, Sri Lanka 09.09,1994


means that tablets can achieve all day usage which few laptops can achieve.Result: Tablets won this time.Storage Capacity: In order to keep their size and costs down, tablet PCs have to rely on new solid state storage memory as a means to store programs and data. These have the potential for faster access and low power usage. They have one major disadvantage i.e the amount of files they can store. Most tablets come with configu-rations that allow between 16 and 64 gigabytes of storage. By comparison, most laptops still use tradi-tional hard drives that hold far much more. Extremely affordable netbooks still have 160 gigabytes of storage which allows for ten times the amount of data as the most affordable tablets. This won't always be the case though as some laptops have moved to solid state drives as well and may have as little as 64GB of space.Result: Laptops are edgy here.Performance: Since most tablet PCs are based on extremely low powered processors, they will generally fall behind a laptop when it comes to computing tasks. Of course, a lot of this will depend on how the tablet or laptop is being used. For tasks like email, web browsing, playing video or audio, both platforms will typically work just as well as neither requires much performance. Things get more complicated once you start doing more demanding tasks. For the most part, multitasking or graphics performance is typically better suited with a laptop but not always. Take for instance video editing. One would assume that for this laptops would be pref-erable but a recent test of video editing on the iPad 2 with iMovie found its specialized video hardware actu-ally provided higher performance than doing the same task with iMovie on a MacBook Pro. Result: Laptops are preferable.Software: The software that runs on a laptop or tablet can be vastly different in terms of capabilities. Now if the tablet PC is running Windows 7 such as the HP Slate or ASUS Eee Slate it can theoretically run the same software as a laptop but will likely be slower. This can make it easy for use as a primary laptop using the same software in a work environment. The two other major tablet platforms right now are Android and iOS. Both of these require applications specific to their operating systems. There are tons of programs available for each of these and many will do most of the basic tasks that a laptop can do. The problem is the lack of input devices

and hardware performance limitations meaning thereby that some more advanced features supplied by corre-sponding laptop class programs may have to be dropped in order to fit into the tablet environment.Result: Laptops win.Cost: Tablets are relatively new to the market and, as a result, they tend to carry a fairly high price premium for the new technologies they have installed in them. The average starting price for a tablet PC seems to have settled around $499. By comparison, there are laptop computers that can be found for as little as $300 to $400. Of course, most people are probably not going to be looking at the least expensive laptop. The average price of the laptop is around $650 which is slightly more expensive than the mid range tablet PC . Laptops still have the advantage over tablets.. After all, notebooks price starts with somewhere below $300 but can gener-ally handle all the same tasks as a tablet, just in a ‘not as easy to carry or use format’.Result: Ti Stand Alone Device: This category is describing a situation where a tablet PC would be your only com-puter system. It isn't something that many people would necessarily think about when looking at the devices but it is pretty critical. A laptop is a fully self-contained system that one can use as a computer system in terms of loading data and programs onto and backing up. Many tablet PCs actually require an additional computer system beyond the tablet for backing up the device or even activating it. One could do this on another person's computer but you still have the problem of backing up data especially if you want to temporarily remove an application if you have limited space.Result: Laptop achieves preference.Conclusion: As is evident from the above comparison, laptops still offer a greater level of flexibility when it comes to mobile computing. They may not have the same level of portability, running times or ease of use of a tablet but there are still a number of issues that tablets need to resolve before they become the main means of mobile computing. Over time, many of these issues such as lack of storage capacity and processing power will likely be resolved. If you already have a desktop computer, a tablet PC may be an option if you use it mainly for entertainment and web usage. If it is going to be your primary then a laptop should be the obvious choice.

n hockey’s Asian Champions Trophy tournament played in Doha in December, Pakistan broke the Indian hearts again within a month following its 3-2 victory over India for third place in the Champions Trophy played in Melbourne. On

December 27, Pakistan thrashed India 5-4 in a thrilling final at the Al-Rayyan Hockey Stadium. Pakistan’s victory was its revenge for its defeat against India in the inaugural edition of the event in Ordos, China, where India defeated Pakistan on penalties. This victory may appease the old Olympians.Asian Champions Trophy tournament was played by six top teams from Asia–Pakistan, China, India, Japan, Oman, and Malaysia. Earlier, in the tournament, Pakistan had defeated Oman 8-3 in their opening match, followed by a 5-2 win in their match against China, a 3-3 draw vs. Malaysia, and a 2-1 defeat against India–the team they defeated and clinched the bronze medal in the Champions Trophy played earlier this month in Melbourne. In the final pool match, Pakistan was able to defeat Japan 5-2, to set up a clash with India. While India won the silver medal, Malaysia clinched the bronze medal by beating China 3-1.Pakistan’s star player Shakeel Abbasi was injured during the match, and had to leave the ground but Mohammad Imran and Mohammad Waqas Sharif scored two goals each while Shafqat Rasool added one goal in a topsy-turvy match that saw both sides take the lead and relinquish it. After failing to score an equaliser in the first five minutes of the second-half, Rasool made it 2-2 in the 42nd minute. Just 6 minutes later, Imran’s flick made it 3-2. India levelled the score soon through Gurvinder Singh Chandi in the 55th minute but in the next 2 minutes Waqas put Pakistan up 4-3. India made it 4-4 through a penalty corner shot by Rupinder Pal Singh. In the final minutes the Indian team staged a walk-out after the referee turned down their appeal for a penalty corner but on their return, in the 64th minute, another penalty corner was awarded against India and Imran scored the winning goal and Pakistan once again became the Asian champion.

Hockey’s 2012 “Champions Trophy” tournament was held in Melbourne, Australia beginning December 1, and world’s top teams–Australia, Belgium, England, India, Germany, the Nether-lands, New Zealand and Pakistan competed for the top place. Pakistan’s hockey team finally broke its long spell of defeats in international competitions by winning a medal. The weak perfor-mance had caused a split in the players, as reflected by the stance of the PHF and of the ex-Olympians who believe that blackballing some of the good players for playing in India’s domestic hockey tournament last year, had weakened Pakistan’ hockey team. Although Pakistan won the bronze in Melbourne, winning it marked Pakistan’s re-entry into hockey’s top slot–something that was sought by admirers of the game for long. Pakistan played a total of 6 matches, lost 3, and won 3, but managed to qualify for the semi-finals. In its first match, Netherlands beat Pakistan 3-1, but in the next match, Pakistan was able to thrash Belgium 2-0. However, despite putting up a tough fight Pakistan lost to Australia 0-1. But in the next match on December 6, Pakistan made a resounding comeback; it won against Germany 2-1. But in the next match on December 8 Pakistan was the loser vs. Netherlands 2-5. Finally, Pakistan played its last match position on December 9, for the third against India, and won it 3-2 to take the bronze medal. Three-time Champions Trophy winner, Pakistan won its last medal at Lahore in 2004, where too it had won the bronze medal by defeating India. This time again it won the bronze medal by defeat-ing India. In this match Muhammad Rizwan Junior, Shafqat Rasool and Muhammad Ateeq succeeded in scoring one goal each, to defeat the Indian side. For India, V Raghunath and Rupin-der Pal Singh scored one goal each, through penalty corners. Although, Pakistan ended up with a bronze medal, the best part was that Shakeel Abbasi of Pakistan clinched the “Best Player of the Tournament” award for scoring the maximum number of goals.

I

SPORTS

Hockey:Pakistan back on the top


SE-100 Index closed the first week at 16,808 points, up a significant 1.41%WoW. After initial consolidation around the

