Communication technology: Digital media still unexplored in Pakistan

The increase of over 80% in digital ad spend is quite remarkable given the fact that the total ad spends of the industry increased about 18% over the same period.

KARACHI: 

Entrepreneurs should start treating the digital arena as a strategic component of their businesses rather than an extension thereof, said Fazal Ashfaq, CEO of B Solutions, a Lahore-based digital advertising agency, while speaking to The Express Tribune on Wednesday.

Despite rapid rate of growth in digital ad spends, its share in Pakistan’s total ad spend remains tiny. Digital ad spends increased from Rs560 million in 2011 to Rs1 billion in 2012 – a year-on-year rise of more than 80%. But the fact remains that its share in the total ad spend of the industry – estimated to be $386 million − is still less than 3%.

“If digital is not a key component of your business strategy, you risk playing catch-up to your competitors,” said a recent research report that B Solutions prepared and shared with The Express Tribune. The company conducts social media research and has been providing clients with advertising services since 2010.

The increase of over 80% in digital ad spend is quite remarkable given the fact that the total ad spends of the industry increased about 18% over the same period. The lack of interest in digital advertising on the part of Pakistani businesses is inexplicable given the fact that a typical enterprise can now reach more Pakistanis by mobile (voice) than it can through TV and print media combined.

According to the report, about 70 million people, or 36% of the total population, have access to TV. Similarly, only eight million people, or 4% of the total population, enjoy access to newspapers. In contrast, as many as 100 million people, or 52% of the population, have access to mobile (voice). The number of people with access to mobile (SMS) is 36 million, or 18% of the population.

In spite of the overwhelming statistical evidence in favour of digital advertising, it is astonishing that TV and print currently enjoy 56% and 30% shares, respectively, in the country’s total ad spend as opposed to digital segment’s 3% share.

“Mobile has changed the landscape and it’s just getting warmed up. In a commonly misunderstood country like Pakistan, there is a need to rely on facts as opposed to hearsay,” the report said.

Ashfaq says an affluent minority exists in Pakistan which − along with a ‘massive middle class’ − is driving growth in the country’s overall ad spend. He backs his statement with statistics obtained from the Pakistan Institute of Development Economics and Asian Development Bank.

According to the data, as many as 80 million Pakistanis, or 42% of the total population, earn between $60 and $300 per month. On the contrary, 56% of the population earns less than $60 per month while another 2% earn more than $300 every month.

“Understanding the landscape and where your audience resides therein is the first and foremost step any stakeholder should take,” it said

OBR overestimated business investment in UK recovery forecasts

Robert Chote, the OBR's director, suggested weaker than expected private investment growth may be down to sub-par profits and uncertainty about government policy. Photograph: Lewis Whyld/PA

Flatlining investment by Britain's battered businesses was the main reason the independent Office for Budget Responsibility drastically overestimated the likely strength of the economic recovery, it conceded in its latest forecast review.

The OBR, set up by George Osborne to provide a check on Treasury number-crunching, said in its annual forecasting evaluation report that when it set out the expected path for the recovery in June 2010, shortly after the coalition came to power, it was projecting that business investment would bounce back strongly, as in previous recoveries.

Instead of the 8.9% rise in real GDP since mid-2010 the OBR had forecast, growth had been just 3.2% by the second quarter of this year; and instead of expanding by 4.2% in real terms, private investment has declined by 0.4%. What recovery there has been since 2010 has been dominated by a jump in private consumption.

The OBR's director, Robert Chote, suggested several reasons for weaker-than-expected private investment growth, including sub-par profits, and uncertainty about government policy.

Lack of a recovery in business investment, which fell by 8.5% over the past year according to the latest official figures, has not just stymied forecasters, but alarmed analysts hoping for a rebalancing of the economy away from consumption, towards a Britain that can "pay its way in the world," as George Osborne has put it.

However, the unfavourable balance of the recovery has been better news for the Treasury's coffers, since consumer spending is likely to be taxed more heavily – through VAT, for example – than business investment, which can be offset against tax.

Chote said that helped to explain why despite the OBR's 2010 forecasts being over-optimistic on the likely pace of the recovery, the deficit had come in almost as expected.

The OBR director also repeated his assessment from last year, that its forecasts had not been blown off course by a larger-than-expected hit to growth from the government's deficit-cutting strategy.

