Profit E-Magazine Issue 204

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108 The life and times of Dr Ishrat Husain 15 Shezan - What's in a name?


18 Think about energy security Uzair Younus 20 Fixing the Oil Conundrum Ammar H. Khan 22 Morinaga may be up for sale in Pakistan. The buyer? Morinaga



25 25 If you like IT, put a ring on IT 28 JazzCash, Mobilink’s favourite child?


Publishing Editor: Babar Nizami - Editor: Khurram Husain - Joint Editor: Yousaf Nizami Assistant Editors: Abdullah Niazi I Sabina Qazi - Sub-Editors: Mariam Zermina | Basit Munawar Editor Multimedia: Umar Aziz - Video Editors: Talha Farooqi I Fawad Shakeel Reporters: Ariba Shahid I Taimoor Hassan l Shahab Omer l Ghulam Abbass l Ahmad Ahmadani Shehzad Paracha l Aziz Buneri | Maliha Abidi | Daniyal Ahmad | Ahtasam Ahmad | Asad Kamran Chief of Staff: Maliha Abidi - Regional Heads of Marketing: Mudassir Alam (Khi) | Zufiqar Butt (Lhe) | Malik Israr (Isb) Business, Economic & Financial news by 'Pakistan Today' Contact:

The life and times of

Dr Ishrat Husain One of the most impactful public servants in Pakistan’s history, Dr Ishrat’s story is a telling part of our economic and national history 8


By Abdullah Niazi

n July 2021, nearly a year to this day, Dr Ishrat Hussain sent his resignation to the then prime minister, Imran Khan. For the past three years, he had been serving in Khan’s cabinet as Adviser to the PM for Institutional Reform and Austerity. Most resignations from a cabinet position do not come willingly. Sometimes ministers are resigning because they are being scapegoated, at other times they have fallen out with their party, and in some cases they are resigning as the result of some failure. Dr Ishrat had the rare distinction of resigning on his own terms. Back in 2018 when he took on the role of Adviser to the PM, he had done so with the understanding that his term would last three years, and that he would retire upon reaching the age of 80. When the time came, he did not try to stick around his position of power. Instead he stuck by his word. Thus came to an end one of the most remarkable public service careers that this country has witnessed. From his early days as a civil servant to his time as governor of the State Bank of Pakistan (SBP) and everything in between, there is very little in the field of development that Dr Ishrat has not done or seen. Why is it worth looking back at his career? The reasons are two-fold. The first one, and perhaps, the one that is more ‘news relevant’ is that the SBP is currently standing on the precipice of a new governor taking the helm. It is worth looking back at the tenure of a former governor that was instrumental in shaping the SBP into what it is today. The second reason, perhaps, the more mawkish one, is that an in-depth acknowledgement of his life’s work is long overdue. As with any public office holder, there has been criticism of Dr Ishrat and his tenure at the SBP. His critics claim that the loose monetary policy he favoured may have left the country with rising levels of inflation and a current account deficit. At the same time his tenure marked an impressive cleanup of the financial sector and the privatisation of the banking system that gave the entire country’s financial climate a breath of fresh air. Those are all aspects that we will dive into deeper in this story. In his nearly six-decade long career, he has donned many hats. Whether his decisions were right or wrong, he wore each role with dignity and bore his responsibilities with diligence. In a series of interviews with his close associates, and using the recently published biography chronicling his life written by Sibtain Naqvi, Profit has tried to get a measure of the man, and draw lessons from his rich life.

The generation that was to build Pakistan


lace the man in his context: Ishrat Husain was born in Agra in 1941 to a middle-class family of professionals. His father was a lawyer who in December 1947 was forced to uproot the lives of his entire family and move them to Karachi to avoid the communal violence of partition. The young Husain arrived in Pakistan at six years old where he began his formal education. He was of the first generation of Pakistanis that were entirely educated in the state of Pakistan. As a newly-minted state, Pakistan was at a stage where the next two decades decided the direction in which its institutions would be erected. Husain’s generation, which was just entering grade school, would be the architects of these institutions. The job of building Pakistan would fall to this generation. From an early age, it became apparent that Ishrat had a knack for education and his talent was recognised by his teachers and family alike. After matriculating at only 12 years old, he enrolled into Government College Hyderabad where he discovered a knack for debating and became Vice President of the College Council. After obtaining a degree in Zoology and Chemistry, Husain then went on to Sindh University in Karachi to pursue a further degree in Chemistry — which was his original subject before economics. He maintained an interest in the growing concerns that were enveloping the then nascent state of Pakistan, and during his time at Sindh University even protested against the One Unit Scheme. Later on in his career as a civil servant, Husain would sit on the One Unite Dissolution Committee. It was also during this period that he realised his passion lay in solving problems. Which is why, like so many other hopefully young men and women, he decided that he was going to become an officer of the Pakistan Civil Service. Back in the day, as Sibtain Naqvi’s biography of Husain titled ‘Unravelling Gordian Knots’ explains, the civil service was a very different animal. A very select group of the country’s brightest individuals would compete for a limited number of slots, and the ones who would pass the rigorous examination would then be clothed in immense power and given free reign to run the country. Husain sat for the examination and managed to successfully find his way to the Civil Services Academy in Lahore. Here, he was part of the particularly illustrious 1964 batch of civil servants. Among this year’s crop of talent were the now former president Farooq Leghari, former federal minister Abdullah Memon, former governor of Punjab Shahid Hamid, and former secretary general of the finance ministry

Mueen Afzal. “In every civil service batch back in those days, out of 20 people you would find two to four who were outstanding. The 1964 batch is special because almost all of the officers that came that year were exceptional. If two to four were outstanding out of 20 in other batches, in the 1964 batch 16 out of 20 were outstanding,” says Sartaj Aziz, economist and strategist. The academy proved to be a deeply formative experience for Husain. It was here that he first picked up an interest in economics and law, and considered pursuing further education in the field. His batchmates were a diverse young group, with some privileged scions of established families who had studied at Oxbridge and others from a more middle-class working background, the kind Husain came from. Here, he developed friendships that would last him a lifetime, and picked up interests such as horse riding that would otherwise have eluded him. As his interests developed as a civil servant, he found himself more and more inclined towards the developmental side of public service. A stint at the then East Pakistan Academy of Rural Development in particular inspired him to take up a career in the development sector. But immediately after graduating from the academy and finishing his training, there was a job to do. Husain’s first posting was as Assistant Commissioner under training in Khairpur district, Sindh. He continued to move around, going first to the sub-division of Nawabshah and then on to the larger Shikarpur area. As an empowered government officer in that era, Husain also became a witness to history. In 1969, he was posted in Chittagong at the height of the unrest against the then president Ayub Khan. In 1971, when the country broke into two and Bangladesh won its freedom, like many others Husain found it a moment of reflection as much as one of grief. After all, theirs was the generation that was supposed to build Pakistan, so where did it all go so wrong? Some form of catharsis came in 1971 when he found himself a part of the One Unit Dissolution Committee. This was the same One Unite scheme that Ishrat had protested against as a young college student, he was now helping dismantle as a young government officer. At this point, Husain and his superiors both realised that he had a talent for development work. He was a hard-working administrator, but he clearly had an eye for bigger picture stuff. He was appointed as deputy secretary of the Planning and Development Division. This was where he decided that his passion lay in development work, but to move ahead with it he would have to improve his academic qualifications. This was a turning point for him and his


In every civil service batch back in those days, out of 20 people you would find two to four who were outstanding. The 1964 batch is special because almost all of the officers that came that year were exceptional. If two to four were outstanding out of 20 in other batches, in the 1964 batch 16 out of 20 were outstanding Sartaj Aziz, former minister for foreign affairs

young family (Husain had married Shahnaz Gill in 1970). Husain could on the one hand stay in Pakistan and continue living the cushy life of a government officer with all of its trapping and privileges. Or, he could study and distinguish himself. He chose the latter. Bothered by his lack of economics education, he embarked on a government-backed programme to Williams College in the United States for a degree in developmental economics, launching an association with the world of academia that lasts to this day.

The economist enters


fter graduating from Williams College, Husain’s career in the world of finance and economics took off. Immediately after returning, he got his first taste of Q block when he was appointed as deputy secretary of the finance division in 1972, and within a year he was promoted to additional secretary. But the civil service he had returned to was a far cry from the one he had left. In the wake of the first Bhutto administration and the independence of Bangladesh, political patronage was rampant in the civil service. Lateral entry and nepotism irked him, and in his interactions with Bhutto he found many contradictions. Husain has expressed to his biographer, he found that Bhutto was in possession of a brilliant mind, but he could not quite overcome his feudal background despite the popular support of the people he enjoyed. Around 1976, when Bhutto was at the peak of his power, Husain was a contender for the slot of finance secretary. His education in economics and time at the finance division made him a shoo-in. Yet the promotion was not to be. Perhaps, a little disillusioned by the state of the country, and still hungry to learn more, he decided that if he was going to occupy high seats of power he was going to do it right. He decided to pursue a doctorate, and under the Ford Scholarship went to Boston University for his PhD. The original plan was that he would take