16,250 points in mid November, the KSE- 100 index resumed its uptrend achieving all time high levels. Average daily volumes dropped to 238.79mn shares, down 18.17%WoW. Major news dictating market sentiment this week were 1) adjournment of ICH case hearing till Dec13’12 by the Lahore High Court (negative for the telecom sector), 2) encouraging cement offtake numbers for Nov’12, 3) a statement by Dr. Hafeez Sheikh that the US will soon disburse US$500mn to US$600mn in lieu of CSF payment due to Pakistan and 4) a commitment by the US to provide US$200mn to finance the Diamer Bhasha Dam (positive for the Cement sector). The Karachi Stock Exchange (KSE) index movement was very cautious because of monetary policy. KSE – 100 index on second week closed at 16,845.09 points by gaining 37.18 points or 0.2 percent. Average volumes plunging by 43%WoW to 136mn shares. On net basis foreigners remained net sellers of US$ 3.8 million this week. The market moved in a range of 200 points and on a WoW basis was up 0.2%. In-line with expectations, SBP cut policy rate by 50bps after market close on Friday. Major news dictating market sentiment this week were 1) The fertilizer factories operating in the SNGPL system have been facing severe gas outages and received less than 50% gas supplies in the 11MCY12 against last year. A subcom-mittee of ECC has turned down a plan to spend USD400mn from GIDC on gas supply to the struggling fertilizer firms and has instead come up with a revised plan, 2) Overseas Pakistanis remitted US$ 5.98 billion in 5MFY13, 3) Local auto sales dipping by 3%MoM in November 2012, 4) Trade deficit decreasing by 20%YoY in Novem-ber 2012, 5) The Economic Coordination Committee of the Cabinet’s approval of new pricing for Qadirpur gas field brought some fresh buying in Oil and Gas Development Company as well.The KSE-100 Index edged higher by 0.12%WoW to close at 16,865 points on third week with average daily volumes clocking in at 138mn shares, up 2%WoW. While the market witnessed profit taking on Monday following absence of any positive surprises in the monetary policy and some law & order concerns in Karachi, it recorded modest gains across the rest of the week. Key data releases during the week included a sizeable Current Account deficit of US$638mn in Nov’12. Despite this, the PKR managed to recover vs. the US$ (after sliding by 1% last week) with the SBP urging exchange companies to take appropriate measures. Within our coverage cluster.KSE 100 index inched closer to the 17,000 points mark closing at 16,943 points on last week of the month of December, up 0.46%WoW. Traders consolidated gains on Thursday as the year draws to a close, however the market picked up again on Friday continuing its push towards the 17,000 points psychological mark. Average daily turnover improved slightly to 141.07mn shares up 1.97%WoW with trading dominated in the 2nd and 3rd tier stocks.

he lure of success, and winning medals at global events, has been inducing athletes everywhere to indulge in malpractices that eventually lead to disgrace for them and their nations – a tendency that

was at its peak at the Athens Olympics in 2008 but, hopefully, will show a downward trend in coming years.The 2008 Athens Olympics witnessed a record – the highest- ever number of failed dope tests. A hefty number of athletes (105) failed their dope tests. Thereafter, it was decided by the International Olympic Committee (IOC) to store samples of athletes’ blood for a period of 8 years, in deep freezers in the basement of its Anti-doping Laboratory in Lausanne. Although at the 2012 London Olympics, there was a visible decline in this trend, it nevertheless continues. On December 6, in its official announcement on this subject, IOC disclosed the names of some medal winners at the London Olympics, who have been disqualified, and will lose their medals. After the London Olympics, IOC asked its laboratory in Lausanne to re-analyze the samples taken at the Athens Olympics. That exercise led to findings that will deprive these athletes of the medals they won at the 2012 London Olympics. Initial IOC announcement on the issue contains the names of 4 athletes, to which a fifth name might be added later on.Ukraine's Yuri Belonog stands deprived of his ‘Shot Put’ gold medal, Belarus' Ivan Tikhon of the silver medal in ‘Hammer Throw’, and Irina Yatchenko of Belarus and Russia’s Svetlana Krivelyova lost their bronze medals in ladies’ ‘Discus and Shot Put Throw’, events. Consequently, those next in line became entitled to these medals. In this lucky line-up, however, there are two athletes who won’t benefit: Tikhon, who was stripped of his bronze from the 2008 Athens Olympics for failing the dope test, and the Belarusian Nadezhda Ostapchuk. Ironically Ostap-chuk was disqualified earlier this year despite winning a gold medal in the ‘Shot Put’ event in London Olympics for testing positive in the banned anabolic agent metenolone, and she is now serving a one-year ban.That fifth athlete, who too may lose the Olympic medal, was among winners at the 2004 Olympics, but the name of that athlete will be revealed later because of a delay in the proce-dure in conducting tests of that athlete's sample. This event is a stern warning for athletes – that an athlete can be caught for taking prohibited energizers even after 12 years.

Another important chapter of the post-script of the London Olympics is the exposure of shareholders in the mega blackmar-keting of the tickets the shocking aspect whereof is that it impli-cates six top Olympic officials from four countries, who supplied Olympic tickets for black marketing. Initially, black-marketing of London Olympic tickets was detected by a UK-based newspa-per that shared its findings with IOC’s Ethics Commission. The IOC report released to the media on December 5 accused the President and Marketing chief of the Greek National Olympic Committee (NOC) of breaching the IOC code of conduct, and of “tarnishing the reputation of the Olympic movement.” The President and Secretary General of Malta's NOC were also implicated in this scandal besides the president of Serbia's NOC, and the Secretary General of Lithuanian’s NOC. The IOC, however, said that these six office bearers can’t be ‘sanctioned’ under the rules. "The scope of the competence of the code of ethics of the IOC allows the IOC to take an action against the body of the national committee but, due to legal reasons, we have no authority over the individuals,” was the explanation offered by the IOC President Jacques Rogge. Realizing that such an explanation won’t be acceptable to the media, he went on to say that he too thought a change in the ethics code could be made “but [for now] we have to respect the restrictions of the rules we have set."The IOC President urged the NOCs, as well as individuals involved in the crimes committed by them in the London Olym-pics "to take appropriate measures." He then went on to warn the involved countries (and all those planning to commit crimes at the Rio Olympic games) of the possibility of being refused accreditation to future Olympic games and related events. This was evident from the fact that, to avoid a repeat of the London scandal, IOC promised to overhaul its system of allocating tickets for the Olympic Games to be held in Rio in 2016.The involvement of high officials of the national Olympic outfits in crimes of this or, for that matter any sort, must not be overlooked because this could encourage more such crimes. What is worth watching is the profile of the actions the govern-ments of the countries involved in the reported crimes, take against their NOCs. Indications – the sort provided by suspen-sion of India’s Membership of the International Boxing Asso-ciation on charges of “manipulating” the elections of its national boxing federation – do not give the impression that strong corrective actions are likely.That said the issue that deserves the attention of the IOC, and otherwise well regulated British NOC is that, in spite of their roles in organizing the London Olympics, crimes were commit-ted. How could top officials of NOCs of IOC member coun-tries manage to commit those crimes? Was it because of weak administrative systems of the IOC, or due to excessive freedom allowed to the NOC executives in the name of protocol? The IOC has a bigger role in this gaffe; it needs to go beyond holding out mere threats.

T

SPORTS

Aftermath of theLondon Olympics

The winners at London Olympics who will lose their medals


At PMEX, gold prices fluctuated between $ 1,538.7 – 1,790.9 per ounce in the year, 2012. Where as traded volumes

Palm oil notched its worst annual perfor-mance since the financial crisis in 2008, losing more than one-fifth, mainly because of higher ending stocks news for Malaysia, though the losses were curbed by expecta-tions that heavy rains in the world's No.2 producer may disrupt production and bring down record high stocks. In domestic market, a downward trend in prices was witnessed over the year, 2012, except first quarter. Maximum price Rs 5,385 was in the month of April while Minimum price was Rs. 4,025 per 37.324 kg in October. A drop of 7.50 % was observed in prices in domestic markets.

E�ective communication has always been regarded as essential and important. Especially in the present era of information over-load, importance of e�ective communication has increased manifold. Writing is an Art and an essential part of e�ective com-munication. The ability to think creatively and write clearly, con-cisely and convincingly is not a closed preserve of some selected individuals or groups of individuals. This may come to anyone, anywhere, anytime. If you have original ideas and wield a facile pen, you are most cor-dially invited to use it for writing research papers and articles on topical subjects for Value Chain, a monthly publication. The magazine covers Global & National Economy, Politics, Bank-ing & Finance, Agriculture, Trade & Industry, Social Issues besides Art & Literature, History, Science, Games & Sports, Book Review etc. – subjects that will be of interest to any reader, no matter how intensely he or she may be involved in economic matters and issues.

