Bilateral ties: Britain pledges support in fight against militancy

British High Commissioner to Pakistan Philip Barton. PHOTO: GOV.UK

ISLAMABAD: 

Britain is standing ‘shoulder-to-shoulder’ with Pakistan in the fight against terrorism and discussions are already under way on how London can help Islamabad enforce the recently announced internal security policy, the country’s high commissioner Philip Barton said on Friday.

Barton was speaking to the media men a day after he officially presented his letter of credentials to President Mamnoon Hussain as Britain’s top envoy to Pakistan.

The envoy said it was not for him to comment on policies devised by the government of Pakistan to tackle militancy. “[But] we stand shoulder-to-shoulder with the Pakistan government as they tackle terrorism in the country and we will support the government as it takes forward its efforts in this area,” he said.

Barton termed the internal security policy, unveiled by Chaudhry Nisar in parliament as part of Pakistan’s first-ever National Security Policy, a ‘very important’ strategy against terrorism. “We are already in discussions with the government on how we can support it in the implementation and delivery of that strategy.”

He said Britain has already been collaborating with Pakistan on security issues in the past. “[The collaboration is] in terms of discussing strategy on how to best tackle the problem and deriving practical ways such as providing assistance on how you can bring criminals to justice,” Barton said.

Barton reiterated his commitment of focusing on three areas: trade, education and security. He said the two countries are aiming to raise bilateral trade and investment to £3 billion per year by 2015. In order to achieve this target, he said, he will focus on making British businesses aware about good business opportunities in Pakistan.

Turkish parliament delivers blow to schools run by Erdogan rival

Students walk past photographs of modern Turkey's secular founder Mustafa Kemal Ataturk hanging on a wall at a university in Turkey. PHOTO: REUTERS

ISTANBUL: Turkey’s parliament passed legislation to shut down private preparatory schools, many of which are an important source of income and influence for an Islamic cleric that prime minister Tayyip Erdogan accuses of running a covert campaign to topple him.

Lawmakers late on Friday set a deadline of September 1 2015 to close the schools, news channels reported, which millions of students attend to prepare for entrance examinations to win limited spots at state high schools and universities.

The government has accused cleric Fethullah Gulen, whose followers wield influence in the police and judiciary, of concocting a graft scandal to compromise Erdogan and his government. The scandal broke with police raids on December 17 but ties between the ex-allies have been tense for several years.

The government’s initial moves to shut down cram centers late last year escalated those tensions ahead of the March 30 municipal election, seen as a critical test of support for Erdogan after 11 years in power.

Education is central to US-based Gulen’s Hizmet, or service, movement’s mission. Their respected prep schools help spread influence across a nationwide network, and shutting them will deprive Hizmet of a chief source of financing.

Followers of Gulen, who preach respect for science, democracy and dialogue with other faiths, have forged a powerful socio-religious community network active. Gulen, who says he has no plans to form a political party, denies any involvement in the graft investigation.

Erdogan remains by far Turkey’s most popular politician. In parliament he faces a weak opposition and, supporters argue, at the polling stations his success in driving Turkey’s economy could eclipse any damage from corruption accusations.

Erdogan has said that abolishing the cram schools is part of a larger reform of an “unhealthy” educational system that ranks Turkey below the Organisation for Economic Cooperation and Development average in literacy, math and science.

The law allows some of the cram schools to become private schools, giving them free access to properties that belong to the Treasury, and for the Education Ministry to recruit some of the teachers to work in public schools.

Pakistan among top three contributors in NEPA, Microsoft

“Pakistan is one of the top three countries [in NEPA] for Microsoft in terms of contribution to the business,” said Aamer Kaleem. PHOTO: AFP

KARACHI: 

Pakistan is among the top three contributors to Microsoft’s business in North Africa Eastern Mediterranean and Pakistan (NEPA) – one of 13 business regions for the company worldwide – according to a top official of the Washington-based technology giant.

“Pakistan is one of the top three countries [in NEPA] for Microsoft in terms of contribution to the business,” said Aamer Kaleem who is Chief Technology Officer (CTO) for Worldwide Communications Sales Team at Microsoft Corp and based in Chicago.

The CTO stated this during an interview with The Express Tribune earlier this month. He was in Karachi to address Pakistan’s corporate customers in an event about unified communications, which also featured their flagship enterprise solution ‘Lync’.

Kaleem’s visit endorses the company’s official stance that Pakistan is a growing market for the tech giant with a lot of business opportunities.

It is perhaps for the same reason that MS sent to the country the man who has global responsibilities to drive revenue and deployments for Lync business – the CTO along with his local team briefed corporate customers about worldwide enterprise communication trends and discussed how customers in Pakistan could benefit from Microsoft Lync.

Besides contribution to the business, there are several other trends that are driving the company’s interest in the market.