two years off from the civil service, complete his doctorate and then return to Pakistan to serve. It would leave him a couple of years behind his batchmates in terms of promotions, but Husain was young and had a long career ahead of him. In 1978, he returned to Pakistan having completed his doctorate as Dr Ishrat Husain. That is when he was approached by the World Bank. During his time in the civil service, he had interacted with World Bank officials regularly. When one of them suggested that he apply to the bank as a junior economist, he began considering it. It was a risk. The World Bank is culturally very different from the civil service, and Husain would be throwing away a thriving career. But in the process of completing his PhD, he had realised his desire to pursue his interest in economic policy. A firm believer in the free market, the offer was made to him at a time when the Cold War was raging and the world was stuck between two economic systems — capitalism and socialism. Husain wanted to be in the thick of this global struggle, and so against the advice of his family and coworkers he accepted the position at the World Bank in 1979. The next 20 years of Husain’s life were spent at the World Bank. In his time there, he travelled all over the world consulting developing countries in facing their fiscal demons. He began as a junior economist for Africa and earned glowing recommendations from the Liberian president after his first assignment. His second assignment, however, is perhaps one of his most exciting stories. Freshly assigned to Ghana, Husain arrived in a country that had recently been taken over by a military revolution. The Ghanann government was split between socialist and rightist camps, and President Rawlings had yet to decide whether he would back the United States or the USS in the Cold War. For a while, Husain found it difficult to get meetings, until one evening President Rawlings called him in for an off-thebooks conversation. When Husain walked into the room, President Rawlings launched into a

long speech about how his country had been looted by corrupt leaders. Almost immediately, memories of the Bhutto era came flooding back. Instead of taking a hardline World Bank approach, he explained to the president that he was from Pakistan where a populist leader had recently come to power and failed in his mission of courting the USSR and taking a hardline against the States. By establishing a third-world connection, he was able to to influence President Rawlings and turn the bank’s mission in Ghana into a success. The rest of Husain’s career at the World Bank went as one might expect. By 1982 he had completely left the civil service, and was appointed World Bank Representative to Nigeria where he stayed for four years. From 1987-91, he ran the bank’s Debt and International Finance Division. After a successful stint here, he was promoted to chief economist for Africa, where he gained critical experience dealing with the economies of developing countries. He served briefly in East Asia, a region in which he wished he had got more time, before assuming responsibility as Director for Poverty and Social Policy in 1996. In 1997, after a major World Bank reshuffle, he became the country director of Central Asian republics. Over here, Husain’s initial discomfort with socialist modes of planning and thinking turned into a definite sense of distaste for them. His career with the World Bank after 20 years was reaching a crescendo. The next step was becoming a vice president, and Husain was well on his way to getting there. But then he got a phone call, and the rest is history.

The phone call


n the middle of October 1999, Husain was on a work trip in Kazakhstan, when one evening he was awoken by the incessant ringing of a phone after midnight. On the other end of the line was Brigadier S M Mujtaba, who had got through to Husain’s personal line through some common connections. The brigadier informed him that Lt General Aziz Khan, who was then the chief of general staff

I always found in Dr Ishrat someone who was very interested in what was going on in Pakistan. He was always very anxious to know what was happening in Pakistan. The more I met him, the more I got to know him, and the more I started to appreciate his deep interest in what was happening in Pakistan Syed Babar Ali, businessman

of the Pakistan Army, wished to speak to him urgently and in person. This was only a few days after a military coup by General Pervez Musharraf had removed the then elected prime minister Nawaz Sharif from office and replaced him with himself at the helm of affairs as Pakistan’s ‘chief executive.’ Husain politely informed the brigadier that he was due to meet the president of Tajikistan the next day in Dushanbe, and that he would stop by in Islamabad on his way back from Dushanbe to Washington DC. Husain arrived late in Islamabad, and was greeted with unusual amounts of protocol. The next morning, at 7:00 AM sharp, he was driven from his hotel to General Headquarters (GHQ) in Rawalpindi. At GHQ, he was greeted in a conference room by 12 generals, including Aziz. The generals quickly began probing Husain on issues regarding the Pakistani economy, where he stood on them, and what he felt were the solutions. Earlier in 1999, Husain had published his seminal work called ‘Pakistan: the Economy of an Elitist State.’ The generals informed him that they had read the book and were like-minded, and they would require his assistance in executing their economic plans. Husain said he would have to go back to Washington DC and mull it over. In Washington, Husain began thinking that returning might be a good idea. In his long years at the World Bank, even though he had not been involved in Pakistan on behalf of the bank, he had been keeping a close eye on happenings at home. “I always found in Dr Ishrat someone who was very interested in what was going on in Pakistan. I met him and other World Bank officials whenever I went to Washington DC, and always found him very anxious to know what was happening. The more I met him, the more I got to know him, and the more I started to appreciate his deep interest in what was happening in Pakistan,” says Syed Babar Ali, a businessman and founder of the Lahore University of Management Sciences (LUMS). In November, Husain had his first meeting with Musharraf. The meeting was brief,

and in nearly half an hour the general asked him pointed questions and told him that along with a couple of other contenders, Husain was up for the governorship of SBP. Originally, as those close to Musharraf have explained, Husain was up for the position of finance minister. However, after Shaukat Aziz was appointed to the post Musharraf was still keen on having Husain on the team and decided to throw in his name in the running for governor of the central bank. Right after the meeting, in fact, Musharraf asked him to meet Shaukat Aziz. Some difference between the two began to appear right there and then, after Shaukat Aziz informed Husainthat he had not been consulted in the nomination for the SBP governorship even though he should have been. The meeting over, Dr Ishrat returned to Washington DC and when time continued to pass, he assumed he had not got the job since Shaukat Aziz had seemed less than enthusiastic about the prospect. However, by December 1999 he was given a call to come and serve as governor of SBP, which he readily accepted. Ishrat packed away his 20-year career at the World Bank and made his way back to Pakistan, entering a minefield of economic and political instability.

State bank boss


usain’s tenure as State Bank governor came at a tumultuous time. The country had recently been sanctioned severely for its nuclear tests, and political instability following a military coup always has adverse effects on the economy. When Husain took over, the economy was stagnant, external debt payment difficulties were pervasive, and financial indicators were concerning. Two thirds of the state’s revenues were going towards debt servicing. With exports worth $7 billion and debt servicing costs of around $5 billion, Pakistan was on the brink of default — much like it is today. Now, up until this point there was very little inflation in Pakistan. As a development economist, Husain’s philosophy was that there

was no point of having low inflation if it came at the cost of having low growth and high unemployment. He was of the school of thought that an economy should be pumped with activity, and business should be promoted to stir it from its slumber. Because of this, as State Bank governor he decided to take a hardline and introduce a very loose monetary policy, and record low-interest rates. The plan was simple. If interest rates were low, more people would borrow and spend on investment and business, which would mean employment for more people and the economy growing. At the time these decisions were being taken, money supply was high, global growth led to high fuel prices, and crop failure was leading to high prices of items such as palm oil — more eerily similar situations to today. The policies that Dr Ishrat was prescribing to the economy were all going to result in inflation, this was something he knew very well. However, to him, inflation was worth it to fix the stupor the economy was in and create jobs for people who had no livelihoods. As a result of the low-interest rate and borrowing conditions being easier, the number of borrowers in the country went up from 1.1 million people to 5.5 million. The goal at this point was very much to increase purchasing power. As a result, private sector borrowers took up the unused capacity in the economy galvanising different industries. The outcomes were better agriculture, better production, better outputs, and better exports. As a result, growth rate climbed to 8%. In 2004, however, the chickens came home to roost. The monetary policy decisions of the SBP meant that inflation was knocking at the doors and was about to become the most talked about point in politics. The general consensus seemed to be that in 1999, the economy was in desperate need of a kickstart, however, it needed to be done so in a sustainable manner. Instead, we might have launched into a boom-and-bust cycle. Economists such as Ijaz Nabi, the economic policy manager for the World Bank in South Asia, said that SBP may


It was a policy choice. Low inflation with low growth and high unemployment is of no use to me. If they had wanted a different method to solve the problems of the economy we had back then, they should have chosen someone other than a development economist Dr Ishrat Husain, former governor of the SBP

have overshot its mark. “It is very important to be very vigilant when you have that kind of expansion. It is very easy to go over the point where you’re just supplying enough credit given the supply of goods. It is very difficult to overshoot and we overshot. That is when inflationary pressures build up.” To his credit, Husain has stood by all of his decisions. “It was a policy choice. Low inflation with low growth and high unemployment is of no use to me,” he said in an interview back in 2007 after his term had ended and the inflation rate had continued to hike. “If they had wanted a different method to solve the problems of the economy we had back then, they should have chosen someone other than a development economist.” Throughout all of this, Husain maintained a fierce sense of independence for the SBP, and refused to bend to pressures from the finance ministry or even the prime minister. “There were times when I made an action that the finance ministry or the prime minister disagreed with, but I always maintained that the State Bank had its own role to play, and there were occasions where I have to say Musharraf gave me that freedom. And that is what I needed to successfully do the job,” Husain said in a recent interview with Profit. “When I used to make my trade policy after the budget, we always used to have a session with Dr Ishrat. This help was needed from him. He was one of the best governors of the SBP and his inclusion in the institution was very much needed,” says Humayun Akhtar Khan, former commerce minister during the Musharraf administration. “Historically and very much now governors are under pressure from the finance ministry. Ishrat Husain Sahib with a wealth of expertise was part of the overall policymaking of the government and at the same time was also a great defender of the autonomy of the State Bank of Pakistan. I think that is something every governor should try to do.” “Back in the day, the topic of the finance ministry or someone else wielding influence over the SBP Governor was not a


critical issue,” he explains further in a conversation with Profit. “This has now recently become an issue surrounding the autonomy of the state bank. “In my personal experience with him, I always thought that Dr Ishrat was a man who was essentially a pro-private sector individual. That is also one of the reasons why it grew at such a high rate,” he adds. The fact that Musharraf relied on Husain for more than just handling the central bank was well known. While Shaukat Aziz may have been the ‘finance’ guy of the Musharraf regime, he was constantly in a bit of a competition with Husain. In a quote from Naqvi’s biography of Husain, Musharraf is reported as saying “Dr Ishrat functioned beautifully in the State Bank. He was extremely popular both inside and outside of the bank. Whenever we spoke about any financial issues, I used to call Dr Ishrat with the finance minister sitting. I always admired him because he is a person who expressed his views openly instead of beating around the bush.” This no-nonsense confidence coupled with polished manners made him a vital part of the Musharraf regime. Of course, Husain has maintained that he was not a political appointment and he was indeed not holding a political office. Despite that, he has always taken full responsibility for his time as governor and stood by his decisions.