To contact us dial 021-35293371-72 Or Type us on [email protected]

INVITATION TO WRITERSINVITATION TO WRITERS

Chief Editor





fter 2007, the Pakistanis have virtually stopped remembering Mirza Ghalib on his birthday because it coincides with the death

anniversary of Ms Benazir Bhutto. That’s the impression one gets each year since 2007. This year too no TV channel thought it fit to spare a few minutes for Ghalib although, historically, he was one of the greatest visionaries that the Indo-Pak sub-continent was blessed with, and not surprisingly, forgotten as well.December 27, 2012 marked the 215th birthday of this great visionary about whom there is consensus that he never had formal education. Given this educational background, the grasp he had over Persian and Urdu and his command over theology, philosophy, ethics and history, amaze his critics. Ghalib solved this puzzle and also proved his impeccable integrity in his following couplet:

Aatey hain ghaib se yeh Mazameen khayal meinGhalib sareer-e-khama nawa-e-sarosh hai

By claiming no praise for himself for all the beauty, realism, and the timelessness of his poetry, and honestly assigning it to the Creator, he sets a magnificent example of integrity and selfless-ness. What he concluded about human nature, its intellectual reach, and its piety and integrity is spelled out beautifully in the following couplet:

Bazeecha-e-itfal hai dunya mere aageyHo ta hai shab-o-roze tamasha mere aagey

His vision of the future and understanding of man’s nature and his failings, render his poetry timeless. Just look at the way his poetry describes today’s chaotic scenario as it did hundred and fifty years ago after the great ‘Indian mutiny’:

Koi ummeed bar nahien aatiKoi soorat nazar nahien aati

Aagey aati thi haal-e-dil pe hansiAb kisi baat par nahien aati

Vision wasn’t just a part of his poetry; it manifested itself in practical ways as well, the most significant instance thereof being the way he guided Sir Syed Ahmed Khan to set up a place of learning for the coming generations, to let them acquire a grasp over modern sciences, the deficit of which resulted in the Indians staying far behind the West in every field. He realized it on his visit to Calcutta after the fall of the Moughal empire, where he saw how modern inventions –electricity, steam boats, telegraph, and modern weaponry– had helped the English become the greatest imperial power of that time. Convinced by Ghalib about this undeniable need, Sir Syed, a disciple of Ghalib, made spread of knowledge the aim of his life. After successfully turning Aligarh’s Islamia college into a University

–largest to-date anywhere –Sir Syed would often say how he wished Mirza Sahib was alive today to see that his disciple had fulfilled the promise he had made to his guide–Mirza Ghalib. The role this university played in awakening India’s Muslims and in the creation of Pakistan is no secret. Creation of Aligarh University was the most important event for Indian Muslims because it triggered among them a desire to not just acquire modern knowledge but to become a partner in the evolving world. This quest led many of them to rise to places of eminence, and leave their mark on the pages of history and the man who put them on this elevated track–Sir Syed–owed his grand vision to the master visionary Mirza Ghalib; it is this great attribute that places Ghalib ahead of all his contemporaries. How Ghalib challenged the

Muslims to rise is reflected in a remarkable couplet that also summarizes in a single line the great event of Meraj-Nabvi. Ghalib says:

Us ki ummat mein hun maien, merey rahain kayun kam bundWastey jis Sheh key Ghalib gumbad-e-be-dar khula

This priceless couplet is, in fact, a challenge for the Muslim ummah because it reminds them that they are the followers of the Guide for whom even skies had to part, and make way (the briefest yet the most beautiful reference to Meraj). Should the followers of a Guide like the Prophet (PBUH) find anything an obstruction in their march towards salvation? It is a pity that the Muslim ummah never reflected on this great event (Meraj), and the inspiring message it holds out for the ummah–a refusal to stay behind in any field that promises human well being and emancipation.In spite of being what he was, Ghalib would very humbly and honestly define his place. He recognized the supremacy of the greats like Rumi, Saadi, Hafiz, Jami and Mir Taqi Mir by claim-ing that he was only ‘different’, which he indeed was, by saying:

Hain aur bhi duniya mein sukhanwar bohat achcheyKehtey hain ke Ghalib ka hai andaz-e-bayan aur

The romantic aspect of his poetry too is unique; at times, he went about describing the frustrations of his beloved as well in remarkably beautiful styles. For instance:

Kabhi neki bhi us ke jee mein gar aa jaye hai mujh seJafayein kar ke apni yad sharma jaye hai mujh se

Ghalib died in a state of abject poverty; the last person to meet him, and record it was Khawja Hassan Nizami. Ghalib denied being a wali. But the fact that he left a treasure of wisdom for mankind’s lasting good and died of starvation, suggests he may be a wali, for that’s how walis live and leave a legacy that keeps enriching people for years to come.

Feedback Form

Personal Details

First Name:

Company Name:

Address:

Telephone:

Email:

Poor1 2 3 4 5

Average Excellent

Mobile:

Fax:

Postcode:

Last Name:

Job Title:

City:

Design / Presentation of the Magazine:

Easy to read:

Contents:Articles on Economy:

Articles on Banking & FinanceArticles on Politics

Research Articles

Our Regular Features

Industry Coverage:

What else would you like to see in the next edition of “Value Chain”?

Comments

Fatima Khalid Publications (Pvt) LimitedRoom No. 612, 6th Floor, Clifton Center, Khayaban-e-Roomi, Clifton, Karachi.

Ph: 021-35293371-72Website: www.valuechainmagazine.com

“Value Chain” has successfully completed the �rst year of its publication. This has been possible due to encouragement received from our readers. We thank them all. During the last one year, we have tried to address topics and issues that are of common inter-est to the readers. For further improvement of the magazine we need suggestions on what our valued readers would like us to incorporate in the magazine. We shall be grateful if this feedback form is completed and returned to us at the earliest.

Chief Editor

ourism is a booming industry worldwide. It is one of the six key locational factors for a country’s image, the other five being exports, people, governance, cultural and heritage, and investment & immigration. Accord-

ing to World Travel and Tourism Council, in 2011, there were over 983 million international tourist arrivals worldwide, repre-senting a growth of 4.6% when compared to 940 million in 2010. It has an exceptional cultural diversity, encompassing the many monuments, historic towns, gardens, stately homes and castles, cathedrals and churches, industrial monuments, millions of dancing, musical and artistic events, more than 6000 museums, over 360 public and private theatres, some 12 250 public festivals and a number of UNESCO World Heritage Sites. Germany is a land of dense forests and mountains, fairy-tale castles, medieval villages and festivals. The country has some-thing to appeal to almost every tourist, ranging from historic sites and museums to river cruising; and from Alpine skiing to shopping and dining. It even boasts a few seaside resorts along its Baltic and North Sea coastline. Most of Germany's tourist hot spots are centered around areas of outstanding natural beauty.The countryside has a pastoral aura, while the cities exhibit both a modern and classical feel. The most visited tourist regions in Germany are the East Frisian and North Frisian Islands, the Baltic Sea coasts of Holstein and Mecklenburg-Vorpommern, the Upper Middle Rhine Valley, the Bavarianand Black Forest, and the Bavarian Alps. Top Tourist Attractions in GermanySince reunification of East and West Germany into a single entity, the country has gained a higher profile as a travel and

tourism destination. Many new squares and avenues have been constructed while the city's old town areas are also beautifully preserved. Notable landmarks include the Brandenburg Gate and Checkpoint Charlie, the Berlin Television Tower and Char-lottenburg Palace. Berlin is a multi-faceted city and home to the arts and political scene. For nature lovers there are attractions such as the Botani-cal Gardens, Berlin Zoo and the Sea Life aquarium while cultural tourists can find more than 180 museums and galleries. This is also a good shopping venue, with designer boutiques and shopping malls. Some of the worth seeing places in Berlin are Pergamon Museum, Berlin Wall, and Gendarmenmarkt. Other popular cities in Germany include Frankfurt, Munich, Hamburg, Cologne, Potsdam, Dusseldorf, and Stuttgart each of which has its own unique character. Nature lovers will find a world of possibilities in Germany's great outdoors; there is no shortage of outdoor adventures to be had in Germany. The country is well set to help visitors enjoy the landscape, with great walking areas to appeal to hikers in summer. In winters, skiers can take advantage of the numerous ski resorts. Frankfurt: Frankfurt is the main commercial, financial, and transportation hub in Germany and an industrial and financial metropolis. It is a gateway to many international tourists coming to Germany. Modern high-rises reflect post war development while the restored Old Town still attracts tourists. Those spend-ing time in the city, take a stroll through the Museum District, home to a number of interesting museums, or wander past the landmark Römer, which comprises the Old Town Hall and the New Town Hall.

ASTROLOGY

Your HoroscopeJanuary 2013ARIES: Your ruling planet Mars' stay in 11th house of birth chart will bring accomplishment for successful career and friendly relations towards friends. Up to 19th January business matters will prove beneficial, Sun will make move in 11th house and after 20th January it will get you good reputation in your relative field. Jupiter's presence in 3rd house will enhance interactions with members of your family. On 1st January Mars-Uranus sextile will improve your technical abilities and you will struggle for personal goals to change your standards. Under the influence of Mars-Jupiter trine you will succeed in achieving positive results for the struggle made. On 8th January, Mars-Saturn square will put an end into important problems; you will be able to control your passions and anger.

TAURUS: Your ruling planet Venus' stay in 8th house up to 9th January will keep your attention focused towards inheritance matters and lawful activities. From 10th to 31st January, you will be desirable for foreign studies and visits. Jupiter in money house will improve financial status and Saturn's presence in 7th house will make you attentive towards domestic issues and matters. On 10th January, Venus-Neptune sextile will engage you in love affairs. On 13th January, under the influence of Venus-Uranus conjunction, unnecessary thoughts may grasp you, so be calm! Under the influence of Venus-Pluto sextile, you may have some differences with others. On 17th January, under the influence of Venus-Saturn sextile, you will take control over your problems through diplomacy. Important business deals will be signed.

