Thursday, December 23, 2010

Business & Finance Review

Business & Finance Review

Water Matters

According to the Water Security Risk Index, released by Maplecroft, Pakistan has the least secure supplies of water and is in the extreme risk category.

The world’s sixth most and second most populous Muslim country; Pakistan’s population is projected to swell up to over 330 million in year 2050, as indicated by the population Division of the Department of Economic and Social Affairs of the United Nations Secretariat.

Today, as the country faces unprecedented security threats, dwindling economy, natural hazards and political instability; many analysts still believe that the country has promising market opportunities in future. The availability of water will become a much higher priority in business decisions and investment endeavours.

One of the country’s most urgent challenges is how to manage the nation’s precious water resources to meet growing human, economic, and environmental needs. The availability of clean water has dropped from 1950s: 5,000 cubic meters to less than 1,500 cubic meters per person today, primarily due to the rapid growth in population. And yet we remain dependent on only three hydrological units, two of which are rapidly silting from the Himalayas.

As the population increases the pressure on the existing water resources will intensify. The shift will have an adverse impact on employment, economic development, healthcare systems, food security, urban management, chronic diseases, biodiversity, communal and social harmony etc.

Pakistan has already been through two of the gravest natural hazards this year so far: the Attabad crisis and the recent floods. Causes: glacial melt and for the latter the debate is still among the monsoon patterns, heavy rainfall, climate change, dams and deforestation. Whichever case it is, as of now 20 million people are homeless and lives have been lost, as desperation and hunger persists.

It has been estimated by resource experts that continued growth in population will reduce per-capita freshwater availability by 70 per cent by 2070 and Pakistan will be a water scarce society. The increase in demand for water will adversely affect the groundwater resources, as over 70 per cent of it is allocated already to Pakistan’s irrigation and other agricultural needs; one million tube wells across the country are satisfying short-term needs but leading to unsustainable use of groundwater and declining water levels. This cannot continue.

The Water and Power Development Authority (Wapda) has recently recommended to the government to create water regulatory authority, which will consist of representatives from the federal and provincial governments. The purpose of the authority is to regulate optimum water use and balance in different basins under enabling legislation.

According to studies conducted on water management, Pakistan also loses almost two-thirds of its supply to leaks and poor transmission in its canal system due to poor infrastructure and inefficient water management.

Inter-provincial conflicts over water also complicate water management: the construction of large dams or other infrastructure is slow and costly and can take up to 10 years; many fear that new needed dams will not be built quickly enough to reduce water problems anytime soon.

In an online interview, President, Pacific Institute and Member US Academy of Sciences, Dr. Peter H. Gleick said that there is a need for building appropriate water-infrastructure in Pakistan, while also protecting downstream usage and rights on sharing. He says the relevant political institutions have a crucial role to play in effectively managing the possible internal conflicts arising out of water-sharing; but most of all, to eradicate the imbalance from within the society authorities will need to focus on providing people access to clean drinking water and proper sanitation.

According to the United Nations Secretary-General, Ban Ki-Moon “As the global economy grows, so will its thirst. This is not an issue of rich or poor, north or south. All regions are experiencing the problem of water stress. There is still enough water for all of us – but only so long as we keep it clean, use it more wisely and share it fairly. Governments must engage and lead, and the private sector also has a role to play in this effort.”

In contrast to the technical approach, the government will need to bring a more focused media attention in addressing and covering matters related to attaining the required benchmark for water conservation and management. An effort that engages media, public-private sector, academia and the non-governmental organisations focused on raising awareness within Pakistani society of water’s value and the need to place a price on its usage. This platform along with a variety of interventions will build a national dialogue on water, enabling multiple stakeholders in effectively creating content, most relevant to the Pakistani society.

One of the country’s targets in achieving Millennium Development Goals (MDGs) is to halve the proportion of people without sustainable access to safe drinking water by 2015. However, it is believed that Pakistan is far from achieving this target. The members of the United Nations are meeting this month in New York to discuss the progress on MDGs at the 65th UN Summit

Pakistan leads in Entrepreneurship indicators |

Pakistan leads in Entrepreneurship indicators |

Wednesday, December 22, 2010

Pakistan leads in Entrepreneurship indicators

The Pakistan Fast Growth 25 companies have grown an average of 81% a year for the past three years and created 12,000 jobs since inception. They represent Leading Indicators of Pakistans economic potential.

AllWorld Network and JS Bank created “The Pakistan Fast Growth 25” offering the first snapshot of how Pakistan's rising non-listed companies are generating growth. JS Bank is the host organization and sponsor for the Pakistan 25, partnering with AllWorld Network of the United States. 