Fixing the banking sector


erhaps, one of the most significant contributions made by Husain was his assistance in the privatisation of the banking sector in Pakistan, particularly the denationalisation of the gargantuan Habib Bank Limited. Banks had been nationalised and reorganised in the 1970s into five major banking organisations. In December 1999, when Husain took over, public sector banks had more than 80% of the market share and almost all of them were

on budgetary support. On top of that, their operations were hindered by bureaucratic inefficiencies since they were government owned. “By the mid 1990s the banking sector was on its knees. The World Bank and IMF were both saying massive reforms were needed but the government was not catching on. When Dr Ishrat came in, many of the large national banks were insolvent. He took a fresh look at the entire picture and took a proactive approach in the reforms of the banking sector. He took up a full comprehensive review and addressed the issue really well,” says Zakir Mehmood, former CEO and President of Habib Bank Limited. Husain became the leading lightbearer for the denationalisation of the banking sector, after which the private sector got a great boost. His direct rapport with senior bankers made the process much easier than if he as SBP governor had just enforced his agenda. Instead, he held regular meetings with CEOs and presidents and established a direct line of communication. The efforts for this had been in the works already, but the process had been slow. “Denationalisation and deregulation were started back in the 1990s for the first time under Nawaz Sharif and Sartaj Aziz in his first stint as finance minister in 1993. HBL was the major denationalisation project that took place in the Musharaff era, otherwise these were policies that we had introduced before. India had also begun the deregulation process in the 90s but the difference was that they stuck with it and we haven’t managed to do the same,” says Humayun Akhtar Khan in a conversation with Profit. The initiatives soon came to fruition. Public sector banks were restructured, privatised, and built into competitive institutions, which provided quality services. Lending rates came down to 3-4% from 16-17% which led to a boost in private credit. Non-performing loans were reduced from 26% to 11% and the financial sector became a major contributor to the revival of the economy.


He was one of the best governors of the SBP and his inclusion in the institution was very much needed. Ishrat Husain Sahib with a wealth of expertise was part of the overall policy making of the government and at the same time was also a great defender of the autonomy of the State Bank of Pakistan. I think that is something every governor should try to do Humayun Akhtar Khan, former commerce minister

Tricky waters


f course, this entire scenario was new to Husain. He may have taken to it like a bird to flight, but the culture in the government was vastly different from what he had got used to at SBP. It might have been his time in the civil service that allowed him to navigate through political realities and conflicts. He had at times a healthy rivalry with Shaukat Aziz. “It was difficult. I myself had become a competitor of Shaukat Aziz in 2004 when the prime minister changed after the resignation of Mr Jamali. Things were easier when he was finance minister because we were still equals, but when he became PM the relationship was not very smooth between us. From what I remember, Dr Ishrat’s relationship with him was not that comfortable either. The good thing was that Ishrat Sahib and I were close to president Musharraf, so there was only so much the prime minister could do to stop our initiatives,” reads a quote from Humayun Akhtar in Sibtain Naqvi’s biography of Husain. . Shaukat Aziz was unable to provide comment on this.

Swan song? Don’t count on it


any would have hung up their boots at this point. Governor of the State Bank is a pretty high climb, and Husain’s career was saved at this point. He was already 64, and if he had remained a civil servant, he would already have retired four years before at the age of 60. He could have chosen to work in an advisory capacity as a consultant or work for the World Bank. Instead Husain went back to a different passion of his — education. From 2008 to 2016, he remained Dean of the Institute of Business Administration (IBA) in Karachi. IBA had once been a towering institute that

produces Pakistan’s business graduates and managers. It had a heyday and was the university of choice for many. However, by the 1990s and definitely by the 2000s it had fallen into grave disrepair in comparison to emerging and rival universities such as LUMS in Lahore. Dr Ishrat spent his eight years at IBA gathering funds, developing the curriculum, bringing it up to an American standard, and once again putting IBA on the map as a go-to school for business managers. Husain, it is worth mentioning here, has always been very well liked within the journalistic community. That is largely because anytime a young business or economics correspondent had any questions or needed a comment, he was available to them. This has been the case for a while, and his method of explanation to journalists was always gentle and full of advice. His respect for good journalism is strong, and his distaste for poor journalistic ethics equally potent. It is an extra source of joy for the journalistic community in Pakistan then, that he was also the architect behind the Centre for Excellence in Journalism (CEJ) by IBA, which is an impressive institute that is investing in a profession that has a rich legacy in Pakistan, but has long been languishing and is constantly under threat. As dean of IBA, Husain has maintained the same open line of communication with his students that he did with journalists and bankers. “I was doing my final year project on game theory and couldn’t find an adviser. Dr Ishrat had retired by then, but I emailed him anyway to ask if he would be my adviser,” says Ariba Shahid, an IBA alum. “He had absolutely no need to do this, he could have ignored my email like most professors, but he responded very kindly with a few words of advice before saying it was not his area of expertise so he could not help me. That in itself was very encouraging, and I have a great deal of respect for him for that.” “IBA’s transformation could have been earlier but only if someone with the charisma of Dr Ishrat Husain did it. Beyond the fact that

he has a very high stature in Pakistan, he wanted to take the institution well beyond where it was and he has been very successful. It would have been a tall order for any other director simply because they lacked the charisma, influence, and sense of mission. All of this was combined in this one person,” says Dr Javed Ashraf, former Director of IBA. Perhaps, what is a testament to Husain’s diversity as a man is that in the middle of his hard-hitting career in economics, he is also a man of taste, and in the many institutes he has built one of the most loved is the National Academy of Performing Arts (NAPA), of which he is founding chairman. Right after his retirement as governor, he took over as chairman of NAPA — the brainchild of thespian Ziya Mohyeddin. “Dr Ishrat’s connection with NAPA has been from the very beginning. He was crucial in getting us launched. When the PPP government came in, the grant to NAPA ended and it was Dr Ishrat who got us out of this trying time. I personally learned a lot from him,” says Mohyeddin. We have not gone into depth about Husain’s contributions to IBA particularly because that has not been his most impactful position in the course of his very lengthy career. But in short, he very much turned the entire institution around using sheer force, dedication and his own personal weight. As many have pointed out, he has never been a man to be trifled with or who would easily allow anyone to steam-roll him. This has served him well his entire career. In the six decades he spent in different positions all over the world, there are those that would disagree with his decisions and policies. What is undeniable, however, is that he has carried himself with poise and dignity. His role in the history of Pakistan’s economic management has been missed by few, but his entire career is a reflection of the story of Pakistan. As he looks forward to enjoying his twilight years, we wish him a long and fruitful retirement.and hope that he will be accorded the he deserves in our history. n



A history steeped in troubles, tribulations, and complications is at a turning point with the settling of a 33 year old case over the Shezan name


By Maliha Abidi

n 1975, a simple transaction was about to inextricably change the fates of two business families in Lahore, launching them in a three-decade-long legal dispute over a name — Shezan. In September 1974, the Bhutto administration declared the Ahmadiyya community non-Muslims, and a number of prominent Ahmadiyya community members, among them leading business owners, prepared to pack up their assets and leave the country. While the community was no stranger to persecution, for many the constitutional enshrinement against their faith was the last straw. Among those looking to sell their business was Shezan Restaurants and Bakeries. Owned by Shahnawaz Ltd, Shezan was very much a family affair and had been around since the late 1950s. They were pioneers of bringing desi and continental food together with fine dining. They had two restaurants in Lahore, Shezan Continental and Shezan Clay Oven, both on the lower mall. This was a time when there weren’t many dining options available to a rising upper middle-class. The lower mall was a swanky area surrounded by both government and private offices, which made restaurants that provided good, familiar food in a place with a fashionable ambiance a thriving business. So when the Ahmadiyya family that owned Shezan decided to sell, Chaudhry Meher-ud-Din decided to buy both restaurants from them. A shrewd businessman who owned automobile showrooms in Lahore, Meherud-Din recognised the potential of Shezan.


It was a recognisable brand name, had a legacy, and had been built over the years over solid business fundamentals and catered to a specific need. He also knew that inside the restaurant was a bakery as well, which he could separate and expand the business. Meher-ud-Din’s ambitions extended beyond this. He also wanted to acquire a third asset that Shahnawaz Ltd had — the Shezan International factory which produced and packaged products like the iconic Shezan Mango juice, squashes, pickles, jams, marmalades, ketchup etc. This is where things get a little complicated. While the two restaurants were sold to the Chaudhry family, Shahnawaz Ltd decided to keep Shezan International Factory. The family had put in a lot of work to build up the business and while the threat to their lives and property was very real, they got many reassurances from the government of Pakistan and decided to keep this side of their business. This resulted in a situation where there were two different entities operating under the Shezan name. There were the restaurants and bakery owned by Chaudhry Meher-udDin and the factory owned by Shahnawaz Ltd. The restaurants were in the fine dining and bakeries business, and the factory produced and packaged the iconic Shezan Mango juice, squashes, pickles, jams, marmalades, ketchup and other such products. For the first few years things ran as smoothly as they could. But then came the trademark dispute in 1988, after which came the lawsuits. After a legal battle that has lasted more than three decades, the Supreme Court of Pakistan (SC) recently ruled in favour of Shahnawaz Ltd — the original owners of the Shezan name. Essentially, the

case was less about the right to the name and more about who would get to use the Shezan trademark to expand their business. This is how it all went down.