LEO: Your ruling planet Sun's stay in 6th house, from 1st to 19th January, will influence your working status; your sub-ordinates will honor you in many respects. From 20th to 31st January, Mercury in 7th house will influence your domestic life and you will stand benefited. Jupiter in 11th house will create in you desire for true friends. On 18th January, Sun-Mercury conjunction will strengthen mental abilities to fight for your benefits. On 25th January, Sun-Uranus sextile will enhance your interest in creative and co-operative matters. On 26th January, Sun-Jupiter trine will have negative impact on your spiritualism and self-confidence. You may take risks to achieve your goals. On 31st January, Sun-Saturn square may develop frus-tration due to over-expectations from others but sincere friends will be a cause of mental peace.

VIRGO: You will be in romantic mood due to your ruling planet Mercury’s stay in 5th house from 1st to 19th January. From 20th to 31st January, Mer-cury in 6th house will bring you successful career. From 1st January, under the influence of Mercury-Neptune sextile, your creativity will improve and yield useful results. Your dreams may come true. On 3rd January, Mercury- Uranus square may affect your relations due to resistance from others. On 6th Janu-ary, Mercury-Pluto conjunction may obstruct expres-sion of your feelings. On 7th January, Mercury-Saturn sextile will make you strong enough to under-take your responsibilities. On 18th January, Sun-Mercury conjunction will induce consistency in thoughts which will prove valuable.

CANCER: Your ruling planet Moon’s stay in money house will bring you spiritual wealth on 20th and 21st January. From 1st to 9th January, Venus in 6th house of birth chart will influence business matters and your status improvement. From 10th to 31st Janu-ary presence of Venus in 7th house may get you pros-perity in domestic life. Jupiter in 12th house will influ-ence financial issues and will make you attentive towards your routine of siblings and romance; so be careful! On 4th January, Mars-Jupiter trine will influ-ence business and inheritance issues; jealous people will get away! On 8th January, Mars-Saturn square may upset romantic and domestic life but be social! On 23rd January, Mercury- Jupiter trine will bring happiness in literary terms; it will strengthen your relations with your family.

GEMINI: Your ruling planet Mercury's stay in 8th house will bring prosperity in domestic life. Whereas, from 20th to 31st January, Mercury in 9th house will bring educa-tional facilities and desire for foreign visit may come true. On 1st January, Mercury-Neptune sextile will make you confident enough to attain your goals, mental faculties will improve! On 3rd January, Mercury-Uranus square will be challenging for solving the issues. On 6th January, Mercury-Pluto square may engage you in psychological problems, but positivity will dominate! On 7th January, Mercury-Saturn sextile will bring toughness in thoughts! This seriousness of yours will help you overcome the domestic problems. On 18th January, under the influence of Sun-Mercury conjunction, you will be able to shape yourself according to terms and conditions. From 22nd to 23rd January, you will have new experiences and positivity. On 25th January Mercury-Saturn square will make you careful in handling the problems!

by Dr. Aameer Mianwww.astrohope.com




Munich: The centuries old city of Munich is a mix of old and new, where various architectural styles co-exist. The vibrant cultural scene is often compared to that of Berlin. The city was almost completely destroyed in two world wars, yet it has managed to recreate much of its folkloric, Bavarian past. Bavaria: The city is a harmonious blend of the traditional and the modern. Located in southeastern Germany, Bavaria is one of the oldest states in Europe. It is a mixture of beautiful coun-tryside, towering Alpine mountains, vibrant cities and medieval villages. Blue skies, crystal-clear lakes, mystical forests and snow-capped mountain peaks, a wealth of cultural attractions, outdoor activities and relaxation fill the visitors with inspiration and passion for life. Neuschwanstein is situated on a rugged hill near Füssen in southwest Bavaria. Neuschwanstein is one of the most popular tourist attractions in Germany. This fairytale castle was the inspiration for the Sleeping Beauty castles in the Disneyland parks.The state contains two UNESCO World Heritage Cities, Regensburg and Bamburg, as well as more than 70 castles, fortresses and palaces.The Rhine Valley: The Rhine is Germany's principal and longest river. This is a top class river cruising destination. Rhine Valley is also an excellent venue for walking and cycling vacations.Hamburg: Hamburg is a harbor city. Its port is the third largest in the world, after London and New York. A stroll along its many waterways and canals is refreshing and fascinating.

Miniatur Wunderland, Hafen Hamburg and Park Planten un Blomen are some of the places worth not missing. Cologne: This is a historical place in Germany which has 2,000 years of history. Culture is an essential feature of the buzzing metropolis of Cologne. Architectural treasures abound with old churches, museums, and halls. The visitors here will find every-thing from Roman towers to Gothic churches to fine examples of modern architecture. Cologne Cathedral (Kölner Dom) has been Cologne’s most famous landmark for centuries. Rügen Cliffs: The Rügen Cliffs are located in the Jasmund National Park in the northeast of Rügen Island in the Baltic Sea off the coast of Mecklenburg-Western Pomerania. Rügen, Germany’s largest island, has been one of Germany’s most popular travel destinations for centuries. The 118 meter (387 feet) high Königsstuhl (king’s chair) is the most majestic part of the cliffs. The undisturbed forests behind the cliffs are also part of the national park.Brandenburg Gate: The Brandenburg Gate is the only surviving city gate of Berlin and symbolizes the reunification of East and West Berlin. Built in the 18th century, the Bran-denburg Gate is the entry to Unter den Linden, the prominent boulevard of linden trees which once led directly to the palace of the Prussian monarchs. It is regarded as one of the most famous landmarks in Europe.The Government in Germany is set about making efforts for facilitating and strengthening domestic tourism, alongside climate protection measures.

SAGITTARIUS: Your ruling planet Jupiter-during the entire month will be in ascendant position. This situation will continue up to 31st January and will produce positive results in domestic matters; you will gradually get benefits in business matters. Venus in ascendant position may influence romance. Presence of Saturn in 12th house will affect your financial status; consult with experienced persons in business matters. Be careful of jealous people. On 4th January, Mars-Jupiter trine will enhance your self-confidence. On 23rd January, Mercury-Jupiter trine may cause you to take valuable decisions according to plans. On 26th January, Sun-Jupiter trine may create in you desire for recreation.

CAPRICORN: Your recognition will improve within the circle of friends due to stay of Saturn in 11th house

AQUARIUS: Your ruling planet Saturn in ascendant position will bring consistency in career. Your subordinate ruling planet Uranus in 3rd house will make you avoid foreign visits. On 1st January, Mars-Uranus sextile may make you conscious about personal life. On 7th January, Mercury-Saturn sextile will induce seriousness in routine. You may control your negative thoughts with sincerity with relatives under the influence of Mars-Saturn square on 8th January. On 13th January Venus-Uranus square may cause frustration but be calm which will prove fruitful afterwards. On 17th January, Venus-Saturn sextile may help you act diplomatically in your dealings with others to achieve the desired benefits. On 25th Janu-ary, Sun-Uranus sextile will enhance creativity for practical results. On 25th January Mercury-Pluto square may hinder in dealings due to narrow mildness. On 31st January Sun-Saturn square may require you to be self-confident; so ask for elderly help to avoid any unnecessary tensions.

PISCES: Your ruling planet Jupiter in ascendant position during the entire month, in 4th house of birth chart, will change its condition by 31st January when it will make you divert your attention towards domestic life and your time may be given to relatives for their betterment. Your sub-ordinate ruling planet Neptune in ascendant position during whole month will help you in finding solutions to your problems. On 1st January, Mercury-Neptune sextile may turn your dreams true and creativity will enhance. On 4th January Mars-Jupiter trine may bring you success and self-confidence. Positivity will be beneficial. On 10th January Venus-Neptune sextile will influence romance, creativity and co-operation with emerging desires. On 23rd January Mercury-Jupiter trine will represent complete description of circumstances to strengthen your thoughts and educational field will get you compatible career. On 26th January Sun-Jupiter trine will influence your built-in confidence, passions for success and sparkling changes in status. Take care of your health!

of your birth chart; you may have to struggle to achieve personal goals. From 1st to 19th January, Sun-Mercury conjunction will evolve mental faculties but stay calm because sudden gain of momentum and anger may prove harmful. From 1st to 9th January, Venus in 12th house will effectively protect you against ill effects of jealousy and romance may domi-nate in mood from 10th to 31st January under the influence of ascendant Venus. On 7th January, Mercury-Saturn sextile will help you in resolving issues. On 17th January, Venus-Saturn sextile may cause you to adopt specific strategy for valuable deci-sions. On 25th January, Mercury-Saturn square will include tensions in relations. So be careful! On 31st January you have to find out solutions to your impor-tant problems with your limited resources.

