| ABC FLASH --- January 2011
To keep you abreast of all ABC activities, we will be sending you an update every month.
ABC EXCOM MEETING – 7TH JAN. 2011
Mr. Humayun Bashir, Country General Manager, IBM, was elected President ABC and Mr. Saad Amanullah Khan, Chief Executive Officer, Gillette Pakistan Ltd., was elected Vice President for 2011. The members of the ABC Executive Committee 2011 are Mr. Tauqir Ahmed, Chief Executive, DuPont Pakistan Operations (Pvt.) Ltd.; Mr. Tasleemuddin Ahmed Batlay, Director, Colgate-Palmolive (Pakistan) Ltd.; Mr. Shabeeh Ikram, General Manager, Johnson & Johnson Pakistan (Pvt.) Ltd.; Mr. Antoine Joignant, Area Manager Pakistan and General Manager Sheraton Karachi Hotel, Starwood Hotels and Resorts; Mr. Akram Wali Mohammad, Chief Executive, Gerry’s International (Pvt.) Ltd.; Ms. Zehra Naqvi, Chief Executive, ACE Insurance Ltd.; Mr. Faisal Sabzwari, Country Manager, Procter & Gamble Pakistan (Pvt.) Ltd.; Mr. Rizwan Shafi, EVP, Crescent Bahuman Ltd.
At the meeting, the members agreed to form the following Sub-Committees and appoint the respective Chairmen.
Finance & Taxation - Mr. Saad Amanullah Khan
Industry & Trade - Mr. Tasleemuddin A. Batlay
Pharmaceutical & Agricultural Chemicals - Mr. Asif Jooma
IPR, Govt. Relations & Legal - Dr. Aamir Matin
Security - Mr. Antoine Joignant
HR, CSR, Social & Human Development - Mr. Tauqir Ahmed
Media, PR & Programs - Mr. Akram Wali Mohammad
Membership & Admin. - Mr. Shabeeh Ikram
North Members - Mr. Rizwan Shafi
While setting their key priorities and action plans for the year, the 2011 ExCom remain committed to upholding the ABC mission - ''
To Protect and promote the interests of US Investors in Pakistan; To encourage and stimulate new investments; To introduce and inculcate best practices; To strive to establish a level playing field in the country in order to promote the development of commerce between the USA and Pakistan ''
1st ABC CEO ROUNDTABLE MEETING OF 2011 – 26TH JAN. 2011
The President ABC shared with the members present the ABC’s Key Focus Areas & Targets for 2011:
• To raise the profile of the ABC so as to ensure it is seen not only as a progressive body but also results in the greater participation and engagement of members.
• Increase the inclusivity of the North-Based membership
• Play an active role and engage with Govt. bodies, including IPOP, FBR, BoI and relevant Govt. ministries.
• Lobby the Govt. on taxation issues effecting ABC member Companies
• Address the issues posed by the power sector and engage with the Govt. to try and find solutions
• Seek ways of working around the law & order and security threats effecting the smooth running of business in Pakistan
• To recognize the contribution of ABC members towards their commitment to continuously upgrade processes, systems, products and services, and create value for their employees, existing and potential customers and the local communities they operate in.
It was also agreed that the Key Focus Areas & Targets for 2011 will be reviewed every quarter and measured against Key Actions such as:
• Implementation through the EXCOM and Sub-Committees of the ABC
• Running of regular CEO Roundtables, Speaker Programs, US Embassy interaction to engage all ABC members
• Provide budget proposals to FBR and Ministries to seek changes to Tax and related policies ( Tax, IPR, Trade , etc)
• Engage the ABC North-based membership via quarterly visits by the President/VP/Executive Director and other ExCom members and through a CEO Roundtable, meetings and events.
