MuHAMMAD uSMAn KHAn

IN 1999, Nawaz Sharif’s governmentwas toppled by General Pervez-Musharaf mid-way into its five-yearterm. Since then a lot has changed inPakistan. Musharaf enjoyed eight

years in power and is under arrest now. Be-nazir Bhutto, leader of the Pakistan Peo-ple’s Party (PPP) and daughter of legendaryPakistani politician Zulfikar Ali Bhuttocame back to Pakistan from self-imposedexile and was killed. Then in an unexpectedturn of events Asif Ali Zardari became pres-ident. He led the country into the abyss ofcorruption, economic woes, militant insur-gency and power and gas shortage.

After bleeding for five long years, theworst seems to be over for Pakistan. NawazSharif is on course to become Pakistan’sPrime Minister for the third time. Accord-ing to unofficial results, beating expecta-tions and tough competition from PakistanTehreek-e-Insaf (PTI), PML-N has over-whelming majority in National As-sembly. He should be able to

get the re-

quired majority with the help of independ-ents. Since winning the election, NawazSharif is expressing his intentions to givetop priority to the resolution of power crisisand Pakistan’s faltering economy. I feel thatin this regard the new government will havethe following political and economic out-look.

Political

Nawaz Sharif’s success also brings a newpolitical chapter for Pakistan. He is setto re-align both internal and externalpolicies which will have far-reach-ing consequences for the country.

On the internal front, NawazSharif’s handling of the civil-army relationship will beclosely watched. It is widely ex-pected that the civilians will re-take some of their lost ground.Army’s influence over Pak-istan’s foreign policy should

also subside though notcompletely. Nawaz Sharif

does not hide his bitternessat being overthrown in 1999and will ensure that historydoes not repeat itself. In this re-

gard, General Kayani’s impendingretirement will be an important lit-mus test. Nawaz Sharif has already

mentioned that contrary to PPP’sgovernment which continued

to give extensions to thearmy chief, he will beinclined to offer thepost to the next senior

most army man. Nawaz Sharif’s

biggest challengewill come from

the externalfront. Rela-tionships withUS, India,Afghanistan,Saudi Arabia

and Iran will be

closely watched. Historically Pakistan gov-ernment under Nawaz Sharif has remainedclose with both the US and Saudi Arabia.Nawaz Sharif’s initial statements post-elec-tion have revolved around maintaining thistrend going forward. The Iran-Pakistan (IP)gas pipeline will present him with an inter-esting challenge as both U.S and Saudi Ara-

bia are not in the pipeline’s favor. Manybelieve the IP pipeline to be a lifeline forthe faltering Pakistan economy, so NawazSharif will have a difficult situation at hand.I believe project TAPI will get a new leaseof life as an alternative.

Nawaz Sharif is most clear about hisambitions to forge better relationship withIndia. Indian Prime Minister ManmohanSingh has extended an olive branch by con-gratulating and inviting Nawaz Sharif for avisit to India. The invitation will help inmending some of the ill-feeling betweenthe two nations. Kashmir, MFN Status,water disputes, Afghanistan – all these is-sues need resolution and one hopes that

progress will be made on these underNawaz Sharif.

Economic

Nawaz is seen as a conservative and pro-business politician who favors a free mar-ket approach. A better relationship withIndia can serve as a catalyst in revivinggrowth in Pakistan through trade and ifNawaz Sharif’s early actions are anythingto go by, he seems fully committed to thiscause. The MFN status that India has been

seeking should be around the corner.This would ensure ample supply of

perishable commodities in Pakistanand a much needed price relief tothe end consumers.

As we are aware NawazSharif initiated privatization of theinsurance and banking sector inhis 1st term; he might lean to-wards the privatization of the en-ergy sector or involve business

community in some capacity totackle the issues of the power sector.