SCORPIO: Your ruling planet Mars' stay in 4th house will divert your attention towards inheritence matters. Presence of ascendant Saturn may make you comfortable concerning domestic and financial issues. From 1st January, Mars-Uranus sextile may require struggle for personal achievements. On 4th January, Mars-Jupiter trine will influence positivity in mood. On 6th January, Mercury-Pluto conjunction may add to your leaning attention towards opposite sex. On 8th January Mars-Saturn square may interrupt your routine by unnecessary tensions. Be patient! On 17th January, Venus-Pluto conjunction will effect nega-tively in co-operative affairs. So be polite!

LIBRA: Your ruling planet Venus in 3rd house will strengthen your family relations from 1st to 9th Janu-ary. From 10th to 31st January, Venus in 4th house will bring prosperity from father. Presence of Saturn in money house will make you careful in financial matters and you will enjoy domestic life. From 20th to 31st January, presence of Sun-Mercury in 5th house will induce romantic taste in life. Presence of Jupiter in 9th house will make you desirable for foreign stud-ies. On 10th January, Venus-Neptune sextile will influ-ence romanticism psychologies and you may get success in accordance with your struggle. On 13th January, Venus-Uranus square will cause uncertainty in thoughts and you may get confused. On 17th January, Venus-Pluto conjunction will help you attain calmness in co-operative matters. On 20th January, Venus-Saturn sextile will also strengthen your decision -making abilities.

On 22nd January, Mercury-Uranus sextile will favor your understanding towards technical issues. On 23rd January you will get involved in planning and educa-tional fields under the influence of Mercury-Jupiter trine. On 25th January, Mercury-Saturn square may hinder your activities due to delayed decisions and confusions.


Ten ways to avoid intricacies with your visa applicationDisclaimer: Although the information has been prepared with utmost care, we cannot accept any responsibility for inaccuracies contained herein.

Apply well in advance!Make your online appointment under http://service.diplo.de/rktermin/extern/choose_realmList.do? locationCode=isla&request _locale=en .Usually, online appointments are available two to three weeks later. The application procedure takes about two more weeks. There-fore, start at least 6 weeks before you intend to travel. In case your application cannot be processed for certain reasons or in case you cancel your appointment, the online appointment system does not allow you to make a new appointment for a period of two weeks. This means, your application procedure might be delayed with another 5 - 6 weeks. Thus, we recommend to apply three months in advance (if possible).

Don’t try to outsmart the online appointment system!Please use your current passport number only and write your name exactly in the way it is written in your passport. Any attempt to make more than one appointment with different passport numbers will lead to the rejection of your application. Please also ensure that your passport number, your e-mail address, etc. are filled out correctly, otherwise you may lose your appointment.

Ensure that your documents are complete!Visit http://www.pakistan.diplo.de/envisa, choose the correct type of visa (business, trade fair, visitor, etc.), print out the list of docu-ments available as a download and tick off each and every document. For each documents, important hints are given on the right side of the list.

Submit a correct travel insurance!Some insurance policies mention Germany or another Schengen country only. Please make sure that explicitely all (!) Schengen States are covered by the insurance.

Apply at the German Mission which is competent for your place of residence!Residents of Sindh and Balouchistan need to apply at the German Consulate General Karachi. Residents of the other provinces and areas in Pakistan should apply at the German Embassy Islamabad.

Apply at the Embassy/Consulate of the country which is your main destination!Don’t go for visa shopping, that means don’t apply at any Schengen Embassy/Consulate of your choice, but at the Embassy/ Consulate of the country which is your main destination. Your main destination is the country in which you stay longest or the country your visit to is most important. If your stay in all Schengen countries is of the same duration or importance, apply at the Embassy/Consulate of the country you enter first.

Come to the visa section in person (unless your are exempted)!Only those Travellers- who have been in the possession of at least two valid Schengen visa (category C, issued by any Schengen state) within the past 24 months and have used them in a lawful manner or- who have been in the possession of a Schengen visa with a validity of a year or several years in the past (24 months time limit does not apply in this case) and have used them in a lawful manner are exempted from a personal appearance at the visa section. They can send a person of trust with their application form and the required documents.

Don’t use the “services” of any persons outside the visa sectionPersons outside the visa section offering their services for the visa procedure neither work for nor work with the consent of the visa section. In case these persons do promise any favour regarding the issuance of a visa, please report them to the visa section in writing.

Check your personal data on the visa sticker!After receiving your visa, you should examine all data very carefully. If a mistake in the spelling of your name or of your passport number occurs, it could cause difficulties at the border.

Stick to the maximum of days permitted!Your visa sticker indicates a number of days that you are permitted to stay within the Schengen States (up to 90). This number always refers to a six-months-period starting from the date of issuance. Don’t stay more days within this period, otherwise your name will be registered for refusal of future visa applications.

QUOTES

“Today, we are pitched against an amorphous enemy when the conventional threat has also grown manifold.”Pakistan Army Chief, General Ashfaq Pervez Kayani stated while addressing the 98th Midshipmen Commissioning term and 7th SSC Officers class upon completion of rigorous training, on 28 Dec.

“We cannot and would not allow polio to wreak havoc on the lives of our children.”Pakistani Premier Raja Pervez Ashraf declared while chairing a meeting of Polio Task Force at the PM’s Secretariat on 18 Dec.

“How long you will go on killing innocent people? … if one Malala will be killed, thousands will replace her. One Benazir was killed; thousands have replaced her.”Chairman PPP, Bilawal Bhutto Zardari said while starting his political career at Garhi Khuda Baksh on 27 December on the occasion of the fifth anniversary of his mother Benazir Bhutto’s assassination .

“I want to tell them and the nation that while she may have lost her battle for life, it is up to us all to ensure that her death will not have been in vain.”Indian Premier Manmohan Singh, condoles the grieving India nation about the death of a 23-year-old medical student who was gang-raped and battered in a moving bus in New Delhi on 16 Dec.

"Spain's economy will remain in recession for some time, but we expect it will improve in the second half of 2013.”Spanish Prime Minister Mariano Rajoy said during a news conference at the Moncloa Palace in Madrid, 28 Dec.

“These tragedies must end, and to end them, we must change.” US President Barack Obama stated on 16 December while condoling the US nation on school shooting in Connecticut that killed 27 people, including 20 children.

“A strong economy is the source of Japan’s national strength. Without a strong economy, Japan will not achieve fiscal recon-struction and have a future.”Japan’s new elected Prime Minister Shinzo Abe stated in his first address to the nation, 26 Dec.


ENTERTAINMENT

Review

Bilbo Baggins is swept into a quest to reclaim the lost Dwarf King-dom of Erebor from the fearsome dragon Smaug. Approached out of the blue by the wizard Gandalf the Grey, Bilbo finds himself joining a company of thirteen dwarves led by the legendary warrior, Thorin Oakenshield. Their journey will take them into the Wild; through treacherous lands swarming with Goblins and Orcs, deadly Wargs and Giant Spiders, Shapeshifters and Sorcerers. Although their goal lies to the East and the wastelands of the Lonely Mountain first they must escape the goblin tunnels, where Bilbo meets the creature that will change his life forever ... Gollum. Here, alone with Gollum, on the shores of an underground lake, the unassuming Bilbo Baggins not only discovers depths of guile and courage that surprise even him, he also gains possession of Gollum's "precious" ring that holds unexpected and useful qualities.

Django Unchained stars Jamie Foxx as Django, a slave whose brutal history with his former owners lands him face-to-face with German-born bounty hunter Dr. King Schultz (Christoph Waltz). Schultz is on the trail of the murderous Brittle brothers, and only Django can lead him to his bounty. Honing vital hunting skills, Django remains focused on one goal: finding and rescuing Broomhilda (Kerry Washington), the wife he lost to the slave trade long ago. Django and Schultz's search ultimately leads them to Calvin Candie (Leonardo DiCaprio), the proprietor of "Candyland," an infamous plantation. Exploring the compound under false pretenses, Django and Schultz arouse the suspicion of Stephen (Samuel L. Jackson), Candie's trusted house slave.