The story after the sale


hezan hasn’t had an easy time in Pakistan since 1975. Chaudhry Meher-udDin was from a staunchly Sunni family and Shezan bakeries all around Lahore prominently display a declaration of their faith on their windows. Despite this, whenever violence against the Ahmadiyya community rears its ugly head, Shezan Bakeries are often the first targets. Despite this prejudice, the Shezan name itself has made a name for itself also on the basis of consistency and reliability that makes it stand out. Of course, the Shezan Bakeries we know today are neither high-brow nor fashionable and that has been the product of conscious decisions. When Chauhdhry Meher-ud-Din had originally bought the restaurants, his eyes had been on the in-house bakeries. At that time, if anything was served from inside a restaurant, sales tax of 16 percent, value added tax at one percent with special excise duty on top were added to the bill. The bakery items were quite popular which is why Meher-ud-Din decided to separate the bakery from the restaurant which resulted in the prices dropping and demand rising. Immediately, the bakery was a big hit. They also began to stock their shelves with products from Shezan International. Since it was not very well known that the two entities had separate owners, people thought that Shezan Bakeries were selling their own brand of products. The arrangement was a profitable


one for both sides so no one brought it up at this point. The dispute around the trademark actually arose in 1988. At this point, Shezan Bakeries were becoming a bigger deal than the restaurants which had dwindled in popularity in the face of new options popping up - as tends to happen to legacy family dining establishments. The Chaudhry family decided that it was time to expand the business. Shezan Bakeries all over Lahore had a range of very recognizable products. These included things like their lemon tarts, cheese puffs, bakery biscuits and the like. These products were sold by weight at the bakeries. This meant you would ask for a certain amount of biscuits for example, a staffer would weigh them in a Shezan labelled box, pack them and then you would pay. Those biscuits were then taken home as a teatime staple or given as a gift by people visiting friends and family. The Chaudhries wanted to take these popular items and sell them not just at their bakery but outside of it as well. The concept was that the products would be packaged in plastic under the Shezan name and sold at utility stores, supermarkets, and even other smaller bakeries. This, of course, was not cool with Shahnawaz Ltd. Shahnawaz Ltd had feared something like this would happen. The Shezan trademark was originally under the ownership of Shahnawaz Ltd. However, when they decided to keep Shezan International they registered it under an entity called ‘Shezan Services’ and transferred the trademark to them. For simplicity, we will continue to refer to the owners of the Shezan International factory as Shahnawaz Ltd. Up until this point, they were the ones packaging products under the Shezan name and selling them ahead. Meanwhile, the Chauhdhry family wanted to expand. On Dec 29th 1988, Shezan Bakers filed an application with the Registrar of TradeMarks seeking registration of the trademark ‘Shezan’ in their name. The firm intended to use the name for its patties, cheese straw, chicken sandwiches, chicken spring rolls and a number of other items. The application was eventually published in the Trade Marks Journal. The registrar advertised the application in the journal for the purpose of inviting opposition. Shahnawaz Ltd, did so under the Trade Marks Act of 1940. So finally in 1988 there was a clear chasm between Shezan International which produces the iconic mango juice, jams, pickles etc and Shezan Bakers which produces its own line of iconic products including the lemon tarts, sandwiches, patties, etc. The arguments in court were heated and prolonged. Over a 33-year period, the original owners Shahnawaz Ltd argued that the trademark


Shezan was their house mark since the entity was an internationally known maker of jams and jellies, further contending that due to continuous and extensive use under the label of Shezan, it has become very popular in the country. They also accused Shezan Bakers of imitating the trademark Shezan for their bakery and confectionery products. In their turn, Shezan Bakers furnished the copy of an agreement dated Feb 19, 1975. The petitioner objected that the agreement had been executed by a third party. The details and legal technicalities are best left to the lawyers. But the final decision that came from the Supreme Court authored by a two-judge bench, consisting of Justice Qazi Faez Isa and Justice Yahya Afridi, ruled in favour of the original owners — meaning Shahnawaz Ltd the family from whom Chauhdry Meher-ud-Din bought Shezan.

What are the business implications of the decision?


n short, Shezan Bakeries still get to keep their name but they cannot package their products and sell them to retailers in bulk under the Shezan name. So if Shezan Bakeries, now run and managed by Meher-ud-Din’s grandson, is still allowed to keep the name for their bakeries, what has changed? Essentially, the legal battle was more about the right to expansion using the Shezan name than it was about the name itself. For a long time, in the public eye Shezan the bakery and the producers of the juice and jams were the same thing — or at most a split in an old family business. Because of the added baggage of anti-Ahmadiyya violence against them, there are a lot of urban legends and rumours regarding the ownership but none have quite stuck. Chaudhry’s family, which owns Shezan Bakeries since February 19, 1975, when the restaurants were signed off by Shahnawaz Ltd. to Shezan Services, claims that ever since they bought the Shezan restaurants, any expansions they’ve accomplished are a fruit of their business decisions, their investment, and their efforts, and thus should belong to them, including the name and brand identity that the original owners signed off to them. They also claim that they should not have to change the name because they’ve built this brand over half a century. Shezan Services (the side Shahnawaz Ltd is one) has no interest in owning the name where it concerns jams, jellies, marmalades etc. They also highlight that they haven’t copied the name and brand (logo,

identity, et al) exactly as the original, and that there are slight differences, especially with reference to the Chef’s mascot icon for their bakeries business. The case of owning the name and brand Shezan for the bakery and confectionery business, has been going on for around 33 years. he current situation is such that the Supreme Court has recently ruled in favour of Shezan Services: However, this decision does come with certain limitations, the most major one being that as per the original agreement, the buyers of the restaurants were allowed to operate within territories of Lahore Division only. This sets huge limitations to the businesses of Shezan Services (owners of the restaurants and bakeries), as they can’t expand into even other cities of Pakistan, let alone take their businesses to international levels. On the one hand, Chaudhry envisions smooth operations when it comes to running their bakery business on a phone application, which is the logical next step in this digital age. The app they spoke of, by the way, is up and running, and can be downloaded here. On the other hand, though, one wonders if it wouldn’t be in the best interest of Shezan services to rebrand themselves altogether, so they may continue to grow and prosper.

What else is there to it?


hezan Bakers had been facing several issues despite the popularity of their products. For one, they have had to counter efforts by zealots who would go around actively urging people not to buy from Shezan Bakers as the business belonged to Ahmedis. They even had to print out and paste a declaration of their faith outside all their bakeries. Secondly, they were also facing quite a few counterfeiters, who were going around using the name and slightly altered brand identity of Shezan Bakers for similar products. It is not easy to start, run, maintain, and build a business to heights previously unknown. Chaudhry’s family has invested over 50 years of money and effort into building a bakery and confectionery business that is known for its taste, quality, and standards. Several others, such as Krisco, have tried to replicate the bakery business, but have fizzled out in no time. Having worked so hard to build a following over half a century, it only felt right to obtain a trademark and register their brand officially, to be known for the right things, and to be able to protect their business. n



Uzair Younus

Think about energy security

mitigate geopolitical and domestic stability risks emanating in this transitory world. For Pakistan, this increasingly volatile era could not have come at a worse time. Struggling with domestic political polarisation and economic chaos, the country is already buckling under the weight of higher global energy prices. And while prices have eased recently, providing some breathing room to the government, the rapid devaluation nergy price volatility has shocked and awed the world, of the currency means that there is not enough financial space to pass unleashing a wave of inflation and pain on hundreds on the savings to citizens. In addition, the decision to reverse Imran of millions of citizens. While much of this volatility Khan’s disastrous price freeze has imposed an outrageous political has been caused by Russia’s invasion of Ukraine, it is cost on the ruling coalition government. Continued volatility, as preimportant to recognise that such volatility will be the dicted by many including the authors cited above, will only increase norm, not the exception, in the years to come. This is instability in the country and reduce the financial operating space for because as the global energy economy undergoes what is commonly successive governments. referred to as the clean energy transition, extraction of fossil fuels Pakistan’s policymakers, however, should think about this crisis will become financially and operationally more challenging. For as an opportunity to rebuild the country’s energy sector. As the climate countries like Pakistan, this new era of volatility poses immense crisis inflicts increasing costs on societies around the world, financial risks, mainly because the country is both a major energy importer institutions, especially multilateral ones, will begin to provide astonand struggles to generate enough dollars on its own to meet its ishing levels of financial and technical support to countries seeking to external financing needs. accelerate the clean energy transition. To fully realise this opportunity, This volatile future was forecasted by experts long before Puhowever, Pakistan must harness the capabilities and expertise of its tin’s military invaded Ukraine. Writing for Foreign Affairs in Januown people to develop a strategy to become energy independent. This ary 2022, Jason Bordoff, co-founding dean of the Columbia Climate requires a whole-of-nation approach, as near-term costs will have to School, and Meghan O’Sullivan, professor at the Harvard Kennedy be borne to maximise long-term gain. School, wrote that “talk of a smooth transition to clean energy is This will require marshalling domestic capital to develop indigefanciful: there is no way that the world can avoid major upheavals nous energy sources including coal to reduce reliance on imported fosas it remakes the entire energy system, which is the lifeblood of the sil fuels. Foreign institutions, particularly western ones, are unlikely to global economy and underpins the geopolitical order.” In the same support such efforts as part of a broader push to stop financing of dirty essay, the authors argue that petrostates “may enjoy feasts before fossil fuels like coal. But compared to economies such as India, China, they suffer famines, because dependence on the dominant suppliers and Germany, Pakistan uses a tiny fraction of coal in its energy mix. of fossil fuels, such as Russia and Saudi Arabia, will most likely rise The presence of Thar coal deposits provides a cheap and easily accesbefore it falls.” sible source of energy that is vital for generating sustainable growth in It is almost as if Bordoff and O’Sullivan knew about Putin’s the country. Given emerging global dynamics, this resource will have plans to upend global energy markets ahead of time and could visuto be tapped using domestic capital to create the space for long-term alise how Biden’s recent visit to Saudi Arabia would go. investments in clean energy. Recognising that this volatility will pose a major risk to enerIn addition, a consistent policy environment is needed to gy-importing nations around the world, the authors recommended properly execute this strategy. For far too long, Pakistan’s economy in the same essay that governments ought to proactively seek to has been held hostage by politics, where competing parties deploy a scorched-earth strategy to gain power. Such an approach undermines investor confidence, reducing the total sum of feasible investments and leading to the execution of deals where investors demand exorbitant and guaranteed rates of return due to the country’s risk premium. So long as this continues to be the The writer is Director of case, long-term investments that help achieve energy security and accelerate the country’s clean energy the Pakistan Initiative transition will not materialise. at the Atlantic Council, a A large contributor to today’s economic crisis in Pakistan is the country’s failure to take a longWashington D.C.-based term view on its energy security needs. With energy price volatility becoming the norm and not the think tank, and host of the exception, it is important for all stakeholders to come together and pursue common-sense policies. podcast Pakistonomy. He Anything short of that will only sow further chaos, making it likely that domestic instability will destroy tweets @uzairyounus. the country long before climate change has a shot. n