A Treasury spokesman welcomed the report, saying, "when it comes to the reasons for slower-than-forecast growth in the UK over the last three years, [the OBR's] conclusion remains the same as last year: there is no convincing evidence that the impact of the government's deficit reduction plan has been larger than the OBR originally expected in 2010."

However, the OBR also sought to explain why the 2012-13 budget deficithad come in lower than expected in the forecasts published alongside the March budget, at £115.7bn, against £119.9bn. It found one key factor was that the Treasury had deliberately intervened, "bearing down on" Whitehall departments to encourage them to spend less than they had been allocated.

"Borrowing would have been on course to rise over the year. But the government chose to offset most of the impact on the deficit by bearing down on spending by central government departments," the OBR said.

Underspending had traditionally been a result of unexpected changes in departments' plans; but Chote said that like any forecaster, the OBR's job had been complicated by recent large-scale revisions of GDP data by the Office for National Statistics, which saw the early-1990s recession become shallower, and the 2008-09 downturn even deeper, than previously thought.

"History is being rewritten year by year, even two decades later," he said, "for many years to come, these are early drafts of economic history.

World Bank report: Economy resilient, growth to remain steady at 3.5%

The bank’s estimate is one percentage point higher than the projection made by the International Monetary Fund (IMF). CREATIVE COMMONS

ISLAMABAD: 

The World Bank sounded optimistic on Thursday as it projected that Pakistan’s economic growth would remain steady at 3.5% in the current financial year, underestimating adverse impact of tight monetary and fiscal policies on growth and job creation.

According to the bank’s South Asia Economic Focus report, there will be a marginal decrease of 0.1 percentage point in real gross domestic product (GDP) growth compared with 3.6% the country achieved in the last fiscal year.

The bank’s estimate is one percentage point higher than the projection made by the International Monetary Fund (IMF). The IMF has pressed Pakistan to reverse its easy fiscal and monetary policies and economists believe this change will shave one to two percentage points off growth this year.

However, the World Bank does not agree, arguing that fiscal consolidation may enhance general investor perception of the economy and improve governance performance.

In contrast, the Asian Development Bank (ADB) has forecast that the pace of growth in Pakistan will slow down to 3%. The Asian lender cut its forecast following agreement over an IMF loan programme which requires Pakistan to reduce its budget deficit by 2.2 percentage points this year and tighten monetary policy.

The World Bank noted that fiscal adjustment might lead to contraction of economy as fiscal consolidation might fall disproportionately on public investment. “However, all economic sectors have shown significant resilience in the past year, agriculture and large-scale manufacturing growth remains positive,” it added.

According to a bank spokesperson, Pakistan’s economy has shown resilience and its main sectors contributed positively last year, creating hopes of higher growth.

The spokesperson said constraints like energy shortages have had an impact on Pakistan’s exports, but exporters have found creative ways to overcome them.

Initial steps taken by the new government to reduce load-shedding, keep interest rates low and attract investment have improved expectations of businessmen, particularly exporters, he added. “Expected recovery in Europe and the US should also help to improve prospects for Pakistan’s main exports.”

Despite painting a relatively rosy picture, the World Bank said tepid economic performance has slowed down progress towards poverty reduction and undermined efforts in service delivery.

In its book “Pakistan: The Transformative Path”, the bank has argued that sharp reduction in poverty in the last decade suggests that poverty in Pakistan is highly elastic to growth. Pakistan is good in reducing poverty when the GDP grows but cannot sustain the growth, it said.

The World Bank report noted that Pakistan was facing many crises at the same time. Terrorism, economic problems and energy shortages still remain the main concerns. The country’s weak external position remains the most pressing short-term challenge.

The bank observed that substantial debt repayments have resulted in a marked drawdown on foreign reserves. In terms of import cover, the reserves dropped from about 2.7 months of imports in June 2012 to just 1.2 months of imports in September 2013.

According to the data released by the State Bank of Pakistan (SBP) on Thursday, until October 4 gross reserves held by the central bank slipped below $4 billion. The reserves stood at $3.953 billion, underlining the need to build the coffers.

The reserves held by commercial banks stood at $5.174 billion, according to the SBP.

Commenting on South Asia growth prospects, the World Bank said global capital rebalancing has highlighted structural weakness and vulnerability in South Asia, acting as a wake-up call for policymakers.