• Engage with the TV and Press Media to air the ABC message via interviews, talk shows and articles
• Hold a fund-raiser to increase the capacity of the ABC to engage in research, PR activities and Investment Forums in the future
The CEO ROUNDTABLE was attended by members of the ABC, who shared their views on how their businesses fared in 2010, their plans for 2011 and the issues and concerns they are currently facing. The key points of the discussion included:
• The economy will go through a challenging patch in 2011, but the outlook for 2012-15 starts to look positive as per the BMA report and other economists
• ABC CEO’s have hope that the political stability and dialogue between parties will bring agreement on different economic issues
• Despite of the difficult security and economic situation; pockets of the economy are doing well and businesses continued to invest in 2010 and plan to do so again for 2011. ( 60% did well in 2010 , and 40% plan to invest more)
• Sectors like IT , FMCG , Agriculture are attracting more investment
• Key Challenges highlighted were:-
– Cost of doing business , high interest rates/ cost of Power & utilities (Gas)
– Security Situation over all, plus personal security and travel issues.
– Taxes and inconsistency of Govt. policies.
The ABC members also benefited from an insightful economic overview presented by Mr. Farrukh Khan of BMA Capita, who highlighted the challenges that Pakistan has faced in 2010 but which have not hampered growth; and an emphasis on fiscal management being the need of the hour. The presentation was followed by an interactive Q&A session.
ABC PRESS BRIEFING – 26TH JAN. 2011
Post the CEO Roundtable, the President ABC, Mr. Humayun Bashir, accompanied by the Vice President, Mr. Saad Amanullah Khan, Mr. Shabeeh Ikram and Mr. Akram Wali Mohammad met and explained to reporters the current sentiments, positive growth and concerns of the American companies operating in Pakistan. Press clippings are attached.
EXCOM BREAKFAST WITH THE US CONSUL GENERAL KARACHI – 28TH JAN. 2011
The US Consul General, Mr. William Martin, invited the newly elected ABC ExCom for breakfast at the recently opened Consulate on Friday, 28th Jan. 2011. In an open and candid discussion, the main topics encompassed were:
• The ExCom briefed Mr. Martin on the feedback gleaned from the CEO Roundtable meeting, including the business forecast for 2011 and the concerns voiced by its members.
• Mr. Martin assured the ABC that he would support increased interaction between the Consulate and the ABC and would aid the ABC’s request to arrange regular meetings with Ambassador Munter, including the ABC’s plans to invite the Ambassador to Karachi for an event involving ABC members and their guests. He also pledged to help the ABC increase dialogue with the government in any way he could.
• The ExCom were also briefed on the facilities available at the new Consulate premises including the increase of visa issuance. At present the visas issued from Karachi are for categories including students, the elderly, renewals and business travel. The staff at the Consulate hope to shortly increase this to provide visas for all applications made in Karachi.
UPCOMING VISIT OF ABC PRESIDENT TO ISLAMABAD & LAHORE – 8TH TO 10TH FEB. 2011
The ABC is committed to increase its interaction with its North-based members and for this purpose, the ABC President, Vice-President and certain ExCom members will be travelling to Islamabad and Lahore in early February. Meetings have been requested with key stakeholders including senior govt. and Embassy officials in both cities. The Chairman of the North-based Sub-Committee is also aiding the ABC in arranging a lunch with the North-based members on 10th Feb. in Lahore, at the request of the ABC President. This lunch will give the North-based members an opportunity to network with the ABC ExCom, each other and voice their opinions and concerns.
ABC PRESIDENT ATTENDED BOI OFFICE LAUNCH
The ABC President attended the BoI office launch for their new premises in Karachi
ABC PRESIDENT ATTENDED SWISS CONSUL GENERAL DINNER – 27TH JAN. 2011
The ABC President attended a dinner on 27th Jan., hosted by the Swiss Consul General Mr. Didier Boschung for all the Business Forums, OiCCI and United Nation Global Compact Pakistan Local Network. The ABC was amongst 7 chambers in attendance, where they were shown a presentation covering the United Nations Global Compact session. The ABC President will brief Excom in next meeting.
| ABC FLASH --- February 2011
The ABC activities during February are given below for your information:
• Meeting with Mr. Saleem H. Mandviwalla, Minister of State & Chairman, Board of Investment (BoI) at the BoI Karachi office. The Chairman BoI graciously agreed to endorse ABC’s request for active representation on the Advisory Councils of the Ministries of Commerce & Finance. ABC team comprised , Humayun Bashir , along with Mr. Batlay, Mr. Wali Mohammad and the Executive Director.