He may get rid of the ailing publicsector enterprises (PSEs) by privatiz-

ing them. He is also credited with endingthe state monopolies in airline, shipping

and telecommunication sector. With bulls already dominating Karachi

stock exchange, the benchmark KSE100index has crossed 20,000 points mark in thewake of the Nawaz led government. WithKSE 100 gaining 49% last year it will notbe surprise if it crosses 25,000 points markby the end of year 2013. Knowing Nawazgovernment’s knack for heavy investmentin infrastructure projects the biggest gainscould be seen in cement and material sector.

Financing of large infrastructure canlead to higher fiscal deficit if expenditureson non performing public sector enterprisesare not controlled. Also if the new govern-ment starts borrowing for current expendi-tures (includes subsidies, defense, debtservicing etc.) it will become a burden onthe economy, as the additional debt doesnot increase repayment capacity. The re-

sponsibility of preparing prudent budget isgiven to Ishaq Dar.

Ishaq Dar also has an experience of ne-gotiating the IMF bailout package for Pak-istan during the Nawaz Sharif’s 2nd term.His past experience will play a significantrole in negotiating another bailout packageworth $5 billion to resolve the looming bal-ance of payments crisis. This may happenas early as next month to service the up-coming IMF debt repayments. The Coali-tion Support Fund payment of $1.8 billionis expected to be made soon-after the inau-guration of new government. This will helpin bringing the current account in surplus.Additionally the inflow will allay any fearsof a rupee collapse against the dollar.

Revival of FDI will also be high onPML-N’s agenda. While there is no deny-ing of Pakistan’s potential, political insta-bility and security situation has hamperedinflow of FDI. However Nawaz Sharif’sgovernment, as we know, is known for in-frastructure development, openness totrade & investment (reducing taxes on in-ternational trade and easing regulatory bar-riers) and improving institutional quality.This and his government’s amiable rela-tionship with overseas Pakistani businesscommunity and royals in Middle East willplay a vital role in attracting FDI. Thechange of government in Pakistan will af-ford a fresh approach towards tackling theproblem of insurgency in KhyberPakhtunkhwa (KP) and Balochistan.PML’s government is expected to be moreserious about tackling this problem thanthe outgoing government of PPP.

Last time when Nawaz Sharif was inpower nominal interest rates came downfrom 19% to 13% and inflation cooleddown from annual average of 11.8% to5.7%. Nawaz government being pro-busi-ness would like to see the interests ratehead lower from their present levels. Es-pecially with inflation at its lowest levelover last 5 years and reduced pressure onthe rupee will create conducive conditionsfor a rate cut. Nawaz Sharif, during hiselection campaign, also promised disburse-ment of small loans to small & mediumbusinesses. The figure below shows thatduring his 2nd term each year the amountof advances increased to private sector. Pri-vate sector which has been subdued for lastfive years might see an uptick in its creditappetite. Moreover this will help SBP fulfillits mandate of reviving economic growth.

This time around you can sense matu-rity and conviction in Nawaz Sharif’s atti-tude. He sees this as an opportunity forredemption of his earlier mistakes. Wouldhe be third time lucky is yet to be seen.

FPCCI rejects NEPRA’sincrease in power tariff

KARACHI

STAFF REPORT

The Pakistan Federation ofChambers and Commerceand Industry (FPCCI) hasstrongly opposed themassive raise inelectricity tariff by Rs5.82 per unit and termed itan unjustified act by thecaretaker government. In a statement issued onSaturday, FPCCI President ZubairAhmed Malik said that the caretaker government is notempowered to make such decisions and it should leaveall major issues to the incoming elected government toresolve. “At this particular moment when electionshave already held and newly elected house is almostgoing to meet in a few days and the formation of newgovernment is on the corner, NEPRA has announced Rs5.82 per unit increase in electricity tariff which isunjustified and uncalled for,” Malik said, adding thattrade and industry is already suffering badly due tofrequent increases in utility prices particularlyelectricity by the outgoing regime while power outageshave made lives of the people miserable. He said thatduring the last five years no effort had been made atany level whether it was federal or provincialgovernments except lip service. While rejecting anytype of raise in tariffs of utilities by the caretakers,Malik said that even the elected government shouldrefrain from raising gas and power tariffs and insteadpay its full attention to the woes of trade and industrysuffering due to massive load-shedding of electricityand gas. He said that PML-N government shouldseriously pay attention to find out resources of cheapelectricity generation and announce execution ofshelved projects of hydel power projects in order toovercome severe energy crisis.