It said portfolio capital outflows, triggered by the prospect of tapering quantitative easing in the US, have made current account deficits more difficult to finance across emerging economies.

Punjab to convert 0.1m tube wells from diesel to biogas

According to agriculture census, farmers operate 1.1 million tube wells across the province for watering their crops. PHOTO: FILE

LAHORE: The Punjab government has designed a plan to convert about 100,000 agriculture tube wells from diesel to biogas in the next five years in a bid to save energy resources and promote biogas technology in the province, The Express Tribune has learnt.

To encourage farmers to opt for cheap alternative energy, the government will bear 50% of the conversion cost which will be in the range of Rs200,000 to Rs400,000 for a tube well based on technology and capacity.

A successful end of the drive would help save Rs30 billion on diesel consumption annually and help farmers irrigate their land at a low cost, a government official said. This would be the first project of its kind in the agriculture sector and would have a salutary effect on the environment in rural areas, he said.

Punjab Agriculture Secretary Dr Ijaz Munir, while confirming the plan, said his department would give a presentation to the chief minister soon for his approval. Work on the project would start next year, he added.

Munir said the project was being undertaken after a comprehensive study to save energy and utilise animal waste for productive purposes. The government would ensure transparency in the process and facilitate farmers in adopting biogas technology, he said.

Two types of technology including Frothy Drum and Fixed Dome can be used to switch over from diesel-powered tube wells to biogas. The provincial government will invite expressions of interest from interested companies, leave it to the farmers to select the company and pay directly to the technology provider.

According to documents, there are 32 million cows and buffaloes owned by small and big farmers in the province. These animals are producing 117 million tons of dung annually. If half of the total is used to produce gas, then the waste will produce 2.93 billion cubic metres of gas annually.

According to estimates, 25 to 40 cubic metres of gas is required to run a tube well. In both the technologies, 80% of energy will come from biogas and 20% from diesel.

A tube well eats up 2.25 litres of diesel per hour, but after reliance on biogas, diesel consumption will come down to 0.45 litre per hour. “This way, 288 million litres of diesel is expected to be saved every year,” the official said.

In monetary terms, savings are estimated at Rs30 billion per annum if 100,000 tube wells are switched over to biogas in the next five years.

According to agriculture census, farmers operate 1.1 million tube wells across the province for watering their crops. Of these, 110,000 are powered by electricity and 900,000 are run on diesel.

The Punjab government has earmarked Rs7 billion in the annual budget for doling out subsidy in several areas including tube wells, an official of the Finance Department said.

The Agriculture Department hopes that biogas plants installed with tube wells will help produce organic manure rich in nutrients, which will save the money spent on fertilisers.

Tendulkar to draw curtains on Test career

Known as the ‘Little Master’ Tendulkar has been widely hailed by his contemporaries as second only to Australia legend Donald Bradman in the pantheon of batting greats.

NEW DEHLI: 

India’s record-breaking batsman Sachin Tendulkar announced that he would retire after playing his 200th Test match next month, calling time on a career stretching nearly a quarter of a century.

Tendulkar, the highest run-scorer in Test cricket history and the only player to make 100 centuries in international cricket, said he had been ‘living a dream’ since making his debut in 1989 but recognised it was now time to hang his gloves.

“It’s been a huge honour to have represented my country and played all over the world,” said the batsman in a statement. “I look forward to playing my 200th Test Match on home soil, as I call it a day.”

India is to play a two-Test series against the West Indies – the series was reportedly shoed in to ensure Tendulkar plays his 200th Test on home soil. The Mumbai-born star has already made 198 appearances and is set to become the first player to reach the 200 landmark.

Tendulkar, 40, said he found it hard to imagine life without cricket “because it’s all I have ever done since I was 11 years old. All my life, I have had a dream of playing cricket for India. I have been living this dream every day for the last 24 years,” he said.

The right-handed batsman has scored 15,837 runs since his debut against Pakistan in Karachi in November 1989, although he has struggled for form in recent times. His 100 centuries in international cricket includes 51 Test tons.

His last Test match century came in January 2011 when India played South Africa and he retired from One-Day Internationals late last year. He also played his last Twenty20 match earlier this month in an appearance for the Mumbai Indians.

Tendulkar captained India for several years but the high point of his career came in 2011 when he was part of the Indian team to win the World Cup.