• The Executive Committee of the ABC met for their 349th meeting at the ABC office. The salient features of the meeting included the confirmations of the members of the Sub-Committees, a discussion of the President ABC and team’s upcoming visit to Islamabad and Lahore, and the ExCom’s unanimous support of Dr. Aamir Matin’s idea of holding an ‘ABC Economic Forum’ in Islamabad later this year as a signature ABC event.
Feb. 8th, 9th and 10th (ABC’s North Visit)
On Feb. 8th the ABC President, along with the Executive Director, met with Mr. Asaf Ghafoor, Director General of the Directorate General Trade Organizations (DGTO) and Mr. Javed-ul-Hassan Qureshi, Director DGTO at their office in Islamabad. Amongst the issues discussed was the feedback from the ABC CEO Roundtable and the ABC’s membership categories. The DGTO assured the ABC of their support and clarified that the ABC is the only single country Chamber that has been afforded the status of ‘Chamber’ in Pakistan, in accordance with their rules. As per the rules there cannot be another parallel Chamber.
• Meetings were held at the US Embassy in Islamabad on 8th and 9th February by the ABC President, along with the Vice President, Executive Director, Dr. Aamir Matin and Mr. Farrokh Captain; as follows:
Met Ambassador Robin Raphel, Coordinator for Economic & Development Assistance at the US Embassy in Islamabad. Mr. John Simmons, Commercial Counselor, also attended the meeting. The President ABC briefed Ambassador Raphel on recent ABC activities and reiterated the ABC’s commitment to raise its profile, increase its interaction with the govt. and with the US Embassy and officials. The ABC requested that it be kept informed by the US Embassy regarding any projects in the pipe-line that its members can be involved in, especially USAID initiatives in particular. The ABC also discussed its idea of an ‘ABC Economic Forum’, to be held in Islamabad in September, as a signature ABC event. William Baldridge, Director Economic Growth USAID and Ms. Denise Herbol, Senior Deputy Mission Officer USAID. The meeting was also attended by Mr. Zachary Orend, Economic Growth Adviser USAID. The discussion included how the ABC can tie up with USAID programs and be actively involved and help USAID build their ‘brand equity’ in Pakistan. Mr. Baldridge also expressed his enthusiasm and the support of USAID for the planned ‘ABC Economic Forum’. The ABC nominated Dr. Aamir Matin to lead this project and liaise with the US Embassy with Mr. Chris DeAngelis, Economic Consular and agreed to share ABC proposals and ideas. The ABC team also met with Ms. Aroosha Z. Rana, Second Secretary of the Visa Section and discussed the visa application process and feedback from ABC companies regarding the subject.
• On Feb. 9th the ABC President, along with the Vice President, Mr. Rizwan Shafi Chairman North-based members Sub-Committee and the Executive Director attended a dinner for ABC/ABF members hosted by Mr. Salim Ghauri at his residence in Lahore. The ABC and ABF agreed to try and find opportunities to share information as a confidence building measure and work together towards a common purpose – especially as a number of members are in common with both the ABC Chamber and the ABF. The joint members of the ABC/ABF reiterated their commitment to remaining members of the Chamber.
• On Feb. 10th the ABC President along with the Vice President, Mr. Rizwan Shafi and the Executive Director met with Ms. Carmela Conroy, US Consul General in Lahore and Ms. Jessica Berlow, Economic Officer. The ABC presented an overview of its activities and concerns and it was agreed to share information and maintain contact with the US Consulate staff in Lahore.