Last time when nawaz Sharif

was in power nominal interest rates came down

from 19% to 13% andinflation cooled down fromannual average of 11.8% to

5.7%. The nawazgovernment being pro-

business would like to seethe interests rate head

lower from their present levels

What to expect from the new govt

01

buSineSS

BSunday, 19 May, 2013

Don't let your ego get too close to your

position, so that if your position gets shot down,

your ego doesn't go with it. — Colin Powell

Private sector investmentstressed in power generation

ISLAMABAD

APP

Managing Director Oil and Gas DevelopmentCompany Limited (OGDCL) Riaz Ahmed Khanheld a meeting with the delegation of the Islam-abad Chamber of Commerce and Industry(ICCI) to discuss energy situation in the country.

The ICCI delegation was led by its presi-dent, Zafar Bakhtawari.

Riaz Ahmed Khan said that OGDCL is Pak-istan's largest Exploration and Production(E&P) company. It has become the leadingprovider of oil and gas to the country by increas-

ing exploration and production domestically. "OGDCL is going ahead with its mission to

fulfil the country's energy demand and its recentdiscovery will go a long way in this regard,” hesaid. “OGDCL will meet the expectations of itsstakeholders through best management prac-tices and by the use of latest technology,” headded. Bakhtawari expressed concern aboutthe prevailing energy situation in the countryand said that the future of Pakistan lies in at-taining energy sufficiency.

He informed Riaz Ahmed Khan that ICCIhad already organised an energy seminar inwhich various representative of E&P compa-

nies discussed efforts that have been made toovercome the power and gas shortage in thecountry. Bakhtawari said that the governmentshould launch a serious companies for adoptingenergy conservation measures by promoting en-ergy efficiency programmes. He said there is aneed to evolve a new policy to attract privatesector investment in electricity generation toovercome the gap between the demand for elec-tricity and its supply.

He said the main reason for the growingelectricity shortfall is not just the increase in de-mand but also the declining capacity to produceelectricity because of inconsistent policies.

PRO 19-05-2013_Layout 1 5/19/2013 12:17 AM Page 1

buSineSSSunday, 19 May, 2013

TUV Austria merges withMoody International

LAHORE: The wait is finally over as Pakistan

business industry has witnessed the recent merger

of Moody International (Pvt.) Limited – Pakistan

with TUV Austria Holding AG a company established

since 1872, said the CEO of the company Rashid

Mehr. He further elaborated its change of name

from Moody International (Pvt.) Ltd. to TUV Austria

Bureau of Inspection and Certification (Pvt.)