Ammar H. Khan

Fixing the Oil Conundrum

tion would reduce. If public welfare and avoidance of yet another balance of payments crisis are at the heart of the government, they will start investing heavily in public transportation infrastructure. In the early part of the year, the government spent almost PKR 300 billion on subsidising petrol. If high-impact funds allocation was a target, then the same could have been deployed to launch at least eight mega transportation projects across the akistan consumes more than 21 million tonnes of country, assuming a project cost of PKR 35 billion for the recently petroleum products, of which roughly 80% are inaugurated Green Line in Karachi. A version of Green Line needs imported, while the remaining is refined locally. Deto be standardised, localised and replicated across the country. If pendence on a key energy source is a sovereignty issue the economic incentive exists, there will be a gradual shift from now, as Pakistan continues to struggle with bridging private vehicles toward public transportation, eventually, ridership its external deficit to meet its energy requirements will increase as can be seen in the case of public transit infrastrucwhile remaining susceptible to a sovereign default. The crisis ture across the country. can be managed, but this is the time for course correction, and to The same can be funded through taxes collected from fuel, if take policy decisions that enhance energy security as well as the it is ring-fenced, and exclusively used to fund public transit infrawelfare of people, rather than repeating the same mistakes as if it’s structure. The targeted petroleum development levy is around PKR a groundhog day. 750 billion for the current fiscal year. If even half of this amount is Roughly 80% of all oil consumed in the country is within the ring-fenced for public transportation then it is entirely possible transport sector, which covers cars, motorcycles, trucks, buses, to change the behaviours of commuters, and eventually, reduce and so on. In effect, the demand for imported oil is largely driven reliance on imported oil. Ring-fencing of this amount for public by the transport sector. As urbanisation increases, and so does transport infrastructure can finance more than nine extensive mass urban sprawl, the demand for oil is only going to increase further if transit projects. the same is not contained through policy changes. Similarly, diesel is primarily used by the logistics industry. Looking at further granular data, the country also has more As the country develops, and the overall trade quantum grows, the than 24-million motorcycles on the road, while there are more requirement for diesel is only going to increase further. There is than four-million cars. It is estimated that roughly 40% of all an urgent need to gradually transition towards using railways for petrol consumed in the country is by motorcycles. Most vehicles cross-country transportation, which would require the revitalisaare concentrated within major cities across the country. Assuming tion of Pakistan Railways, which handles less than 5% of total trade that all vehicle owners are part of the labour force, roughly 33% of in the country. Revitalisation of the railway network will not only this force relies on one form of private transport or other. As the reduce the overall cost of transportation but would also reduce relilabour force expands, so will the number of vehicles on the road, ance on imported fuel. The same can also be funded through already resulting in higher oil consumption, and other externalities. existing taxes on diesel. This would require some tough political A radical shift from private transport to public transport decisions, which would include reforming the Pakistan Railways, is required if we need to ensure energy security and reorient our as well as dealing with the vested interests in the logistics industry, trade bill and deficit position. This will also ensure higher disposparticularly quasi-state players operating in the area. able income for the labour force as the overall cost of transportaThe era of near-zero interest rates is over, and reliance on external debt to fund deficits and projects is only going to get more expensive. Project development and execution need to be nimble, highly localised, and easily replicable to enable scalability with minimal foreign currency components. The country needs a public The writer is an transportation enthusiast to execute a national plan on an emergency basis. The upcoming global recession can independent be a blessing in disguise as a reduction in commodity prices would enable the availability of greater fiscal room macroeconomist and to fund such public transport projects across the country. There is a transportation emergency, missing the upenergy analyst. coming trough in the business cycle to reform will keep the country susceptible to a boom-bust cycle, potentially leading to a default within the next few years, if not earlier. n





may be up for sale in Pakistan.

The buyer? Morinaga The business of infant formulas is a big one in Pakistan, and Morinaga is a big name in it


By Maliha Abidi

n March last year, a press release by ICI Pakistan marked what could be a big change in the infant formula milk market in Pakistan. ICI Pakistan was buying the controlling share in NutriCo Morinaga Pvt. Ltd, the company that owns and distributes the Japanese Morinaga infant formula. The acquisition affects the lives of millions of women who are young mothers and mothers-to-be because of how critical the product that Morinaga produces has become. Now, barely a year after ICI’s acquisition, the Japanese parent company and milk moguls Morinaga Milk Industry Co are looking to buy a 33% stake in the ICI subsidiary for a whopping $56 million.


The infant formula business is a big one. Globally, it has been estimated to be worth around $12 billion, and a lot of this success comes from sales of infant formula in third world developing countries such as Pakistan. The history behind infant formula in Pakistan and the ownership of Morinaga is a fascinating one. But to understand it completely, and the hold that products like Morinaga Infant Formula have in countries like Pakistan, it is important to go back and look at the history of infant formula and how we got here.

How important is formula?


here is a time, right after a baby is born, known as the ‘golden hour.’ Medical professionals have termed this a crucial one-hour window right after birth in which it is vital for the new-born baby to have uninterrupted

skin-to-skin contact with their mother. Freshly delivered, the child has just had a major change of environment. After spending nine months in the womb, they are acclimatising to the air, sights, and sounds that are suddenly all around them. The one hour of skin-to-skin contact helps the child establish an immediate relationship with its surroundings. While the baby’s temperature and respiration are adjusting to the world outside the womb, the skin-to-skin contact during the golden hour also helps the mother’s body ‘let down’ the milk, and the baby to search for and latch to its food supply. There are, however, scenarios in which the golden hour does not go as planned. Childbirth is chaotic and at times debilitating for mothers. In a country such as Pakistan, where little attention is paid to female reproductive health. When mothers die in childbirth, or when children are premature and require immediate NICU attention, or when they are born through C-sections rather than natural births the golden hour can be interrupted. According to an article published in 2020 in the UK-based open-source journal Reproductive Health, Pakistan has among the poorest pregnancy outcomes worldwide, significantly worse than many other low-resource countries.The Maternal Mortality Rate in Pakistan was 319 per 100,000 live births compared to an average of 124 in the other sites. Pakistan also has around 22% C-sections, and pre-term and low birthweight rates were also substantially higher than the other sites combined. All of these are scenarios in which that vital ‘golden hour’ connection between mother and child cannot be established. And since children need immediate sustenance after birth, the solution often provided is infant formula milk. Childbirth, of course, has been around since the existence of human life, and instant formula was not invented until as recently as the middle of the 19th century. Up until then, wet-nurses were a common substitute for situations in which the mother could not feed her child. {Note from the editorial staff: Wet-nursing as a profession has thrived since the dawn of civilization and the appearance of class structures. Cross-nursing as a concept still exists, but other than in very rural areas the profession of ‘wet-nursing’ has dwindled out. Historically, it was an established business. It has been referred to regularly in literature. Juliet from the Bard’s Romeo and Juliet is accompanied often by her nurse, and Patrick Suskind’s 1985 novel ‘Perfume’ also features prominently the role and politics of the wet-nurse profession in mid-19th century Europe, which was right before infant formula was invented.}

In 1865, chemist Justus von Liebig developed, patented, and marketed an infant food, first in a liquid form and then in a powdered form for better preservation. Liebig’s formula—consisting of cow’s milk, wheat and malt flour, and potassium bicarbonate— was considered the perfect infant food. After the turn of the century and after the second world war, infant formula was marketed as a necessity. Mothers were told it provided extra nutrients and was healthier than breast milk, on top of which manufacturers also exploited the lack of maternity leave by convincing women they could return to work early after giving birth because their children could be given formula. Medical professionals have disagreed on the merits of breastfeeding versus formula. Currently, the general consensus is that breastfeeding is the better option when the mother is healthy and able, but that infant formula is a vital invention that has saved many lives and made parenting easier for money. However, the history of how infant formula has been marketed is well recorded. A 1981 article in the New York Times (NYT) titled ‘The controversy over infant formula’ explains in depth the prevailing opinions of that era over infant formula, and how poverty was leading a lot of third-world families to prefer formula over breastfeeding because malnourished mothers in developing countries could not produce milk. Business Insider, in a recent article titled ‘Every Parent Should Know The Scandalous History Of Infant Formula’ also shed light on how infant formula became a necessity through exploitation. In, perhaps, one of the scariest instances of aggressive marketing, the earlier mentioned NYT article elaborates on how many companies employed ‘’mothercraft’’ nurses, most of whom wore white uniforms, who visited women in maternity wards and in their homes. As they helped mothers to cope with infant-rearing problems, many of the nurses also promoted their company’s formula. Dressed in traditional nurses’ uniforms, they conveyed the false impression that independent health professionals - not company employees - were recommending formula feeding. The major companies finally responded to harsh criticism of these practices by eliminating first the uniforms and then the nurses who had worn them. Many of these nurses were not even actual nurses, and only dressed as such. Largely, the agreement on infant formula has been that it was an incredible concoction that has saved many lives. However, its corporate picture has not always been a very pretty one, particularly for the developing world.