• The 1st meeting of ABC’s Finance & Taxation Sub-Committee for 2011 was held at the ABC office to review the ABC suggestions for the Federal Budget 2011/12. The Chairman of the Sub-Committee, Mr. Saad Amanullah Khan confirmed Mr. Iqbal Shekhani as Co-Chair. It was agreed to review and update last year’s proposal, incorporating inputs sent in by ABC members. The Sub-Committee also decided that the finalized proposal would be shared with all stake-holders, including govt., US staff, other Chambers and business forums, as well as with the media.
| ABC FLASH --- April 2011
The ABC activities during April are given below for your information:
The ABC ExCom meet with the Governor of Sindh, Dr. Ishrat ul Ebad Khan at the Governor House, Karachi, where they were given the opportunity to share some of the issues and concerns facing the ABC member companies, in particular regarding rising security threats. The Governor kindly agreed to allocate a dedicated resource for the ABC as a contact point when faced with these issues. In further discussion, the ABC Executive Committee also proposed that the Governor House consider undertaking a pilot project to rid certain areas of Karachi of street crime and lawlessness and suggested I.I. Chundrigar Road as an appropriate launch-pad, which would send the right message to the business community.
The President ABC, Mr. Humayun Bashir, met with the Finance Ministry Advisory Council, followed by a meeting with the President of Pakistan in Islamabad. The issues discussed included: circular debt, personal security, public sector enterprises, and the creation of a roadmap – a ‘Charter of Economy’. While the meeting was too large for constructive dialogue, the ABC was well promoted amongst the stakeholders present.
The ABC Vice President, Mr. Saad Amanullah Khan, attended the conference held by the Pakistan Business Council (PBC) in Islamabad, which he observed was marked by its professionalism and well attended by prominent business leaders, along with representatives from all political parties (save the ANP). The PBC shared two documents - one a summary of the recommendations made by their sub-committees and the other, a 50 page working paper. The PBC is seeking commitment from the major political parties to engage in a dialogue for developing consensus on a common minimum National Economic Agenda (NEA), which they will further through the formation of a working group and engaging in dialogue to finalize the NEA which will require the approval and sign off by the top political leadership of each party, including agreement on the implementation mechanism.
Members of the ABC ExCom met with Mr. John Simmons, U.S. Counselor for Commercial Affairs, at the ABC Secretariat. The discussion encompassed a number of issues ranging from managing current and bringing in new U.S. investment in Pakistan in an atmosphere rife with security concerns; the regulatory environment in the Pharmaceutical industry and IPR issues; apprehensions over the impact of the ATT treaty and encouraging trade between Pakistan’s and its neighboring countries. It was agreed to share both the ABC Suggestions for the Federal Budget and Trade Policy with Mr. Simmons, who agreed that the U.S. Embassy should drive the same issues in parallel.
The Executive Committee of the ABC met for their 351st meeting at the ABC office. The salient features of the meeting included a review of the framework of the ABC Economic Forum, the analysis and approval of the ABC Suggestions for the Federal Budget 2011-12, discussion of the appointment of a legal firm to aid the ABC office and an agreement over sending the application for the renewal of the ABC license to the DGTO.
Members of the ABC Membership & Admin Sub-Committee met for a second time to engage in discussion with Mr. Khurram Rasheed, Barrister, Surridge & Beecheno. The dialogue was to gauge whether the ABC would benefit from the hiring of a legal firm, identifying the scope of work, and realizing the cost implications. Mr. Rasheed also advised the Sub-Committee regarding the it’s current membership criteria and its application to the DGTO for renewal of its license.
| ABC FLASH --- May 2011
The ABC activities during May are given below for your information:
• ABC Guest Speaker Program with the Federal Finance Minister, Dr. Abdul Hafeez Shaikh
The Finance Minister Dr. Adbul Hafeez Shaikh, accompanied by the Secretary Finance, Dr. Waqar Masood Khan, and Chairman FBR Mr. Salman Siddique, met with the members of the ABC and their guests in Karachi on Saturday, 21st May. Acknowledging the issues inherited by the present Government, Dr. Shaikh stated that the sentiment in the country should be positive. He stressed that in recent time’s stability and growth have emerged, additionally we have a functioning democracy, strong judiciary, freedom of press – a constructive time has begun. The Minister also reiterated the Government’s vision of an economic roadmap via the contents of the last Federal Budget – to maintain stability, protect the recovery process, increase growth trajectory, tighten Government expenditure and try and generate new sources of revenue and protect the poor during this transition. He emphasized there have been encouraging statistics emerging as exports have increased significantly, remittances are good and the pricing of commodities has been on par with an international level. The Government has also made serious efforts to expand the tax net, increase refunds, and is committed to keeping price increases in check. The members of the ABC also took the opportunity to reiterate their tax proposals and engaged in an interactive Q&A session with the Minister, Secretary Finance and Chairman FBR.
