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BUSINESS 09

Sunday, 1 March, 2015

ECC approvEs rs 90m for paymEnt of salariEs to psm DIRECTS PC TO COME UP WITH PROPOSAL ON RESTRUCTURING OPTIONS, FORMS COMMITTEE TO LOOK INTO PSM AFFAIRS ISLAMABAD

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he Economic Coordination Committee (ECC) of the Cabinet in its meeting chaired by Finance Minister Senator Ishaq Dar Saturday approved an amount of Rs 960 million for payment of two months salaries to workers of Pakistan Steel on urgent basis.

The Pak Steel chairman briefed the meeting about current profile of Pak Steel and said that some difficulties were being faced in production due to power and gas shortage. He also requested ECC’s approval for specific amount for workers salaries. The chairman added that despite difficulties the PSM, boosted by the special Rs 18.5 billion bailout package by the government last year, had achieved 50 per cent production capacity starting from a mere 1

per cent. He said the PSM management eyed 70 per cent capacity target in March. The chair while approving the amount for payment of salaries, directed for formation of special committee including secretary finance, chairman/secretary privatization commission, secretary industries, headed by chairman SECP to look into affairs of PSM. He also asked the Privatization Commission to table its proposal for the restructuring of PSM at the next ECC meeting. On a proposal submitted by the commerce division, the meeting approved disposal of 28,999 MT of unsold sugar stock available with the TCP. The utility stores

PFDC BRINGS SWAROVSKI TO PAKISTAN LAHORE STAFF REPORT

Pakistan Fashion Design Council (PFDC) joined forces with internationally renowned Austrian firm Swarovski, world leader in cut crystal and fashion jewellery, to present a unique high-fashion event in Lahore on Saturday. The event featured eight Pakistani designers, new to working with crystals, who were commissioned to produce an exclusive couture collection. The designers included Fahad Hussayn, Elan by Khadijah Shah, HSY by Hassan Sheheryar, Karma by Maheen Kardar, Libas by Sehyr Saigol, Nomi Ansari, Saira Shakira, and Sara Shahid. Despite the recent growth of the fashion industry, crystal cutting, especially of the kind mastered by Swarovski, is new to Pakistan. And Andrew Mojica, Managing Director, Swarovski Middle East thinks that the country’s “rich pool of young talent”, not to mention a vibrant and fashion conscious upper middle class, makes it just the right time to invest here. He spoke exclusively to Pakistan Today ahead of the function. ”Pakistan has limited exposure to precision cut crystals, and our company is collaborating with PFDC to educate designers about crystals,” he said. “Hopefully we will have enough of a footprint to start an outlet in Lahore by the end of this year.” Mojica played down security concerns and a stagnant economy

corporation would procure sugar from TCP and this being an arrangement between two government entities, transparency would be ensured. The chair remarked that USC would sell sugar to the customers at appropriate price and would not receive any subsidy whatsoever. While announcing this decision, the chair directed the concerned authorities to keep vigil on demand and supply situation of sugar and wheat in the country as these were important commodities of everyday use and their availability to the masses was to be accorded due care. On a proposal by the ministry of water and power, the ECC accorded ex-post

MICROFINANCE TRAJECTORY WILL HELP ACHIEVE FINANCIAL INCLUSION FOR ALL VISION: SBP CHIEF KARACHI PPI

which usually discourage foreign investment. According to the company’s due diligence, a burgeoning fashion industry and a thriving upper class outweigh the negative side. “A big bulk of your population is under thirty years of age,” he said. “That means so many people are entering the job market, earning money, and becoming fashion conscious. That is the ideal environment for a company like Swarovski.” The plan is to tap into the “energy” that is “so apparent” in Pakistan’s fashion industry. Designers, learning from the “best in the world”, will be able to add market leading crystal designs to their collections. This will lead to multiple spill overs “since fashion complements fashion”. The company, 120 years old, boasts an impressive list of world-

class eighty thousand products. It plans to adopt a “teaching through production” method, where designers get hands on training which is designed to be more hands on than academic. “If Pakistan is able to tap into the international crystal market, it could improve its economy as well”, he said. With the apparel industry already doing well, and crystals complementing what designers already create, the export mix can also be improved.But for now they plan to take the project as a cottage industry. Along with bringing their products to the Pakistani market, they will identify and nurture indigenous talent, until a degree of self-sufficiency is reached in precision cut crystals. The company did not choose to divulge the amount of investment it is bringing to Pakistan.