Pakistan’s history with infant formula


or parents whose children were born in and raised from the 1980s and beyond, they will remember giving Meiji, if not Mead Johnson, and later, perhaps, Millac as well, to their infants and toddlers, with their best interests at heart. The first import of infant formula that became popular in Pakistan came in around 1979, when Unibrands launched Morinaga Infant Formula in Pakistan. Unibrands was a wholly-owned subsidiary of pharmaceutical company Searle, and was founded by Ahmad Manzoor, whose son Shamoon now owns and runs fashion retail company Khaadi. In 1979, the earlier mentioned global push convincing mothers that formula was better for their children was at its peak. Morinaga was a high-quality Japanese product of the Japanese milk giant Morinaga Milk. Unibrands under Manzoor signed a joint venture with Morinaga Milk to provide infant formula in Pakistan, and the venture gave birth to NutriCo Morinaga Pvt. Ltd. This company operated for decades successfully, and Morinaga’s BF-1 became the go-to formula given by doctors and taken by mothers for infants that needed it. According to sources, this was one of the first, if not the first, business to establish the import and distribution of quality infant & growing up formula in the country. At the same time, the industry grew and new players entered the market. Currently, some of the top and/or easily available brands of infant formula in the market include NanGrow, LactoGrow, Aptamil, Enfamil, Meiji, and Morinaga, in no particular order. Because of Pakistan’s large population, it became a major market for infant formula, particularly because it had a lot of mothers that were malnourished and could not produce a sufficient amount of milk. During this time, Manzoor’s family found other avenues for their business. In 1988, his son Shamoon launched the wildly successful fashion retail brand Khaadi, and Manzoor had by now also diversified his business interests. In 2014, Unibrands accepted a bid from ICI Pakistan to acquire 40% stake in its infant formula business — NutriCo Morinaga Pvt. Ltd. At this point, it had been decided that ICI and Unibrand would run this business together to distribute infant formula. Back then it was reported by ICI officials that Morinaga’s products, which target babies up to 12 weeks old, enjoy a market share of 35% to 38%. “Its immediate competitor is another Japanese company Meiji, which


also has a market share of 35% to 40%. “It has a market worth of PKR 20 billion,” said an ICI official. “Around 60% of this demand is met through imports while the rest of the market is led by companies like Nestle.” The ICI Pakistan board had approved an investment of PKR 960 million for a 40% stake in Nutrico Pakistan Morinaga. Thus, ICI and Unibrands began selling Morinaga Milk Japan’s product in Pakistan. The business proved to be a profitable one. At the time of the sale in 2014, Pakistan was spending over $165 million to import milk cream and milk food for infants, according to the Pakistan Bureau of Statistics (PBS). In 2016, heartened by their decision, ICI announced they were setting up a facility at the cost of PKR 4.8 billion to manufacture Japan’s Morinaga infant formula in the country. In March 2021, according to the press release of April 27, 2021, ICI Pakistan announced that the NutriCo Morinaga business with Unibrands was going well. As a result, the board of directors approved a further 11% acquisition of shares in the subsidiary, which meant ICI Pakistan now controlled a 51% controlling share of NutriCo Morinaga, making Unibrands a silent shareholder in the business. Earlier this month, a year after the acquisition, ICI received a conditional offer from Morinaga Milk Industry, Japan for the acquisition of an aggregate of approximately 33.3% of the issued and paid-up share capital of its subsidiary, NutriCo Morinaga (Pvt.) Ltd, against the value of $56 million, which translates to $2.07 per share.

So this means the infant formula industry is thriving, correct?


ell, not really, not necessarily,” says one industry source on condition of anonymity. “Infant formula is not really a consumer good, per se; it’s more of a necessity item. Especially in cases of maternal mortality and malnutrition, and as supplementary nutrition for infants.” There are legitimate conditions which necessitate the availability and dependence on infant formula, as we have already seen from the stories shared by our anonymous sources at the beginning of this story. But they make a valid case for the business of infant formula right off the bat, when they highlight that “When there is a legitimate need, there is bound to be a legitimate business. And if it works, it works.”


A 1981 article in the New York Times (NYT) titled ‘The controversy over infant formula’ explains in depth the prevailing opinions of that era over infant formula, and how poverty was leading a lot of third-world families to prefer formula over breastfeeding because malnourished mothers in developing countries could not produce milk The CEO of a well-known brand of infant formula agrees with him, saying, “It’s the prerogative of a business whether they want to deal in Mercedez or Suzuki. Both will get you to your destination, but there are points to be considered when deciding the quality and potential of either one, and what a business decides is up to them.” “But what any given infant formula business in the world will tell you is that any other animal’s milk is fit for that animal’s offspring, not for a human baby,” our first industry source elaborates. “It is very common in Pakistan, for instance, for parents to give their infants diluted cow’s or goat’s milk, but that can lead to malnutrition of the human baby, and is extremely dangerous. Which is why infant formula companies are in business. Diluting cow milk for the consumption of a human baby may dilute the renal solute load, but the practice also dilutes the protein, carbohydrates, fat, vitamins, and minerals, which defeats the purpose anyway. Not to mention that there is no guarantee that a human child will be able to easily digest animal milk. Hence the need to develop infant formula synthetically.” However, it’s not like any regular business that one can set up upon a whim.

The importance of getting it right


he Codex Alimentarius Commission (CAC) is a 160+ member-countries body that develops food standards and guidelines (down to absolutely specific details, ranging from geographical differences, and socio-cultural practices and needs, right down to specific recipes for food items) for protecting consumer health, among other objectives. It is an international food standards body established in 1963 by the Food and Agriculture Organization (FOA) and the World Health Organization (WHO). This body has more than 15 different committees that work in different areas, and Codex Committee on Nutrition and Foods

for Special Dietary Uses (CCNFSDU) is the one that sets standards for infant formulas, follow-up formulas, and growing-up milks. The Codex Standard on Infant Formula was developed in 1981 based on scientific knowledge available since the 1970’s, and is regularly revised. No infant formula or FUF (follow-up-formula for babies aged six to 12 months) can expect to do business in this field without the necessary approvals and certifications from these bodies. “Infant formula is a scientific effort to replicate human breast milk as closely as possible, and infant formula businesses in the world today will never claim, or even agree, that infant formula is intended as an entire replacement for mother’s milk,” they emphasise. “Koi naim-ul-badal hai he nahin maan ke doodh ka.” The industry may never thrive according to the same parameters as other consumer goods industries do, but it sure isn’t going anywhere any time soon. “In fact, with the current dollar situation, the industry is in fact suffering, and so are the people, and this pertains not just to infant formula but also to products for mothers’ nutrition for when she’s expecting or lactating, which are already quite expensive, being heavily taxed,” the more senior corrects our assumption. What can be said, though, is that it is a strongly knit and powerful industry, with backing from several global bodies such as UNICEF and WHO, involved in fields of public health, food and nutrition, and the like. An example of this is when the recent blanket ban on imports was imposed by the government, it ended up taking in its cruel embrace around eight to 10 raw materials which infant, follow-up, and growing-up formula depended on for their production – the senior tells us that the infant formula industry strongly advocated the need to lift the ban from those items, as they were an absolute necessity, and the government has exempted those raw materials from the bans. n



The recent fall in IT exports, Pakistan’s great new hope, is a reality check posing a number of biting questions for the industry and authorities By Ahtasam Ahmad


hat gave India the respect that they are interacting with the world today? It was their IT industry, which is why you people (Pakistani IT industry) are extra important,” Abdul Razak Dawood, the then Adviser for Commerce and Investment, said in January while praising the industry in his address to the Board of Investment (BOI) IT roundtable conference. The optimism from back then may have fallen flat in recent times as IT exports and services for May 2022 were recorded at $189 million – decreasing by 27% compared to April 2022 and 8% from May 2021. The final numbers are still awaited, but the financial year 2021-22’s export target for the sector, around $3.7 billion, is likely to be missed by a massive $1 billion. Many experts anticipated the end of what has been a dream run for the IT sector, primarily because of the unstable rupee and demand slowdown in the two key markets of North America and Europe.“The post-Covid boom in the IT sector was partly because central banks across jurisdictions printed money and governments announced schemes to promote business


activity. This led to demand creation, which translated into greater interest in the country’s IT sector by foreign businesses,” Asad Ghauri, President Asia-Pacific, and Group MD Europe at NetSol Technologies Inc, told Profit. “Now, the focus is on contractionary measures, and as the funding dries up, demand is likely to plunge, resulting in a difficult next few months for the industry.” Ghauri added. However, the industry has a consensus on the issue that these temporary jitters can do some permanent damage if the structural and policy flaws of the sector are not addressed.