• ABC Guest Speaker Program with the U.S. Ambassador H.E. Cameron Munter
Ambassador Munter, accompanied by Consul General William Martin, attended a lunch with ABC members on May, 9th at the Sheraton Hotel, Karachi. The Ambassador welcomed the opportunity to speak with the ABC and reiterated the importance of a continuing dialogue between the U.S. Govt. and the people of Pakistan. He hailed the elimination of Osama Bin Laden as a victory for both the American and Pakistani people, as well as the rest of the civilized world. He further paid his respects to all those Pakistanis who have been fighting and have been victims of the war on terror. While on the subject of Pakistan’s economic prospects, Ambassador Munter stressed the need to address two areas in particular – the energy crisis and increasing the tax base, and urged the business community to push for change.
• ExCom meeting with Mr. Zafar Mehmood, Federal Secretary Commerce
The Secretary Commerce, Mr. Zafar Mehmood, attended a meeting at the ABC office on 30th May, with the President ABC, Mr. Tasleemuddin A. Batlay and the Executive Director. The Secretary was accompanied by Dr. M. Usman, Director General (Sind & Services), and Miss. Rubina Ghanghro, Director (Services). During the course of the meeting, the Secretary Commerce highlighted the need to promote a positive image of Pakistan in the US and encourage investors/traders to visit. He sought the ABC’s help in this matter, with particular regard to the textile industry. He further encouraged the ABC to keep up an on-going dialogue with the Ministry of Commerce and TDAP on IT issues as well as on other export potential areas, e.g., textile, consumer products. Mr. Mehmood accepted the ABC Trade Policy Proposal and advised the ABC to continue functioning while their license renewal appeal is under process.
• Meeting with the Chairman IPO-Pakistan
The ABC President, Vice President and Mr. Faisal Sabzwari, Chairman of the IPR Sub-Committee, attended a lunch hosted by the Chairman IPOP held on Wednesday, 18th May. Also present were the OICCI President and KCCI Team, plus lawyers and businessmen. The Chairman IPOP spoke candidly and accepted nothing has been done past 5 years and Pakistan is on Special Watch List. He also admitted the Board should have the active participation of MNCs. He further agreed to visit each of the 3-4 chambers and attend briefing presentations. The President ABC welcomed this change and emphasized the importance of engaging with the ABC for feedback and assistance in tackling IPR issues and getting Pakistan off the Watch List.
• May 2011 ExCom meeting
The ABC ExCom meeting was held on Friday, 6th May and amongst the main topics discussed were the ABC’s status regarding the DGTO and SECP. It was agreed to engage the law firm Orr Dignam to advise the ABC accordingly in matters ranging from renewal of the DGTO license, registering the ABC as a Section 42 company and amending the ABC Articles of Association. The ExCom further reviewed the progress on the ABC Economic Summit and agreed to shift the event to Karachi in September, with the Vice President leading the project. The ExCom also ratified the ABC Suggestions for the Trade Policy 2011-12. The meeting ended with the ExCom agreeing to hold 2 CEO Roundtables in June in Karachi and Lahore, post the Budget.
• 2nd Security Sub-Committee meeting
The Security Sub-Committee met and were briefed on the ExCom meeting with the Governor Sind and agreed that the ABC must continue to exert pressure on the Governor House to address their security concerns. It was also agreed to set up a meeting with the CPLC and carry out a security survey in order to put together a presentation for this meeting. The development of a Security Manuel and sharing best practices were also noted. The initiative of the SMS Security Alert System was discussed, it’s modalities finalized, and the Sub-Committee agreed it was a service that would prove very useful to ABC member companies, to keep everyone abreast of security alerts and concerns.