Mr. Malik Ahmad Jalal, Director Pakistan Fast Growth 25 shared the Data on Pakistan 25, which was also represented by Sarmad Awan and Nabeela Darugar from JS Bank. Amir Jahangir, CEO Mishal Pakistan and Alberto Rodriguez the Press Attaché to the U.S. Embassy in Islamabad also attended the media event. 

Notwithstanding the challenging political and economic context, Pakistan is home to growing private companies creating a significant number of competitive jobs.   Leading the Pakistan 25 growth rankings are companies in High-Tech and Telecommunications, and Agriculture and Mining. Many of these rising Pakistan 25 companies are not just serving local markets, but are competing globally.

As a group, the Pakistan 25 broke AllWorld records for entrepreneurial intensity.  From the August announcement of the application process by JS Bank for the Pakistan 25, AllWorld received the most number of qualified applications in the shortest amount of time.  The top performers who made the Pakistan 25 posted a blistering 81% annual growth rate between 2007 and 2009 with an average size of 350 employees per company, and since inception they created 12,000 jobs. The Pakistan Fast Growth Companies have been successful in local markets but also globally competitive, as average 35% of their revenues are derived from international markets.

Contrary to what many might assume, the Pakistan 25 have grown by investing in their employees providing a significant amount of on-the-job training, giving financial bonuses for performance to incentivize employees, and offering other benefits such as flexible work schedules.  The combination of application numbers, growth rates and job generated exceed those of the eight AllWorld country rankings in the Middle East, Asia and Africa.   These results demonstrate that Pakistan has many of the conditions of a leading entrepreneurial economy.

The Pakistan 25 report their major constraint to growth is finding qualified manager and employees.  This is the number one growth constraint experienced universally by growth companies, and there is an opportunity for job training programs and HR recruiting firms to serve the specific needs of these companies.  Perhaps reflecting the unique context of Pakistan, the second major constraint to growth is Government Red Tape, which is not a top constraint reported by the entrepreneurs from other AllWorld programs.      

Companies competed for a spot on the Pakistan 25 based on strenuous international standards including completing a detailed survey of business strategy and operations and providing audited statements or an audit letter to verify revenues. The Pakistan 25 is divided into 24 Ranked Companies and 6 Companies to Watch. The 24 Ranked Companies are at least three years old and meet AllWorld’s international criteria of size, age and performance, and are ranked based on their sales growth between 2007 and 2009. There are 6 Companies-to-Watch – companies that show all the characteristics of a fast growth company but are too small or too young. These are companies we believe will become future contenders. 

The winner of the Pakistan 25 will be revealed in early 2011.  The winners have been notified of their status, but do not know their place on the ranking.  The Pakistan 25 will be expanded in 2011 into an annual Pakistan 100.

-        The AW Approach: Our approach for creating jobs is to identify and vet growth entrepreneurs in developing countries and put them on the global radar screen. This way capital, talent and business opportunities come to them and they can grow to large scale.

-           Why SMEs? Our experience and research has shown that governments of developing countries could not create additional jobs and large corporate sector is shrinking too and cannot offer the growth potential. Therefore, any employment creation will have to come from small and growing enterprises in the developing countries.

-         One Global Standard: Since the companies are selected by the same criteria used for ranking the Inc. 500, the world knows that a Pakistan Fast Growth 25 winner is a global standard entrepreneur who would qualify for Inc. 500, if the company was based in the United States. This results in attracting investors and customer interest. 

-        “The Pakistan Fast Growth 25 companies, led by dynamic men and women, represent a new future of the country”, Anne Habiby and Deirdre Coyle, Founder of AllWorld Network

-       “Beyond growth percentages and rankings, Pakistan Fast Growth 25 will showcase country’s top entrepreneurs and provide an alternate narrative of the country as talented and entrepreneurially infused nation. The evidence of budding entrepreneurship will send out the message that in spite of all the challenges, Pakistan is open for business.” Malik Ahmad Jalal, Director of Pakistan Fast Growth 25

-       “These numbers despite all odds project the force and sheer passion of vibrant business leaders by which their companies have grown under a short-span of three years. AllWorld Network has done a commendable job in recognizing their efforts. At JS Bank, we have always supported entrepreneurs and have taken initiatives that create an environment friendlier for within the entrepreneurship space. We are pleased to see our partnership with Allworld bring to frontline such amazing success stories of these compelling entrepreneurs.” Kalim ur Rehman, President JS Bank

-       “The solution to Pakistan’s economic challenges lies not in foreign lands, but in the entrepreneurial talent of its own citizens. Pakistani entrepreneurs have flourished in spite of some of the most restricting economic and security environments in the world. The Pakistan Fast Growth 25 is recognition of the spirit of these dynamic men and women who are a great resource and the best bet for Pakistan’s future.” Malik Ahmad Jalal, Director of Pakistan Fast Growth 25