Django Unchained Directed bySam Mendes

The Hobbit Directed byPeter Jackson

Directed by Christopher McQuarrie

Directed byTom Hooper

Directed byAndy Fickman


Compiled by Ali Siddique Dadi

TOP 10 HOLLYWOOD MOVIES OF 2012

0102030405

06 07

08

09

10

Marvel's The AvengersThe Dark Knight RisesThe Hunger GamesSkyfallThe Twilight Saga:Breaking Dawn Part 2The Amazing Spider-ManBrave

The Hobbit:An Unexpected JourneyTed

Madagascar 3:Europe's Most Wanted

Joss WhedonChristopher NolanGary RossSam MendesBill Condon

Marc WebbMark Andrews &Brenda ChapmanPeter Jackson

Seth MacFarlane

Eric Darnell, Tom McGrath, Conrad Vernon

April 11July 16

March 12Oct23

Nov 14

June 13June 10

Nov28

June 29

June 6

$623,357,910$448,139,099$408,010,692 $289,600,000$286,433,000

$262,030,663 $237,259,580

$228,693,000

$218,665,740

$216,391,482

Rank Movies Director R. Date C. Gross

Skyfall, The Hobbit and The Twilight Saga: Breaking Dawn Part 2 arestill running in theatres and hence, their �gures will increase.

Coming Attractions

n December 25, arch rivals India and Pakistan faced each other at Bangalore’s M. Chinnaswamy Stadium, after 5 long years to play a cricket series. After winning the toss captain Mohammad Hafeez

opted to field first. Aggressive bowling by over seven feet tall Irfan–tallest cricketer in the world–forced Indian openers Gautam Gambhir and Ajikya Rahane to play cautiously but gradually they enhanced the run rate and gave India a start of 77 runs in 66 balls. Then Rahane was dismissed by leg-spinner Shahid Afridi for 42. Soon, Gambhir was run out by a targeted throw from Sohail Tanvir. Dismissal of the openers in quick succession triggered a crash of the Indian side forcing it to finish with a low total of 133 for 9. In effect, the other 7 batsmen could score only 56 runs in 54 balls, and only two reached double figures. For Pakistan, pacer Umar Gul got 3 wickets for 21, but most unluckily, missed a hat-trick, and Saeed Ajmal–the world’s best off-break bowler–bagged 2 for 25. Afridi and the debutant pacer Irfan–whose balling touched a peak of 146 km per hour– took one wicket each. Experts are of the opinion that on Chinnaswamy Stadium’s pitch, the safe score is 155 or 160 runs. Pakistan thus had an advantage, but while chasing India’s 133 runs, it started its innings in a disastrous manner, losing the first 3 wickets for a paltry 12 runs. Nasir Jamshed, Ahmed Shahzad and Umar Akmal simply couldn’t face up to remarkable swing bowling by Kumar. However, captain Hafeez, and former captain Shoaib Malik, batted sensibly (though they too had their uneasy moments) to repair the damage caused by the loss of 3 early wickets, and added 106 runs in the fourth wicket partnership to help Pakistan score 118 runs in 17 overs. But after scoring 61 in 44 balls, Hafeez was caught by B. Kumar off the bowling of Ishant Sharma. Kamran Akmal, in next, could not do much against Sharma’s splendid pace bowling, and was quickly back in the pavilion, but not before exchange of hot words with Sharma–a scene that should have been avoided even though Sharma was at fault. Kamran was fined 5 percent of his match fee, while Sharma was fined 15 percent. Earlier in the match, Sharma collided with Hafeez, and could have caused Hafeez to be run out, but it didn’t turn into a clash.But Malik stuck on with Afridi (who too wasn’t comfortable against Sharma’s pace bowling) to hit a match winning sixer after scoring his fourth T20 half-century, and remained not out on 57. Mohammad Hafeez, having scored 61 in 44 balls was declared the “Man of the Match”. The other peculiarity of the match was that both sides fielded debutant pacers– Bhubaneshwar Kumar in India’s side and Mohammad Irfan in the Pakistani team and both performed very well. But the fact is that in the T20 format, world’s top three bowlers are Pakistan’s Saeed Ajmal, Umar Gul and Shahid Afridi. This is Pakistan’s edge; but its batting remains unpredictable, which has the effect of passing the pressure on to its bowlers.

On December 28, Indian and Pakistani cricket teams again faced each other in Ahmedabad’s Sardar Patel Stadium, to play the second and final T20 match of their 2012 series. Pakistan won the toss, and opted to bowl first. This time it favoured the Indians. While the openers scored just 44 runs, in partnerships with Kolhi and captain Dhoni, Yuvraj Singh scored 72 runs in 36 balls (including 7 sixes, 3 against Saeed Ajmal in one over, which proved decisive) and helped India finish its innings with 192 for 5 wickets. Ajmal was hit for 42 runs in his 4 overs, but was allowed to complete his spell.Another odd decision of skipper Hafeez was to allow Sohail Tanvir go on bowling towards the end although he wasn’t in form, and was hit for 44 runs in his 4 overs. On top thereof, Hafeez bowled just one over and did not utilize the bowling talents of Shoaib Malik. The star bowler was Umar Gul who got 4 of the 5 Indian wickets for 37 runs. Saeed Ajmal bore the brunt of Yuvraj’s fury; the Indian hit four sixes off him with three of them coming in a row in the 19th over. The perfor-mance of the bowlers allowed India to score 192 for 5 and made victory a tough challenge for Pakistani batsmen, as proved by the subsequent events. In this context, it is worth noting that India posted their highest total against Pakistan in T20s, and Yuvraj’s career-best T20 knock was well-timed to lift India back to third place in the T20 ranking. Pakistan’s openers batted well to score 74 runs. Thereafter, skipper Hafeez and Umar Akmal scored 62 runs in just 5.3 overs but Shahid Afridi and Kamran Akmal didn’t stay with Hafeez for long, and could score 11 and 5 runs respectively, as the Indian bowlers regrouped to stage a brilliant recovery. A bigger oddity was that Shoiab Malik came in to bat after K Akmal and Afridi when just three overs were left.Indian pacer Ashok Dinda got three wickets for 36 runs; his spell included the crucial wicket of skipper Hafeez (who was able to score 55 runs of 26 balls), in the penultimate over to turn the tide in India’s favour. Besides skipper Hafeez, the openers Nasir Jamshed (41) and Ahmed Shehzad (31) made their contributions to Pakistan’s score of 181 for 7 wickets. Skipper Hafeez scored his back-to-back half century (which included 5 fours and 3 sixes) in 23 deliveries, with a hit past the bowler. At one stage it seemed that Pakistan was on course to cross India’s challenging total, but Dinda and Ishant Sharma kept their cool during the final overs to turn the match in India’s favour. Needing 20 runs off the final over bowled by Ishant Sharma, Umar Gul and Shoaib Malik could score just 8 runs much to the delight of the home crowd and skipper Dhoni whose leadership has been criticised after England defeated India 2-1 in the recent test match series. Besides, while India has been lifted back to the third place in the T20 ranking, Pakistan, which shot up to the third place after winning the first T20 match in the current series in India, has fallen to the sixth place. However the series with India ended 1-1.

ENTERTAINMENT

Review

Salman Khan is back as Chulbul Pandey in Dabangg 2, the second adventure in one of the most successful franchises of all time in Indian cinema. Chulbul Pandey is transferred and promoted to Kanpur. He is happily married with Rajjo. Kanpur witness a lot of criminal activities daily and kidnapping, rape and murders are done in broad daylight. The main antagonist/villain is Baccha Bhaiyaa, politician and a strong contender for the upcoming elections and Chulbul Pandey sabotages his political image by revealing his immoral activities to the public, media and police force.

Dabangg 2 Directed byArbazz Khan

Writer-director Reema Kagti and her script associate Zoya Akhtar have created an enigmatic screen cop for Aamir Khan. Aamir's uniformed avatar, Inspector Surjan Singh Shekhawat, is a bundle of bottled angst, is investigating the mysterious death of a filmstar, meets a sex-worker, while he faces some personal prob-lems psychologically. The mystery connects these people in a way that ultimately changes their lives.

Talaash Directed byReema Kagti

Directed byAbbas, Mustan

Directed byAshish R Mohan

Directed byVishal Bhardwaj


TOP 10 BOLLYWOOD MOVIES OF 2012

01

02

03

04

05

06

07

08

09

10

Ek Tha Tiger

Rowdy Rathore

Agneepath

Jab Tak Hai Jaan*

Dabangg 2*

Housefull 2

Bar�

Bol Bachchan

Son of Sardaar*

Talash*

Kabir Khan

Prabhudeva

Karan Malhotra

Yash Chopra

Arbazz Khan

Sajid Khan

Anurag Basu

Rohit Shetty

Ashwin Dhir

Reema Kagti

Action/Romance

Action/Drama

Action/Drama

Romance/Drama

Action/Drama

Comedy

Romance/Comedy

Action/Comedy

Action/Comedy

Mystery/Thriller

Aug 15

June 1

Jan 26

Nov 13

Dec 21

April 5

Sep 14

July 6

Nov 13

Nov 30

INR 190 Cr

INR 140 Cr

INR 120 Cr

INR 120 Cr

INR 119 Cr

INR 113 Cr

INR 110 Cr

INR 100 Cr

INR 105 Cr

INR 93 Cr

Rank Movies Director Genre R. Date C. Gross

*JTHJ, Dabangg 2, Son of Sardaar and Talash are still running in theatres and hence, its �gures will increase.