| ABC FLASH --- June 2011
The ABC activities during June are given below for your information:
2nd CEO ROUNDTABLE 2011
Held on Friday, 10th June, the 2nd CEO ROUNDTABLE of the year was held to discuss the implications and impact of the Budget. Keeping in mind the constraints the Government is under regarding budget gaps, the tax culture and lower FDI etc., the Federal Budget was perceived positively by U.S. companies. The ABC was particularly pleased to note the Government is taking steps in the right direction and is finally working towards expanding the tax net, alleviating some of the pressure on the business community who already contribute a substantial proportion of taxes. Amongst the positive aspects of the Federal Budget, as noted by ABC member companies, are the elimination of Special Excise Duty of 2.5%, the lowering of the Sales Excise Duty by 1%, the removal of 392 items from additional regulatory duty (luxury goods), reinstating allowance for bad debt for banks, the reduction of many pharmaceutical raw materials to a flat 5% customs duty, the elimination of the restriction on 90% on input tax claims from fixed asset and capital goods, and not increasing corporate tax, while eliminating flood relief tax.
The ABC did, however, also make note of some of the negative aspects of the Federal Budget, including the fact that the process of blacklisting suppliers has become even harsher for companies who have done business with them before they were blacklisted; instead of moving to the Normal Tax Regime, services moved to the Final Tax Regime (Presumptive Tax Regime); there is no resolution to delink WWF/WPPF from corporate profits – making Pakistan the only country to link labor welfare to profits instead of labor payroll or enrollment; and there is no differentiation between tax and non-tax payers to encourage people/companies to come into the tax net. Additionally it was also noted that the imposition of 15% Sales Tax on Software may further encourage piracy and counterfeits especially as our IT sector is still in its infancy.
ExCom meeting with Chairman IPO at the IPO (Trade Mark Registry office, Karachi)
The ABC President, Vice President, Chairman of the Industry & Trade Sub-Committee Mr. Tasleemuddin Batlay, Chairman of the IPR Sub-Committee Mr. Faisal Sabzwari and the Executive Director met with the Chairman of the IPO, Mr. Hameed Ullah Jan Afridi and other members of the IPO on Thursday, 16th June 2011. Mr. Sabzwari gave a presentation regarding the infringement of IP rights of ABC companies and suggested remedies. In turn, Mr. Afridi stated that the IPO are initiating reforms to improve their working and are actively involving the media to highlight the role of IPO in protecting IP rights and creating awareness among the masses especially the business community to get their trademarks, patents, copyrights registered. He further stated that the process of establishment of IP tribunals was in progress and two provinces had so far been sent their consent in this regard. He further assured the ABC that the Policy Board of IP would be constituted soon and give due representation of government as well as private sector. Mr. Afridi immediately accepted the ABC’s suggestion that whatever copyright is filed for registration should first be referred to Trade Mark Registry to avoid overlapping of IP rights.
June 2011 ExCom meeting
The ExCom meeting was held on June 3rd at the ABC Secretariat, where the amongst the main topics of discussion was the ABC Economic Forum. The date was finalised for Saturday, 17th Sept 2011 in Karachi and the ExCom agreed on possible names for speakers at the event. The ExCom also noted their appreciation of the efforts of the Vice President in securing the Tax Exemption for the ABC. It was also agreed to engage the law firm Orr Dignam to manage the renewal of the ABC license from the DGTO, the filing for Section 42 status with the SECP and the amending of the ABC Articles of Association. Other issues discussed included outstanding subscription payments of members and a review of the attendance of the ExCom at monthly meetings.
IPR Sub-Committee meeting
The newly formed IPR Sub-Committee held its first meeting on June 8th, under the aegis of it’s Chairman, Mr. Faisal Sabzwari. The Sub-Committee discussed the upcoming ABC meeting with the IPO Chairman on June 16th, and gave their input towards the ABC presentation being prepared by the Mr. Sabzwari on our key priorities and proposed actions The ABC had already formulated a position paper and the Sub-Committee reviewed and shared their feedback on the document.
Finance & Taxation Sub-Committee meeting
The Sub-Committee met on Thursday, 9th June at the ABC office to share their feedback on the Federal Budget 2011/12 – outlining both its positive and negative aspects. Feedback from this meeting was collated by the Chairman, Mr. Saad Amanullah Khan, to be shared at the 2nd CEO ROUNDTABLE.