In the NEPA region, a cluster of up to 10 countries, Pakistan ranks very high in technology adoption and in solutions applied by the customers, Kaleem said.

“Pakistan is a new emerging market with a huge potential,” Kaleem said. Though it may sound strange but sometimes people here get the latest products first than the mature market, he added. “Pakistani customers are more nimble; they are more adaptive to technology [compared to the regional markets].”

Talking about market potential for Lync, Kaleem said Pakistanis are very hungry to consume more in communications “just like they have used WhatsApp and Viber”. In terms of enterprise, Lync is no different, he said drawing a contrast with such social media apps.

The CTO’s optimism about the Pakistani market is understandable as their enterprise solution is already getting some attention.

“In Pakistan, a majority of the top tier banks are using Lync,” Kaleem said. The customers who have adopted Lync as a collaboration platform include banks, telecommunication companies and educational institutes, he said – the customers are ready to take communication to the next level now, he said. For example, he said a provincial government in Pakistan was going for citizen connection and is using these communication platforms from Microsoft. “I have seen this happen in a developed country like Canada and USA,” Kaleem said.

Explaining the technology, Kaleem said Lync has multiple elements. “It has software element offering software to software or PC to PC collaboration and then there is telephony system, which is new to market,” he said. The purpose of this event was to introduce the telephony part to the customers, he said.

The software giant launched Lync in 2007 and rebranded it three years ago. With the acquisition of Skype, Microsoft now has 350 million active users. While Skype is a consumer product, the company is branding Lync as its enterprise product.

Lync can be used for the emergency services management, Kaleem said responding to the question how the country can benefit from the product. Secondly, he said, it can be used for good governance. Lync offers consumer solutions, which can benefit politicians, social institutions, healthcare institutions, education sector and law enforcement agencies, he said – these institutions can provide useful information to the public using this platform.

While the country remains on the radar of tech giants like MS for it forms a large customer base for technology products, its talented workforce also serves as a base to export bright minds these organizations.

“In Microsoft, there are a lot of Pakistanis on senior positions,” Kaleem said. “That’s mainly because they have proven their worth, and not because they are Pakistanis.”

Corporate results: PSO’s after-tax profit grows 150% in six months

Net sales rose 14% to Rs612 billion in July-December 2013-14 against Rs535 billion in the same period last year. CREATIVE COMMONS

KARACHI: 

After-tax earnings of Pakistan State Oil (PSO) rose 150% to Rs15.8 billion in the first half of current financial year compared to Rs6.31 billion in the corresponding period of previous year.

This record six-month profit eclipsed earnings of Rs12.6 billion in the entire financial year 2012-13, said PSO in a statement on Friday.

PSO’s board of management, which met at the company’s headquarters to review its performance, declared a dividend of Rs4 per share and 10% bonus shares.

Net sales rose 14% to Rs612 billion in July-December 2013-14 against Rs535 billion in the same period last year. “We believe higher sales of furnace oil and motor spirit are the key drivers of topline growth,” said Topline Securities in a report.

The main factor behind the earnings was huge other income, which grew to Rs14.7 billion compared to Rs3.3 billion in the first half of 2012-13.

According to the statement, PSO led the market with a share of 63% while its share in black oil and white oil stood at 75% and 53% respectively during the six-month period.

Sales of furnace oil and motor gasoline grew 13% and 15% respectively. A decline of 6.4% in sales of high-speed diesel in the first quarter was followed by a growth of 3.5% in the second quarter, resulting in 1% decline over the six-month period.

PSO said it achieved substantial cost efficiencies as distribution and marketing expenses rose only 4%.

The positive impact of sales and cost efficiency was partially offset by depreciation of the rupee against the dollar by about 6.5%. This resulted in an exchange loss of Rs2.2 billion compared to Rs0.96 billion in the same period last year.

Huawei anticipates arrival of 3G to unlock further growth

45,000 is the number of cellphones per month currently imported by Huawei. PHOTO: consumer.huawei.com/en/

LAHORE: 

Recent developments in the spectrum auction process have charged up smartphone producers.

One such producer, Huawei Technologies Pakistan (HTP), is looking to increase its footprint in the market, which it believes will start maturing only after it incorporates third generation (3G) technology.

“People believe the smartphone market in Pakistan has already matured,” said Fraz Malik Khan, head of marketing at HTP, in an interview with The Express Tribune. “I believe this is not the scenario as 3G is yet to come, which, if incorporated as scheduled, would approximately double the number of smartphone users in Pakistan.”

The claim regarding smartphone penetration in Pakistan is a healthy sign for the overall market. Pakistan currently has 15 million smartphone users and Khan intends to make HTP the market leader.

HTP started its operations in Pakistan back in June 2012 by launching its first smartphone P-1. After a lack of initial success, the company revamped its strategy a year later to align with the marketing strategy. This was the time when the company’s flagship product, the P-6, was launched globally. The product helped the company grab a foothold in the market against competitors like QMobile and Samsung.