Coming Attractions

s the Pakistan-India ODI series came closer there were indications that Sachin Tendulkar–India’s as well as the cricketing world’s master batsman– was likely to be ignored by the team selectors. While he

still had several dedicated backers in the Board for Control of Cricket in India (BCCI), including the board’s president, N Srinivasan–but some in the higher echelons of the board thought it is time the 39-year old ‘great’ retires from cricket; they had valid reasons to suggest so, based on Tendulkar’s recent batting record in ODIs, as well as test matches.In the ten ODI matches he played in 2012, Tendulkar could average only 31.50 runs a match, with just one century–his 100th in tests and ODIs–that he scored in the match India lost to Bangladesh in the Asia Cup, and one half-century. The last ODI he played was in March against Pakistan, wherein he scored 52 runs off 48 balls. Thereafter, he had opted out of India’s next and last ODI series in 2012–the five-match tour of Sri Lanka in July-August. Since then, Tendulkar played in six test matches in which he scored a total of 175 runs (including one half-century) at an average of 19.44. In August, playing against New Zealand, he was bowled out for 19, 17 and 27, which was a shocking experience for his admirers. In the test match series against England that ended in December, he was once again out of form; all he could manage were 112 runs in six innings at an average of 18.66 runs. It was the third series over the last 18 months wherein he couldn’t score a century, which built the case for his taking retirement because, in both test matches and ODIs, he had been finding it difficult to face up to young bowlers. But the “un-droppable” Tendulkar finally forfeited his coveted place in Indian cricket, though he was eager and ‘available’ for the 3-match ODI series, to be played against Pakistan. What he was overlooking was that, in the process, very unwisely, he was damaging his otherwise great 23-year record as the top-ranking batsman in the world. The rumblings within BCCI about the champion batsman’s future, for the first time in over two decades, eventually did convince him to retire from the ODIs. It would be the first time in his 23-year career that he would miss an ODI series. Tendulkar’s retirement will be a great jolt for millions of his admirers, even though it is Tedulkar’s own decision; he was, without any doubt one of the master batsmen of all times, and set examples of what is good batting. Tendulkar’s retirement will make life difficult for the current BCCI selection committee since, after hosting Pakistan for 3 ODIs India will play 5 ODIs against England. But, India has many upcoming batsmen, though it will take them time to come close to Tendulkar. It is a tough challenge for them to play without him and the spirit he injected in the team.Tendulkar has retired from the ODI version of cricket, but the landmark he has left behind, will inspire batsmen for years to

come; to-date he is the world's top batsman in ODIs having scored 18,426 runs in 463 matches, at an average of 44.83 with 49 centuries. The batsman closest to Tendulkar is South African Jacques Kallis with a score of 11,498 runs that include 17 hundreds. Scoring 100s in ODIs isn’t an easy task; it calls concentration on and maximizing each scoring opportunity offered by the opposing side; he showed both. Given below are the highest scores of his ODI 463-match career:

Until early 2012, Tendulkar was batting in his usual style; he was able to score 113 runs in an ODI in 2012 and it seemed that age couldn’t wither him. This he had proved earlier as well by cracking a double century against South Africa in 2010. His was the first double-century in the ODI format of cricket, after as many as 2,961 matches had been played–the first being played well in January 1971–well before he had entered the world cricket arena. The records Tendulkar has set are gigantic despite his recent unim-pressive performance; age finally takes its toll on even the best; he is no exception to this rule. Tendulkar is known for his orthodox and unorthodox strokes, his flamboyance, and his exciting and aggressive stroke play that combined classical batting techniques with frequent pinches of smartly contrived aggression. But on the field, he never put himself before the team. In a book "Shane Warne's century", Warne remembered Tendulkar by saying that "the way he conducts himself, handles fame and everything that goes with being Sachin, is a great example for all sportsmen." Australia's Don Bradman, rated as the greatest test batsman ever, once said that Tendulkar's batting style reminded him of his own i.e. dominate and demoralise the opposing team. Indian legend Sunil Gavaskar–first batsman to score 10,000 test runs–says he was convinced that Tendulkar will achieve great-ness when he (Gavaskar) first saw him bat in the nets more than two decades ago. "It is hard to imagine any player in the history of the game who plays like the little champion. There is not a single shot that he can’t play." His peculiar style of batting was his only way of expressing arrogance; as a human being and a player, he has rarely been anything less than a Gentleman. All his admirers were used to seeing a smile on his face all the time, and a clearly visible commitment with which he spent every moment, while on the field; new cricketers have a lot to learn from this legacy.

“Impossible” by James Arthur has become the fastest-selling single of the year. The ‘X Factor’ winner's song sold a staggering 897,000 copies, putting James top of the charts one week after winning the ITV talent show. The song was written by Arnthor Birgisson and Ina Wroldsen, and produced in Sweden by Birgissons.

Impossible

Top Ten UK SongsRank Songs Singers Last Week Total Weeks

Impossible

Scream & Shout

Locked Out Of Heaven

The Power Of Love

Troublemaker

Stay

Diamonds

Beneath Your Beautiful

Gangnam Style

Little Things

01

02

03

04

05

06

07

08

09

10

James Arthur

Will.i.am Ft Britney Spears

Bruno Mars

Gabrielle Aplin

Olly Murs Featuring Flo Rida

Rihanna Featuring Mikky Ekko

Rihanna

Labrinth Featuring Emeli Sande

PSY

One Direction

NEW

NEW

02

01

03

NEW

05

04

09

06

NEW

NEW

05

05

04

NEW

11

08

13

05

Fevicol se from Dabangg 2 has all the ingredients fit for an item number: a catchy melody, quirky lyrics and a stunning item girl in the form of actor Kareena Kapoor dancing in the video. The song is sung by Mamta Sharma, who also sang Munni Badnaam Hui in the first part.

Fevicol Se

ENTERTAINMENT


SingerWill.i.am ft. Britney Spears

Scream & Shout

SingerBruno Mars

SingersRaghav Mathur, Shilpa Rao

SingersShreya Ghoshal,

Vishal-Shekhar, Udit Narayan

Locked Out Of Heaven

Radha

Rank

01

02

03

04

05

06

07

08

09

10

Songs

Fevicol Se

Ishq Shava

Radha

Long Drive

Dagabaaz Re

Hookah Bar

Pandeyjee Seeti

Matru Ki Bijlee KaMandola

Ishq Wala Love

Party On My Mind

Movies

Dabangg 2

Jab Tak Hai Jaan

Student of the Year

Khiladi 786

Dabangg 2

Khiladi 786

Dabangg 2

Matru Ki Bijlee KaMandola

Student of The Year

Race 2

SingersMamta Sharma, Wajid,Keerthi SagathiaRaghav Mathur, Shilpa RaoShreya Ghoshal,Vishal-Shekhar, Udit NarayanMika SinghRahat Fateh Ali Khan, Shreya Ghoshal, Shadaab FaridiHimesh Reshammiya,Vineet Singh, Aman TrikhaWajid, Mamta Sharma,Shreya GhoshalSukhwinder Singh, Ranjit Barot

Shekhar Ravjiani,Salim Merchant, Neeti MohanYo Yo Honey Singh,K K, Shefali Alvares

Last Week

01

02

0607

08

09

10

NEW

11

NEW

Total Weeks

03

08

12

04

05

06

05

NEW

15

NEW

Top Ten Music Chart Buster

n hockey’s Asian Champions Trophy tournament played in Doha in December, Pakistan broke the Indian hearts again within a month following its 3-2 victory over India for third place in the Champions Trophy played in Melbourne. On

December 27, Pakistan thrashed India 5-4 in a thrilling final at the Al-Rayyan Hockey Stadium. Pakistan’s victory was its revenge for its defeat against India in the inaugural edition of the event in Ordos, China, where India defeated Pakistan on penalties. This victory may appease the old Olympians.Asian Champions Trophy tournament was played by six top teams from Asia–Pakistan, China, India, Japan, Oman, and Malaysia. Earlier, in the tournament, Pakistan had defeated Oman 8-3 in their opening match, followed by a 5-2 win in their match against China, a 3-3 draw vs. Malaysia, and a 2-1 defeat against India–the team they defeated and clinched the bronze medal in the Champions Trophy played earlier this month in Melbourne. In the final pool match, Pakistan was able to defeat Japan 5-2, to set up a clash with India. While India won the silver medal, Malaysia clinched the bronze medal by beating China 3-1.Pakistan’s star player Shakeel Abbasi was injured during the match, and had to leave the ground but Mohammad Imran and Mohammad Waqas Sharif scored two goals each while Shafqat Rasool added one goal in a topsy-turvy match that saw both sides take the lead and relinquish it. After failing to score an equaliser in the first five minutes of the second-half, Rasool made it 2-2 in the 42nd minute. Just 6 minutes later, Imran’s flick made it 3-2. India levelled the score soon through Gurvinder Singh Chandi in the 55th minute but in the next 2 minutes Waqas put Pakistan up 4-3. India made it 4-4 through a penalty corner shot by Rupinder Pal Singh. In the final minutes the Indian team staged a walk-out after the referee turned down their appeal for a penalty corner but on their return, in the 64th minute, another penalty corner was awarded against India and Imran scored the winning goal and Pakistan once again became the Asian champion.