62nd meeting of the Advisory Council of the Ministry of Commerce
The President ABC attended the meeting on behalf of the ABC in Islamabad.
| ABC FLASH --- July 2011
The ABC activities during July are given below for your information:
ExCom meeting with the US Ambassador Cameron Munter
The ABC ExCom met with Ambassador Munter on Thursday, 28th July. The President ABC welcomed the Ambassador and shared with him the ABC’s concern regarding the perceived breakdown of US/Pak relations and its effect on American companies operating in the country.Amongst the requests made of the Ambassador were that additional pressure should be put on the Pakistan Government to address the law and order situation in Karachi, the negative perception in the media should be actively dealt with, and long and short term investments in the power sector should be considered. The Ambassador assured the ABC that while the US/Pak relationship has been effected in terms of military and intelligence, the US government is committed to the economic sector in Pakistan and the Embassy will continue a dialogue with the business community.
ExCom meeting with Ambassador Robin Raphel
The ExCom met with Ambassador Robin Raphel as part of her farewell tour on Tuesday, 19th July in Karachi. Ambassador Raphel shared her views that the mood in the US is pro-private sector as the private sector is being recognized as the salvation of Pakistan and presented the idea of the revitalization of the Enterprise Fund as there has been renewed interest in pursuing it in Washington. The nature of the Enterprise Fund in Pakistan will be different as there is already a developed economy here unlike other countries where it has been implemented, therefore, it will be in the form of an investment fund – which will ideally go up to US$ 200/250 million over 5 years. Currently, they are trying to assess who exactly they are trying to reach and what value would be added through the Enterprise Fund and identify the sectors and businesses they wish to engage with. The Ambassador stated that the Fund is not just looking at companies with a high turnover, but those which will create employment opportunities and job growth. The ExCom suggested that the Fund also be directed towards SMEs as they are in trouble due to lack of funding, power/energy crisis and inconsistency in govt. policies. Additionally, the ABC would be happy to join the Board of Governors of the Enterprise Fund and provide support and Corporate Governance guidelines.
The 354th meeting of the ABC Executive Committee was held on Friday, 22nd July. Amongst the matters discussed were the issue of outstanding subscription payments which the President agreed to personally follow up on. The Vice President briefed the ExCom on the progress regarding the ABC Economic Summit and the ExCom agreed on the title ‘Boosting Pakistan’s private sector, Unlocking true potential’ and approaching 4 to 5 local speakers of high caliber and quality. Additionally, the Executive Director briefed the ExCom on the ABC’s status regarding its license renewal application submitted to the DGTO - on July 13th the DGTO’s office informed the ABC that its appeal has been accepted and the process of the license renewal has been initiated and a letter requesting certain exemptions had been sent to the DGTO. The meeting concluded with the ExCom agreeing to revise the salaries of the ABC staff, keeping in mind inflation, years worked at the ABC and job performance, with effect from July 2011.
Meeting with the Director General IPO at the Trade Marks Registry office, Karachi
On behalf of the ABC, the Executive Director met with the newly appointed Director General IPO, Mr. Sajjad Ahmed Bhutta, at a stakeholder meeting on Friday, 29th July. Amongst the points the DG raised were that he wants to utilize the strengths of both the ABC and OICCI to help the IPO and suggested the creation of an IPO Task Force consisting of staff from our member companies. He also reiterated that companies should play a more active role in ensuring IP standards are upheld. The IPO representatives also shared the vital news that the IPO is re-constituting it’s Board and have put forward the suggestion that it have 50% representation from the private sector.