Known as the ‘Little Master’ – a title originally given to Hanif Mohammad of Pakistan – Tendulkar has been widely hailed by his contemporaries as second only to Australia legend Donald Bradman in the pantheon of batting greats.

Australia’s Shane Warne said that no one else came close to Tendulkar in his prime. “Sachin Tendulkar is, in my time, the best player without a doubt — daylight second, Brian Lara third,” he said.

Tendulkar, who is an honorary member of parliament, has at times struggled to cope with his iconic status, but he made a point of praising his fans in his retirement statement.

“Most of all, I thank my fans and well-wishers who through their prayers and wishes have given me the strength to go out and perform at my best,” he said.

Tendulkar first hit the headlines as a 14-year-old when he shared a then world record partnership of 664 runs in a school match with Vinod Kambli.Legendary Indian opener Sunil Gavaskar once said he was convinced Tendulkar would achieve greatness when he first saw him bat in the nets more than two decades ago.

“It is hard to imagine any player in the history of the game who combines classical technique with raw aggression like the little champion does,” said Gavaskar. “There is not a single shot he cannot play.”

Afridi lauds ‘favourite player’ Tendulkar

Pakistan all-rounder Shahid Afridi heaped praise on Tendulkar.

“He is the biggest name in world cricket,” Afridi told The Express Tribune. “He is my favourite player and I always enjoyed watching him bat. Whenever he took to the field, I used to be glued to the TV.”

Despite his unparalleled achievements, Afridi said that the batting maestro always remained humble.

“Sachin is in a league of his own but despite his big stature, he is very down to earth and that is the reason why he is loved by all,” he added.

Afridi also had words of advice for Tendulkar, asking him to remain a family man after retirement.

“I wish him all the best. I hope he enjoys his life after retirement and most importantly, I hope he continues contributing to the game

Foreign investment: Turkey to work for Pak infrastructure development

Prime Minister Nawaz Sharif in a meeting with Turkish delegation led by Orguz Carmikli, Vice Chairman NUROL group at PM house on October 09, 2013. PHOTO: PID

ISLAMABAD: 

Prime Minister Nawaz Sharif on Wednesday said that Pakistan offers various investment opportunities with ideal economic returns for foreign investors.

Nawaz while talking to the Turkish delegation, led by Vice Chairman NUROL Group, Orguz Carmikli which called on him today, said that Pakistan’s priority sectors for investment include hydel and coal power projects, Karachi-Lahore Motorway and infrastructure development.

The prime minister said Pakistan faces power shortages and the government was committed to mitigate the same by exploiting innovative and cheap energy resources. Carmikli expressed his company’s readiness to invest in Gaddani power park, Diamer Bhasha Dam and Karachi-Lahore motorway.

He also expressed satisfaction over Pakistan’s legal framework for foreign investment and said that NUROL may use its expertise in infrastructure development to construct motorways on Build-Operate-Transfer basis.

Public to private: Senior minister Sirajul Haq flays government over privatisation

The government is taking such decisions only to follow the dictates of the IMF and World Bank, says Haq. PHOTO: INP

PESHAWAR: 

The federal government has taken 110 wrong decisions in the past 110 days – decisions crucial in increasing inflation and unemployment across the country, claimed Finance Minister Sirajul Haq.

At a news conference at the JI Markaz Peshawar, the senior Jamaat-e-Islami (JI) leader maintained the government’s decision to privatise profitable state holdings is “continuing with the legacy of imperialism”.

The JI would protest the privatisation of certain government departments, he added.

In order to stop the government, the party has asked labour unions to meet on October 28 in Lahore to discuss the potential unemployment of roughly 0.9million people after the privatisation of 31 departments. “The sale of organisations and departments to the private sector has proven to be a wrong decision so far,” said Haq. None of those companies are profitable, he added.

The government should focus on eliminating corruption instead of moving assets from the public to the private sector, argued the senior minister.

“The government is taking such decisions only to follow the dictates of the IMF and World Bank.”

The privatisation of Pakistan Steel Mills was investigated and it was revealed India was involved in its privatisation, alleged Haq. “In 2005 the Karachi Electric Supply Corporation needed a Rs5 billion subsidy which the government did not provide but after its privatisation the subsidy reached Rs72 billion.”

Discussing the dilapidated condition of the country’s railways, the finance minister said the department can be improved by managing manpower. He claimed roughly 80 million people are associated with the railway department, directly and indirectly