IT sector treated like a stepchild?


he reservations of the industry stem from the lack of policy continuity and initiative by the government. An example is the reversal of the tax-exempt status of the sector in March 2021. “IT industry, unlike traditional industries, operates differently. Changing the tax regime in the mid of the fiscal year, despite the original commitment till 2025, creates not only uncertainty and a state of panic about inconsistent policies but also raises questions about

the understanding of the government about the gravity of the situation of how it will jeopardize the growth,” Pakistan Software House Association said in a statement on their website. A new tax regime allowed 100% tax credit for IT exports on complying with certain conditions. This essentially was a zero tax regime but added additional caveats, including getting an exemption certificate that remained valid for six months. It exposed the IT services exporters and freelancers to the Federal Board of Revenue (FBR) and probably the worst type of red tape in the country. Dealing with the FBR is an inconvenience even for the veterans of Pakistan’s business sector, let alone an IT industry still effectively in its nascent stage. The industry saw hope when then Prime Minister Imran Khan announced an IT reforms package in February 2022 that proposed to revamp the IT regulatory framework through key amendments in the upcoming budget. Among the reforms was a promise to streamline IT sector taxation to facilitate technology services companies and freelancers. However, a few weeks later, the government was toppled, and the implementation of the reform package was never followed through. Yet, this is not the only concern of the sec-


The post-Covid boom in the IT sector was partly because central banks across jurisdictions printed money and governments announced schemes to promote business activity. This led to demand creation, which translated into greater interest in the country’s IT sector by foreign businesses Asad Ghauri, President Asia-Pacific, and Group MD Europe at NetSol Technologies Inc

tor. One primary issue IT services exporters face is the free flow of dollars. Officially, the State Bank of Pakistan (SBP) allows around 30% to 35% retention of foreign currency from exports, but effectively the retention is about 10% due to bureaucratic hurdles. Asif Peer, CEO of Systems Limited, in his address at the IT roundtable conference of BOI earlier this year said: “It is written that we can retain 35% of foreign exchange, but effectively we can only hold onto 10% of the amount.” Another industry leader agreed, telling Profit that, “Even if the government has allowed 35% retention, one still needs to go to the SBP for it and state bank sey baat karna shuru karein tu 6 mahinay lag jatay hain ” Forex retention is crucial for these businesses as they incur certain expenses, like business development, in dollars. Therefore, freeflow restrictions curtail their ability to respond dynamically to market conditions.

Does the government think about IT?


hile the government changed, the problems remained, and those at the IT sector’s helm were keen to resolve them. So the industry sent budgetary proposals to the new government, and the officials gave

assurances of incorporating those into the last budget. Yet the outcome was far from ideal. The budget did not address the sector’s tax issues nor incentivise investment through flexible forex retention policies or export refinance schemes. This leads to the question of whether the government understands the industry or if it is so obsessed with other export sectors such as textile that IT is lost in the background. It is evident from generic speeches government officials deliver at IT conferences that the understanding of how the sector works is quite bleak in the upper echelons of power. (Read more about it in Profit’s article: Startups are brave to operate in Pakistan – because the govt really doesn’t get them) We saw an example of this last year when the FBR went after Payoneer (An American-based payment service platform popular amongst Pakistani freelancers) in a jurisdictional tax issue. Though the FBR might have a point from a legal perspective, how it was handled was chaotic. A national newspaper reported the matter in the following way: “The Federal Board of Revenue (FBR) has said it has uncovered a ‘mega scam’ involving a foreign company transferring around Rs60 billion to more than 70,000 Pakistani citizens without the knowledge of the tax authority.” The foreign company was Payoneer; the

Source: PASHA


70,000 individuals using it were Pakistani freelancers who already struggle with scarce payment channels. The wave of fear and confusion gripped the freelancer community, as represented by a comment from a Pakistani user on a popular freelancing platform calling for everyone to prepare for FBR crackdown and get their documentation together to prove there was no wrongdoing. Such erratic decision-making by officials weakens the confidence of those engaged in the sector – freelancers especially, who are encouraged to hold back their dollars or bring them in through non-official channels. This is one of the reasons why large IT companies like Systems Limited have their holding companies in other jurisdictions. With the likes of Indonesia, Estonia, and Portugal issuing “digital nomad visas”, it will not be a surprise if freelancers also shift base, taking valuable remittances with them.

Supply-side issues


arallel to the lack of policy intervention is the supply side issue. There is a genuine concern about the quality of IT graduates that Pakistan’s educational institutes are churning out. “Our supply side is choked, and there is negligible government intervention when it comes to upskilling our IT workforce,” Naseer Akhtar, Founder, President & CEO of InfoTech (Pvt) Limited, told Profit. Most graduates lack professional skills and are inapt for professional roles. NetSol’s Ghauri expanded on this: “Most of the graduates our universities are churning out lack technical skills and basic communication skills, e.g., writing an email or interacting in English with foreign clients.” The supply constraint also explains why the rapidly depreciating rupee, which makes Pakistani products cheaper for foreign buyers, is not equally reflected in export growth. Gonzalo Varela, a senior World Bank economist, touched on this conundrum in an article for Profit: “If you were exporting recycled cotton towels and the rupee depreciated, you’d now get more rupees per towel. But scaling up

We are producing around 25,000 to 35,000 IT graduates, of which the billable ones are around 7,000 to 10,000. Given that the country’s average yield of IT workers is around $25,000, for every $1 billion in exports we need 40,000 billable graduates Naseer Akhtar, Founder, President & CEO of InfoTech (Pvt) Limited

takes financing for that extra machine to recycle the yarn and the plant expansion.” This same holds true for the IT sector as it fails to respond to market dynamism due to a shortage of skilled workers. “We are producing around 25,000 to 35,000 IT graduates, of which the billable ones are around 7,000 to 10,000. Given that the country’s average yield of IT workers is around $25,000, for every $1 billion in exports we need 40,000 billable graduates,” Akhtar said.

Industry flaws


t the end of the day, the onus does not only lie on the government. The industry has also played its part by not scaling at the required pace. “We as an industry are very reluctant to build and scale. Organic growth might not enable you to acquire that skill set; the M&A (mergers and acquisitions) will help the industry grow faster,” Asif Peer urged the industry leaders at the BOI conference. Further, what is quite apparent is the fact that there is very little differentiation that happens in Pakistan’s IT industry. The business model is to hire people and bill clients for their services to earn handsome profits. The focus on developing bigger and more widely used products such as Software as a Service (SAAS), like Google workspace, Platform as a Service (PAAS), like Google App Engine, and even Infrastructure as a Service (IAAS), like Google Cloud, seems to be missing.

We as an industry are very reluctant to build and scale. Organic growth might not enable you to acquire that skill set; the M&A (mergers and acquisitions) will help the industry grow faster Asif Peer, CEO, Systems Limited

Those who acknowledge the shortcomings of the industry say: “We can’t compete with the likes of India and Indonesia on numbers. They have a larger population and a robust IT education infrastructure dating back to the 90s. What will sustain us is differentiation and creating an identity at a global level.” Most observers state that the situation

screams for reforms and the major players in the sector need to understand that these are unprecedented times for Pakistan’s IT ecosystem. The demand is high, and the firms need to double down and scale. For the policymakers, the time is to act. The Pakistan Development Update, published by the World Bank, suggested the following measures for the revival of exports: Reduce restrictions on foreign currency outflows, increase the $400,000 outflow limit beyond which approvals are required to incentivise firms to register export proceeds in Pakistan, allow firms to maintain greater portions of export proceeds in foreign currency accounts, collaborate and agree on a curricular update with professional and technical advice, recognise credits from internationally quality-accredited online courses (e.g., focusing on the IT sector, coding courses from Coursera and EdX) and support upgrading of firms’ capabilities, focused on new exporters. One would think these should be simple enough for authorities to do. But then, nothing is ever simple in Pakistan, is it? n



Mobilink’s favourite child?