Roundtable meeting with the SECP
The President ABC and CFO Gillette attended a roundtable meeting arranged by the SECP to review the revised Code of Corporate Governance on July 29th, 2011 in Karachi. The ABC expressed its appreciation towards the SECP for progress in the Corporate governance area in Pakistan and acknowledged that the revised Code of Corporate Governance caters to many of the areas which required attention. However, it was noted there are two areas that need further discussion and analysis before implementation – firstly, the issue of the ‘No. of Executives vs. Non Executive directors’ - the revised code requires no more than 1/3 of the elected directors including CEO, as executive directors. The ABC view was that share holders should be given the liberty to appoint directors (executive vs. non executive) and the law by force should not be doing this. The second issue noted was in terms of the ‘No. of Independent directors’ - the revised code suggests having ¼ of the total directors, or 2, whichever is higher, as independent directors. Further clarity would be required on the definition of ‘Independent Directors’ in order to enforce this.
| ABC FLASH --- September 2011
The ABC activities during September are given below for your information:
The American Business Council Economic Summit 2011
The ABC held the inaugural session of its annual signature event – “The American Business Council Economic Summit 2011”- at the Sheraton Hotel Karachi on Saturday, 17th Sept. 2011. The topic chosen for the event was “Unlocking true potential, boosting Pakistan’s private sector”, as the ABC strongly believes that the future of Pakistan lies in a vibrant private sector and that a thriving private sector, possible through good governance and conducive government policies, can influence economic development positively.
Prominent speakers of international repute participated in the Summit including Mr. Shaukat Aziz (Silk Bank), Mr. Nadeem Naqvi (Karachi Stock Exchange), Mr. Shabbar Zaidi (A.F. Ferguson), and Mr. Saleem H. Mandviwala (Board of Investment). They shared their insights answered queries or challenges via an interactive Q&A session. The attendance of ABC members and a number of varying stakeholders created a meaningful dialogue.
The Summit was driven by the key challenge facing Pakistan today - that its economy is not growing fast enough or in proportion to its population growth.
Economic growth is primarily driven by government polices and their ability to create a conducive business environment, where everyone is provided with robust infrastructure, transparent competition and protection of intellectual properties and personal assets. A key objective of economic growth in any country is to improve the standard of living of its citizens.
Where the economy grows in tandem with population growth, increases in GDP do not result in an improvement in the standard of living; it has to grow far beyond it. Pakistan’s GDP growth has been erratic over the last 5 decades and quite dismal over last 3 years (averaged 3.2% per annum). After reducing the poverty rate by nearly half during 2000 – 2007, it has started to climb up again. Unemployment, which had declined during that time period, has started to creep up since 2007 and inflation has been in double-digits for nearly 12 quarters. This has made life extremely difficult for the general public. There is no clear long-term vision and the government economic team has had 8 key changes in the last 2 years; not a good sign as consistency of policy and clarity in direction are two critical factors for existing and foreign investors.
The main conclusions reached in the Summit were:
• The urgent need to have a “Charter of Economy” document prepared with a clear and detailed economic development plan for Pakistan. This document must have the consensus of all political parties on the proposed economic policies and long term plan.
• The Government must immediately take full ownership and drive the 5 key aspects of economic development, namely Education, Health, Energy, Logistics and Security.
• Everyone must pay taxes. The Government must implement a fail-safe plan of getting the GDP ratio to 15% Tax by 2015 from the current poor status of less in 9%.
• There is a desperate need for a globally proven model to drive industrialization across sectors, with a clear blueprint for implementation, timing and investment estimates, owned by the government.
• Put a program in place to attract at least 5% of the $1.2 trillion of global FDI inflows.
• Take Public/Private partnerships to the next level and use this to address the projects suggested above.
The 356th ExCom meeting was held on Friday, Sept. 9th. The main points of discussion included the status of the ABC license from the DGTO. Members were briefed that on August 29th the ABC received its Ministry of Commerce license No. 18, renewed up to May 2014. It was also shared that the ABC’s lawyers, Orr. Dignam & Co., have suggested that the ABC continue to work towards complying with the requirements of the DGTO irrespective of our license renewal to prevent any future issues from arising. The other salient point of discussion at the meeting was the ABC Election Program and timeline which were reviewed and agreed upon. IBM, ACE Insurance and Colgate-Palmolive kindly agreed to provide names of their Senior Managers for the three-member Election Commission and it was suggested that the ABC office contact Citibank and Monsanto to seek their assistance again.