Limited Pakistan. Moody International (Pvt.) Ltd.,

Pakistan began its journey in 1997 with almost no

clientele or brand recognition, today it is the

foremost company & brand in the field of

Certification & Inspection and ranked as a market

leader in our type of industry. Moody International

(Pvt.) Limited Pakistan being an independent

company, recently for the sake of good order

decided amicably & concluded with Intertek Moody

Group to part ways. As a result of that negotiation,

between the management of Moody International

Pakistan and Intertek Moody Group, the company

Moody International (Pvt.) Limited Pakistan became

100% independent and subsequently TUV Austria

Group AG., acquired shareholding in Moody

International (Pvt.) Limited Pakistan. The board of

directors of the company approved the change of

name to TUV AUSTRIA Bureau of Inspection and

Certification with immediate effect. As they say

experience does matter The TUV AUSTRIA Group

AG the parent company is an internationally

renowned brand established since 1872 with its

Head Quarters in Vienna - Austria, one of the

world’s most beautiful capitals, providing high end

technical and engineering services including but not

limited to Certification and Inspection Services and

additionally another 270 services internationally

said Dr. Reinhard Preiss a PHD in mechanical

engineering and International Main Board Director

of TUV Austria Holding AG and a director in the

newly formed company in Pakistan. He further

added that we are very pleased with this

investment as this is one of the major investments

we as a group have done in the recent years in

expanding TUV Austria Brand. After visiting

Pakistan a few times I and my other Austrian

colleagues felt that Pakistan is really a nice country

but unfortunately a victim of perception and the

reality is different from what you hear through

International Media. I really like Pakistan its people

and the unmatched hospitality and encourage all

investors to make use of this opportunity and

invest in Pakistan especiallyif they want to

complete their Business Portfolio. We are also

pleased with the recent elections results in Pakistan

and now you will soon have a new government

sworn in under the able leadership of Mian Nawaz

Sharif who is known to have business friendly

policies and he is very sincere to change the

perception and overall situation of the country, we

congratulate the Pakistani people for having

completed a successful election and for choosing

the leader of their choice. We regard this invest in

Pakistan very important to our future expansion

plans and brand loyalty in South Asia and Middle

East. Rashid Mehr said the motto of the company

is QUALITY NOT QUANTITY with HSE being

paramount factor in our business. From our initial

experience with them we can tell you they inhale

Quality and exhale Quality only. Their attitude is no

compromise on Quality and “zero tolerance” policy

towards unethical practices & HSE. PRESS RELEASE

Daewoo starts returntickets and seat bookingat all bus terminals from20thLAHORE: From May 20, the management of

Daewoo Express is starting another facility for its

customers by providing return tickets and seat

booking for any route at all bus terminals. Naeem

Ullah, Manager Marketing, said that the availability

of return tickets would facilitate the passengers

especially those who travel frequently from one city

to another. Advance return ticket would help them

to make their travelling plans. He added that the

drivers and passengers have been suggesting that

ticket booking should be available at all bus

terminals. After considering the suggestions and

facilities of the passengers, now the tickets are

available for all cities at every bus terminal.

Daewoo Express is playing an important role in

growth and development of the transport sector of

Pakistan. Daewoo Express is a well-connected and

organized bus network that connects the people of

different provinces. PRESS RELEASE

Pakistan State Oillaunches Fuel Smart CardsKARACHI: Striving to provide ever greater value

to its customers, Pakistan State Oil (PSO) has

reached yet another technological milestone by

introducing chip-based Smart Cards. These fuel

cards are the first of their kind to be launched by

any OMC in Pakistan. The formal launch ceremony

was organized under the theme of “Your World Just

Got Smarter!" at DHA Golf Club, Karachi. The

launch event featured high-profile guests and

decision makers from across the corporate sector.

The event highlights included performance by the

country’s leading musical band as well as a laser

show by a foreign artist. Introduced with the

objective of providing increased convenience for

PSO card customers, these fuel cards incorporate

added security features in the form of chip-based

encryption technology which secures all customer

information residing in the chip from unauthorized

access. Usage of these cards will benefit corporate

customers by facilitating administrative

supervision, economizing fuel expenses and

selection of customized cards options. Speaking at

the occasion, CEO & MD PSO, Mr. Naeem Yahya

said, “Through the launch of this Smart Card, PSO

has further underlined its standing as a customer-

centric company which is continually introducing

new products and services to provide ever greater

benefits to the consumers at large.” During his

speech the MD also reiterated PSO’s vision of

transforming itself into an integrated Energy

Company. He stated that in its efforts to achieve

this goal, the nation’s leading public company has

been introducing new innovative ideas to offer

increased value for its customers. PRESS RELEASE

Pakistani executivebanker selected as YaleWorld FellowKARACHI: Pakistani national and Doha Bank

executive Raheela Khan has been named a 2013

Yale World Fellow, announced Yale University

President Richard C. Levin. Khan is Assistant

Manager of Treasury and Investments for Doha

Bank, a major Qatari financial institution. A

Pakistani national born and raised in Dubai, Khan

currently manages a portfolio in excess of US$600

million. She is an experienced and knowledgeable

professional with a deep understanding of the

financial markets of Pakistan, UAE and Qatar.