The mobile financial services market has become significant for Jazz, and its success is one of the major things the company is betting on By Ahtasam Ahmad


akistan’s largest telecommunication company, Jazz, is on an experimental spree to overhaul its business model. The Cellular Mobile Operator (CMO) is focusing on the 4G multiplay, meaning the operator doesn’t only want to remain a pipeline, but also evolve as a destination for its customers. Its focus is to encourage users to spend more time on the network by using its digital apps thus, generating incremental revenue. The CEO of Jazz, Aamir Ibrahim, while on a panel discussion arranged by Tabadlab last year, stated, “Jazz was a telecom company. Today we are a tech company; in the future, we’ll be a data company.’ But, what Jazz can be before that is a bank, a digital bank. The digital financial services (DFS) wing of the company that operates under the


brand name of JazzCash has been a successful venture. Considering that this was not Jazz’s forte, the success on the financial services front becomes even more commendable. However, the company seems to be in a rush when it comes to DFS. It has set its sight on massive growth targets built on ambitious lending plans backed by growth in mobile wallet users. Yet, the journey is likely to be risky, with chances of regulatory, structural and internal deficiencies creating stumbling blocks along the way. In this article, we will try to explore where the telco’s financial services product currently stands, what is the journey ahead, and the myriad challenges they are likely to face.



ontrary to popular belief, JazzCash is not a company but a brand under which Jazz offers its financial services. The service delivery is

governed by a joint venture contract between Mobilink Bank and Jazz. The bank takes care of the operational aspects while Jazz looks after technology, marketing and other stuff. As of December 31, 2021, JazzCash had around 39 million mobile wallet accounts holding around PKR 36 billion in deposits. This was a significant growth given that in 2020 it had approximately 28 million wallets while the digital deposit base was PKR 29.5 billion. Furthermore, the closing portfolio for digital lending was around PKR 2 billion while total loan disbursements grossed up to PKR 10-12 billion in 2021. The relatively short tenure for digital loans (around 4 weeks) means that Jazz can lend a more significant amount with a comparatively lower deposit base. Profitability, too, was great for digital lending as with a recovery rate of 95% and an exuberant annualised interest rate of between 160% to 180%, JazzCash lendings were clocking in an Earnings before Interest Tax, Depreciation and Amortisation (Ebitda) of approximately 50% However, the overall JazzCash operations still incurred a loss in 2020 and 2021. Why did this happen? Well, amid the pandemic, the State Bank of Pakistan (SBP) issued circular instructing banks to abolish Interbank Fund Transfer (IBFT) charges to account holders who could no longer go to bank branches or branchless banking agents because of the pandemic restrictions to make these transfers. Slashing these IBFT charges promoted digital payments but took away the primary source of revenue for branchless banking operations such as JazzCash. Simultaneously, growth in the adoption of digital financial services encouraged Jazz to re-think its strategy and move from a payment service provider to a digital bank. As a

After Telecom our biggest foray is fintech. Retailers that are customers of Dastgyr are also Jazz’s customers. We can fulfil their working capital and payments needs while also benefit from the data provided by Dastgyr for better credit scoring Aamir Ibrahim, CEO of Jazz

result, the mobile financial services market has become significant for Jazz. Its success is one of the major things that the company is betting on, not just for future profitability but also for overall valuation. VEON, Jazz’s parent company, as part of its acquisition of Warid from the Abu Dhabi Group (ADG) on July 1, 2016, entered into an agreement with the group. According to the terms of this agreement, ADG would have a right, upon the fourth anniversary of the acquisition, to sell their remaining 15% stake in the combined business (now Jazz, formerly Warid) to VEON at the then established fair value. Therefore, a valuation was completed in December 2020 by the Bank of America, which VEON appointed while ADG appointed City Bank. As a part of the process, both banks estimated the value of JazzCash to be close to $245 million. However, the valuations were significantly affected by the negative margins from JazzCash operations. Still, that meant the company was deriving almost 10% to 15% of its total value of operations in Pakistan from JazzCash, primarily a payment services provider.



s their conventional business model was disrupted by regulatory intervention, putting at significant risk operations of the company, Jazz now sought an alternative to turn things around. Thus, it decided to fast-track growth on the digital lending front. It has plans to open up the mobile user base of 75 million customers for JazzCash lending and has set an aim for disbursing PKR 50-60 billion in the financial year 2023. The lending would consist of 30% consumption and 70% productive loans as Jazz is still using a microfinance licence that restricts certain lending types.

Source: MMBL Financial Statements 2021 The consumption loans would comparatively be smaller, between PKR 1000 to 5000. While productive loans would be 10 times higher in limit. The telco plans to charge monthly interest on these loans between 5% to 10% depending on the time, nature and amount of lending. Also, as per sources, it is expected that JazzCash would be able to maintain an EBITDA margin of 50% on its digital lending. However, what is not clear yet is how these loans are going to be financed. One way could be by utilising the surplus deposits of Mobilink Bank. There were PKR 21 billion of surplus deposits over advances for the bank by the end of last year. Additionally, the bank was carrying zero long-term borrowing on its balance sheet (Which probably explains why Mobilink Bank held back when the whole microfinance sector was on a lending spree). As per sources, the company is also targeting PKR 50 billion in Jazz Cash Deposits by the end of 2023. But expanding the digital lending portfolio would be an uphill task for Jazz given that in comparison to their ambitions, adoption of DFS is still on the lower side. The company is exploring partnerships to introduce a BuyNow-Pay-Later model for its consumption loans. A source, on the condition of anonymity, told Profit that one big avenue for such disbursements would be gaming apps like Pubg where JazzCash aims to provide credit for In-App purchases. Yet, the biggest lending chunk would be to the Micro Small & Medium Entities (MSMEs). Jazz’s strategy is built around providing working capital to this segment and generating the maximum loan cycles from borrowers of the segment. “Mobilink Bank has a keen interest in

Source: MMBL Financial Statements 2021

the digital financial sector of Pakistan and we see a huge potential market in the growing MSMEs of the country,” said Sardar Abubakr, the chief finance and digital officer of Mobilink Bank, during a discussion with Profit earlier this year. To explore strategic opportunities on this front, JazzCash relies on its group company, VEON ventures, to invest in startups and businesses that can help Jazz develop an ecosystem. One such example is Dastagyr, a B2B marketplace startup. “After Telecom our biggest foray is in fintech. Retailers that are customers of Dastgyr are also Jazz’s customers. We can fulfil their working capital and payments needs while also benefit from the data provided by Dastgyr for better credit scoring.” Aamir Ibrahim, CEO of Jazz, stated in a podcast interview in June this year. Though the opportunity to finance retailers might be obvious, what is more, interesting is Ibrahim’s comment on credit scoring; a factor that could be the deal breaker for Jazz’s lending ambitions. The data Jazz’s head honcho was referring to is likely to be generated through D-Core. This is Dastagyr’s backend data app which exchanges information with other interfaces of the startup, such as the retailer app, taking in relevant inputs and feeding back actionable insights and recommendations. It helps the company to determine the creditworthiness of retailers from buying patterns, including order frequency and average GMV to determine buying power as well as the ability to pay set credit terms with retailers based on insights.

Walking on a slippery slope?


istorically, what has kept Pakistan’s digital credit market from growing is the non-existence of sophisticated credit scoring models

Mobilink Bank leverages Jazz’s largest data hub in the country to better equip itself for customer’s credit risk assessment for digital lending. Also, we do have third party service providers that help us build robust AI models for accurate credit scoring Taimoor Farid, Financial Controller & Head of Strategy, Mobilink Bank

to improve the quality of credit. Even large commercial banks haven’t made a breakthrough on that front. (Read more about it in Profit’s article: What’s your credit history?) Jazz, as well as other companies with digital banking ambitions, suffer from the absence of consolidated, reliable data on consumer spending behaviour and detailed payment history. The third-party credit bureaus are also not well equipped to serve them either. The reason is a lack of access to payment, utility, tax and other data points of the population. “Mobilink Bank leverages Jazz’s largest data hub in the country to better equip itself for customer’s credit risk assessment for digital lending. Also, we do have third-party service providers that help us build robust AI models for accurate credit scoring,” said Taimoor Farid, Financial Controller & Head of Strategy, Mobilink Bank. The data points they are leveraging are mainly obtained from three sources; Jazz GSM data, JazzCash account data and customer electronic credit information bureau (eCIB) details. The parameters to assess customer details include the transaction history of an

e-wallet as well as average bill/recharge on Jazz sims. Yet, in-house data is likely to be insufficient to build a robust credit scoring framework. As per Karandaaz’s report, Fintech Ecosystem in Pakistan, published in 2021, “Data-driven credit profiling for the underserved is an opportunity area for consumers and enterprises alike. By using alternative data sources (such as tax payments, mobile phone payments, subscriptions and so on), Fintech can develop credit scoring models for previously unbanked individuals and MSMEs. This enhances access to easy and affordable credit. Credit scoring models have a definitive impact on economic growth and are considered one of the key elements in accelerating inclusion of MSMEs globally.” Furthermore, industry experts suggest that penalising defaulters with actions like blocking sims will also deter habitual defaulters. In any event, it is unlikely that PTA would allow such actions anytime soon. However, sources aware of Jazz’s strategy did acknowledge the fact that the existing credit scoring models are not as robust as

Source: Dastgyr’s investor documents


they are being presented. But the telco is willing to take the risk, backing its high margins to absorb any adverse shocks. Yet, this is not the only problem. To expand rapidly, JazzCash would need to overcome regulatory constraints. It currently operates under a microfinance licence obtained by Mobilink Microfinance Bank (MMBL). This restricts its lending capabilities when it comes to consumption loans. Therefore, Jazz has applied for the digital banking licence and is awaiting a response from SBP. The licence, however, has its limitations. As per the framework introduced by SBP for digital banks, “Aggregate deposits are capped at 25% of the capital for the pilot stage. For the transition stage, aggregate deposit cap would be six times of the capital, progressively increasing to 12 times.” With a capital base of PKR 2.7 billion and approximately PKR 36 billion of JazzCash deposits, the deposit base was close to 13 times the share capital as of 31st December 2021, which means the company is already in breach of the threshold and the figure is likely to skew further given Jazz’s rapid expansion plans. As far as competition is concerned, Jazz is likely to get a run for its money from the dozens of fintech startups that have emerged over the past few years. JazzCash certainly has the financial might in the form of a cashrich sponsor but the value proposition of the fintech startups such as Nayapay and Sadapay is a promise of elevated customer experience enabled by an extensive technology stack. (Read more about it in Profit’s article: How good is the bank in your hand?) A senior official associated with the JazzCash project, responding to Proft’s question about the chances of the expansion not materialising, stated, “Failure is a word unknown to us.” The gentleman is likely to have forgotten the debacle Jazz super app “VEON” was. Similarly, this project is also built on a combination of ambition and practicality and to avoid the fate of the VEON app, Jazz would need to be inclined more towards practicality than ambition. n

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