Hockey’s 2012 “Champions Trophy” tournament was held in Melbourne, Australia beginning December 1, and world’s top teams–Australia, Belgium, England, India, Germany, the Nether-lands, New Zealand and Pakistan competed for the top place. Pakistan’s hockey team finally broke its long spell of defeats in international competitions by winning a medal. The weak perfor-mance had caused a split in the players, as reflected by the stance of the PHF and of the ex-Olympians who believe that blackballing some of the good players for playing in India’s domestic hockey tournament last year, had weakened Pakistan’ hockey team. Although Pakistan won the bronze in Melbourne, winning it marked Pakistan’s re-entry into hockey’s top slot–something that was sought by admirers of the game for long. Pakistan played a total of 6 matches, lost 3, and won 3, but managed to qualify for the semi-finals. In its first match, Netherlands beat Pakistan 3-1, but in the next match, Pakistan was able to thrash Belgium 2-0. However, despite putting up a tough fight Pakistan lost to Australia 0-1. But in the next match on December 6, Pakistan made a resounding comeback; it won against Germany 2-1. But in the next match on December 8 Pakistan was the loser vs. Netherlands 2-5. Finally, Pakistan played its last match position on December 9, for the third against India, and won it 3-2 to take the bronze medal. Three-time Champions Trophy winner, Pakistan won its last medal at Lahore in 2004, where too it had won the bronze medal by defeating India. This time again it won the bronze medal by defeat-ing India. In this match Muhammad Rizwan Junior, Shafqat Rasool and Muhammad Ateeq succeeded in scoring one goal each, to defeat the Indian side. For India, V Raghunath and Rupin-der Pal Singh scored one goal each, through penalty corners. Although, Pakistan ended up with a bronze medal, the best part was that Shakeel Abbasi of Pakistan clinched the “Best Player of the Tournament” award for scoring the maximum number of goals.

AWAN TRADING CO (PVT.) LTD.

Awan Trading Co. is Pakistan based Coal trading entity which was incorporated in the year 2002. The company started its operation as an importing company and for the last two years it has also started supplying domestic coal (Pakistan coal). So far the company has imported and supplied 5 million tons of coal, from South Africa and Indonesia, to the cement factories.

This opportunity of supplying coal to cement factories was created due to their (Cement factories) shift from furnace oil to coal as the main energy fuel. Since then the company has been sincerely committed in its mission of supplying coal to factories as a source of energy. What you sell is important! So we source our Coal from best suppliers around the world. Develop-ing longterm relationships has been the hallmark of our company. Our promise that “we deliver, no matter what the situation” has earned us, the confidence of our buyers.

The success of our trading can be gauged from the fact that we are now importing 21 vessels (1 million ton) of coal in a year which as resulted in 30% market-share for Awan Trading Co and hopefully the share will increase in the coming years.

Supplying coal to factories as a source of energy. What you sell is important! So we source our Coal from best suppliers around the world. Develop-ing longterm relationships has been the hallmark of our company. Our promise that “we deliver, no matter what the situation” has earned us, the confidence of our buyers.

Awan Trading Co (Pvt.) Ltd.D-28/11, Block 1, Clifton , Karachi Pakistan

Tel: 0092-21-3581-0966, 3581-967 | Fax: 0092-21-3581-0968 | Cell: 0092-333-2545511Email: [email protected] | [email protected]

[Our Delivery Promise]

he lure of success, and winning medals at global events, has been inducing athletes everywhere to indulge in malpractices that eventually lead to disgrace for them and their nations – a tendency that

was at its peak at the Athens Olympics in 2008 but, hopefully, will show a downward trend in coming years.The 2008 Athens Olympics witnessed a record – the highest- ever number of failed dope tests. A hefty number of athletes (105) failed their dope tests. Thereafter, it was decided by the International Olympic Committee (IOC) to store samples of athletes’ blood for a period of 8 years, in deep freezers in the basement of its Anti-doping Laboratory in Lausanne. Although at the 2012 London Olympics, there was a visible decline in this trend, it nevertheless continues. On December 6, in its official announcement on this subject, IOC disclosed the names of some medal winners at the London Olympics, who have been disqualified, and will lose their medals. After the London Olympics, IOC asked its laboratory in Lausanne to re-analyze the samples taken at the Athens Olympics. That exercise led to findings that will deprive these athletes of the medals they won at the 2012 London Olympics. Initial IOC announcement on the issue contains the names of 4 athletes, to which a fifth name might be added later on.Ukraine's Yuri Belonog stands deprived of his ‘Shot Put’ gold medal, Belarus' Ivan Tikhon of the silver medal in ‘Hammer Throw’, and Irina Yatchenko of Belarus and Russia’s Svetlana Krivelyova lost their bronze medals in ladies’ ‘Discus and Shot Put Throw’, events. Consequently, those next in line became entitled to these medals. In this lucky line-up, however, there are two athletes who won’t benefit: Tikhon, who was stripped of his bronze from the 2008 Athens Olympics for failing the dope test, and the Belarusian Nadezhda Ostapchuk. Ironically Ostap-chuk was disqualified earlier this year despite winning a gold medal in the ‘Shot Put’ event in London Olympics for testing positive in the banned anabolic agent metenolone, and she is now serving a one-year ban.That fifth athlete, who too may lose the Olympic medal, was among winners at the 2004 Olympics, but the name of that athlete will be revealed later because of a delay in the proce-dure in conducting tests of that athlete's sample. This event is a stern warning for athletes – that an athlete can be caught for taking prohibited energizers even after 12 years.

Another important chapter of the post-script of the London Olympics is the exposure of shareholders in the mega blackmar-keting of the tickets the shocking aspect whereof is that it impli-cates six top Olympic officials from four countries, who supplied Olympic tickets for black marketing. Initially, black-marketing of London Olympic tickets was detected by a UK-based newspa-per that shared its findings with IOC’s Ethics Commission. The IOC report released to the media on December 5 accused the President and Marketing chief of the Greek National Olympic Committee (NOC) of breaching the IOC code of conduct, and of “tarnishing the reputation of the Olympic movement.” The President and Secretary General of Malta's NOC were also implicated in this scandal besides the president of Serbia's NOC, and the Secretary General of Lithuanian’s NOC. The IOC, however, said that these six office bearers can’t be ‘sanctioned’ under the rules. "The scope of the competence of the code of ethics of the IOC allows the IOC to take an action against the body of the national committee but, due to legal reasons, we have no authority over the individuals,” was the explanation offered by the IOC President Jacques Rogge. Realizing that such an explanation won’t be acceptable to the media, he went on to say that he too thought a change in the ethics code could be made “but [for now] we have to respect the restrictions of the rules we have set."The IOC President urged the NOCs, as well as individuals involved in the crimes committed by them in the London Olym-pics "to take appropriate measures." He then went on to warn the involved countries (and all those planning to commit crimes at the Rio Olympic games) of the possibility of being refused accreditation to future Olympic games and related events. This was evident from the fact that, to avoid a repeat of the London scandal, IOC promised to overhaul its system of allocating tickets for the Olympic Games to be held in Rio in 2016.The involvement of high officials of the national Olympic outfits in crimes of this or, for that matter any sort, must not be overlooked because this could encourage more such crimes. What is worth watching is the profile of the actions the govern-ments of the countries involved in the reported crimes, take against their NOCs. Indications – the sort provided by suspen-sion of India’s Membership of the International Boxing Asso-ciation on charges of “manipulating” the elections of its national boxing federation – do not give the impression that strong corrective actions are likely.That said the issue that deserves the attention of the IOC, and otherwise well regulated British NOC is that, in spite of their roles in organizing the London Olympics, crimes were commit-ted. How could top officials of NOCs of IOC member coun-tries manage to commit those crimes? Was it because of weak administrative systems of the IOC, or due to excessive freedom allowed to the NOC executives in the name of protocol? The IOC has a bigger role in this gaffe; it needs to go beyond holding out mere threats.

Documents

Value Chain Jan 13