Previously, Khan was instrumental in transforming

the investment culture in Pakistan through senior

leadership roles at institutions such as the

Pakistan Mercantile Exchange. She did this by

introducing new financial products to the Pakistani

market and convincing local institutions there to

adopt cutting-edge international investment

strategies thereby developing her domestic

financial markets, which Khan believes have

immense untapped potential. PRESS RELEASE

CORPORATE CORNER

02

B

A budget tells us what we can’t

afford, but it doesn't keep us from

buying it. — William Feather

KARACHI: Indonesian Consul General Rassalis R Aadnan inaugurates Thai travel mart. Former cricketer Moin Khan is also present. STAFF PHOTO

SRInAGAR

NNI

WITH cross Line of Control (LoC)trade losing its sheen with everypassing day, traders at Salam-abad in Uri have accused Cus-toms Department of

demanding duty on apples beingbrought in from Muzaffarabad.

The traders alleged that the list ofthe items being exchanged acrossthe LoC has been regularly broughtdown and no revision of the list hasbeen done over last so many years.According to a local news gatheringagency KNS, the traders at Salamabadalleged that the department stopped theapples for they demanded to levy tax on them.

The traders alleged that the list of the itemsbeing exchanged across the LoC has been broughtdown and “no revision of the list has been done overlast so many years.” The traders said the custom au-

thorities at TFC stopped apples worth Rs 1.5 crore.“Custom officials are not allowing us to lift the ap-

ples from the TFC.” KNS quoted General Secretary Is-lamabad Chakoti Trade Union Hilal Turki as saying. Headded that it appears that the officials want to levy cus-

toms duty on apples which is against the rules.“This is a custom free intra Kashmir trade and

both India and Pakistan have already agreedto keep it custom free. I don’t know why

these people are creating impedimentsin the process,” asked Turki.

A custom officer at Uri howeverrefused to comment saying he

does not know anything aboutthe matter. “I don’t knowabout this and can’t comment

on it,” the official, who did notreveal his identity told KNS over

phone. Cross LoC trade between the twodivided parts of Kashmir began in 2008, however, thenature of the trade has been ‘barter’ and both the coun-tries despite repeated demands, have not as yet agreedto open the banking and communication facilities.

Another roadblockhits cross LoC trade

MOnITORInG DESK

In a major policy shift, tax authorities are contemplatingholding back the process of abolishing federal exciseduty on goods and services, started two years ago, andinstead want to impose the duty on two dozen items innext year’s budget.

The items include cosmetic products, racing cars,filter rods of cigarettes, lubricant oils, air conditioners,deep freezers and various types of other oils.

Sources in the Federal Board of Revenue revealedthat tax officials have proposed that the policy to phaseout Federal Excise Act of 2005 over three years may beabandoned from the next fiscal year, 2013-14, followingthe previous government’s move to abolish duty on 25revenue-generating items which hit tax collection hard.

If the duty stays, it will generate billions of rupeesnext year, but the final decision will be taken by the Pak-istan Muslim League-Nawaz government that is poisedto take the reins of the country after winning generalelections. Sources said excise duty on most of the goods

had been removed by the last government as an incen-tive to the private sector to bring down product prices.But the duty on some of goods like motor oil and wasteoil was scrapped allegedly in the face of pressure fromsome vested interests and in return for kickbacks.

The exchequer suffered a revenue loss of Rs 8 bil-lion on just these two items, they said.

Excise duty is universally imposed to curb con-sumption of luxury items, but this principle is violatedby successive governments as the duty is levied on manyessential items as well, said Ashfaq Tola, a renownedchartered accountant from Karachi and a tax expert.

PoST-eLecTion PoLicy ShifTfbR seeks to revive excise duty regime

PRO 19-05-2013_Layout 1 5/19/2013 12:17 AM Page 2