LAHORE: Borjan CEO Chaudhry Zahid gives away the trophy to the winning team of Borjan Punjab Polo Cup. STAFF PHOTO

facto approval for issuance of sovereign guarantee by the ministry of finance in respect of syndicated term finance facility amounting to Rs 40 billion for the power sector. The loan had been arranged on behalf of power distribution companies by Power Holding (Pvt) Limited from consortium of local commercial banks. The ministry of petroleum and natural resources proposed that in view of the widening gap in natural gas demand/supply on the gas supply network, especially M/s SNGPL network, up to 12 MMCFD gas from Miano Tight Gas field may be allocated to M/s SNGPL through swapping arrangements. M/s SSGCL, having the nearest transmission network may take delivery in their system and supply to SNGPL. The ECC after due consideration approved the proposal. The ministry of petroleum and natural resources also proposed that three MMCFD gas from Maru-East-1 Gas field be allocated to M/s Engro fertilizer during the EWT (extended well testing) period. Further, the commerciality/D&P lease of the field may also be approved. The proposal was accordingly approved by the ECC. M/s Engro Fertilizer had expressed their interest to receive gas from Maru East-1 as it would help them to produce 14,000 tons extra urea in the country. The ECC also passed a resolution eulogising the services of Mr Sanaullah, Joint Secretary (Committee), Cabinet Division, who is due to retire from government service. All participants of the meeting wished him well in his future endeavours.

State Bank of Pakistan Governor Ashraf Mahmood Wathra has said that with strong commitment of the government, SBP’s strategic vision, sound legal and regulatory foundations, robust market infrastructure, technological and institutional innovations, and private sector dynamism and trajectory of microfinance has been set for achieving the long-term vision of “financial inclusion for all” in Pakistan. He was addressing the second international conference on economics and finance in Kathmandu, Nepal, titled ‘promoting equitable economic growth through inclusive finance’ held by the Nepal Rastra Bank. Sharing his thoughts for promoting equitable economic growth among South Asian countries, the SBP governor described in detail his vision on promoting inclusive economic growth in Pakistan through financial inclusion. Wathra highlighted the fact that the global financial crisis had pushed most of the emerging economies into difficult economic challenges in recent history. He stressed that globalization had increased the need for regional economic and financial cooperation among South Asian countries due to the cross border interdependencies and taking advantage of the emerging opportunities. Elaborating further, he said the dwindling export earnings and receding foreign capital inflows translated into foreign exchange market pressures. Therefore, said the governor, “most of us were challenged while we endeavoured to stabilise our foreign exchange markets due to weakening of exports earnings.” He hoped that the common challenges faced by the South Asian countries would strengthen regional cooperation to help their nations sustain and contain future down side risks transmitting from advanced economies. Referring to the strong fundamentals to the advantage of South Asian countries, Wathra recalled that the region was home to around 1.7 billion people, with the youth in majority, thereby giving positive population dynamics for both to grow fast and greater headroom in terms of debt carrying capacity to continue economic expansion. Sharing SBP’s experience in promoting an inclusive financial sector in Pakistan, Wathra asserted that Pakistan had kept pace with the changing global trends in policy and practice, and the State Bank of Pakistan’s role had been pivotal in steering the sector with a strategic vision and pursuing a systemic approach in developing the microfinance sector on sound footings. ‘Pakistan was the first country in South Asia to have issued a Microfinance Law (Microfinance Institutions Ordinance 2001) which

paved the way for creation of second tier banks catering to the needs of low income segments of the society which were excluded from the mainstream commercial banks,’ he averred. The governor added that the SBP introduced specialised microfinance policy and regulatory framework pioneering global best practices. These regulations and supervisory mechanism strengthened the enabling environment helping MFBs develop viable business models to realise sustainable growth in microfinance. “The success of microfinance regulations and market development in Pakistan is widely acknowledged by the international community,” he recalled, adding: ‘Our microfinance regulatory framework was ranked No 1 in the world by the Economist Intelligence Unit (EIU) of the Economist Magazine in its reports in 2010 and 2011, and third best in its annual reports for 2012 and 2013. Wathra disclosed that the SBP strengthened the regulatory framework with enhanced focus on financial stability as the sector evolved: “State Bank revised the Minimum Capital Requirement (MCR) for Microfinance Banks (MFBs) in 2011 while allowing the existing MFBs to raise the prescribed minimum paid-up capital in a phased manner over the next three years,” he elaborated. Wathra said that SBP’s branchless banking (BB) regulations issued in 2008 help catalysed important branchless banking deployments in the country and resultantly the retail network of microfinance expanded overwhelmingly through agents and mobile phone channels. He revealed that since 2008 the sector was catering to more than 3.24 million borrowers (as of Sep 2014) out of which MFBs’ share was 1.155 million. Depositors have grown to 5.734 million in Dec 2014, with average yearly growth of 69 per cent. It may be recalled here that Pakistan is experiencing phenomenal growth in the number of branchless banking transactions which have been undertaken at thousands of small shops situated in the streets and local markets across the country to serve common people at convenient time. Wathra divulged that the average monthly volume of such transactions is estimated to be around 24 million. Average size of these transactions is only Rs 5000 which shows that technological solutions are helping to reach out the millions of previously financially excluded segments of our society. In the end, he underscored the importance of beginning the process towards financial cooperation and integration, which is a longerterm goal by engaging more actively in research and discussions, in order to arrive at a long-term vision of regional financial cooperation that the South Asian countries can share, and to increase their understanding of that vision.

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