The company claims that before the re-launch, its sales graph was hovering around 4,000 units per month, which then peaked to around 40,000 as of January. “Our flagship product is extremely popular and as of today we are unable to meet the demand for this product,” Khan said. “With the arrival of 3G services, we will be in a position to be number one selling brand in Pakistan as our research and development infrastructure supports this technology, and this will eventually boost our sales graph,” he added.

Huawei is currently importing around 45,000 units per month, while Samsung imports between 50,000 to 60,000. According to Khan, sales of their high-end products are higher than their low-end products. The price factor of their flagship product allows the company to be more competitive compared to Samsung.

Commenting on the company’s future plans, Khan said that they cannot rule out infrastructural investments by Huawei in Pakistan. “Though I cannot confirm anything at this point, I believe that the country’s premier has already communicated to Huawei to make a resource centre in Pakistan.

Oil, gas firms win eight more exploration licences

Of the total, 21 blocks are in Balochistan, 15 in Punjab, six in Sindh and eight in Khyber-Pakhtunkhwa. PHOTO: FILE

ISLAMABAD / KARACHI: 

The government on Friday signed eight petroleum concession agreements and granted exploration licences to oil and gas companies, which will attract a minimum investment commitment of $60.73 million.

Apart from the work commitment, the companies will spend a minimum of $30,000 a year on social welfare schemes in each of the awarded blocks. The blocks are located in all four provinces of the country.

According to a statement issued by the Ministry of Petroleum and Natural Resources, before signing the fresh deals the government had inked 20 petroleum concession agreements and awarded exploration licences earlier in February.

The ministry said after taking all provinces on board for finalising model petroleum concession agreements and model exploration licences, it had provisionally awarded 50 blocks to nine exploration and production companies on January 21.

Of these, 21 blocks are in Balochistan, 15 in Punjab, six in Sindh and eight in Khyber-Pakhtunkhwa.

Petroleum and Natural Resources Secretary Abid Saeed, Director General Petroleum Concession Saeedullah Shah, OMV Senior Vice President Middle East and Caspian Region Erwin Kroll, Oil and Gas Development Company (OGDC) Managing Director Riaz Khan and Pakistan Petroleum Limited (PPL) MD Asim Murtaza signed the agreements. Petroleum Minister Shahid Khaqan Abbasi was also present.

PPL inks three accords

PPL signed three petroleum concession agreements with the government for blocks 2569-5 (Khipro East), 2866-4 (Margand) and 2867-5 (Kuhan).

Margand and Kuhan blocks would be explored in a joint venture with OMV (Pakistan), the Austrian petroleum exploration company, PPL said in a statement.

PPL will be the operator in Khipro East and Margand, located in Sindh and Balochistan, respectively. The two blocks together cover an area of approximately 4,900 square kilometres.

OMV would be the operator in Kuhan, also located in Balochistan, marking the first time in recent years that a multinational firm ventured as an operator, it said.

“The signing allays general apprehension regarding Balochistan’s security situation forestalling exploration activities in the province on the one hand and lack of interest by multinational companies to invest in Pakistan’s oil and gas sector on the other.”

Having played a key role in bringing the Austrian firm to Pakistan in 1990, PPL and OMV have since partnered in successful ventures, including Sawan, Miano, Latif and Tajjal fields.

PPL intends to make an estimated total investment of $50 million in Khipro East and Margand to discharge minimum work commitment, in processing and interpretation of 2D/3D seismic data and exploratory drilling during the first three years.

The signing of new agreements and licences, which is the third round held by the current government, concludes the grant of all the blocks won by PPL in the last bidding round in March 2013.

GDP increases 5%, shows SBP’s first quarterly report

The target set by the government in its Annual Plan for 2013-14 is 4.4% for the full fiscal year. DESIGN: CREATIVE COMMON

KARACHI: 

Pakistan’s gross domestic product (GDP) increased 5% in the first quarter of 2013-14 as opposed to 2.9% in the corresponding period of the preceding fiscal year, according to the State Bank of Pakistan’s (SBP) first quarterly report on the state of the economy released on Friday.

The target set by the government in its Annual Plan for 2013-14 is 4.4% for the full fiscal year.

The report stated that the industry and services sectors led growth while agriculture performed below target, mainly because of water shortages at sowing time, low agricultural prices globally that reduced the area under cultivation, pest attacks and heavy rains before the harvest season.

As for the improvement in the industrial sector, the SBP said better energy supplies and higher capacity utilisation played a key role in generating growth during the first quarter.

With the revival of the industrial sector, import pressures reappeared, especially for capital goods and raw materials. The import of petroleum, machinery and metal was particularly strong, which increased the trade deficit by $0.6 billion during the quarter.

Additional stress on the current account came from delayed inflows of coalition support fund (CSF). As a result, the current account posted a deficit of $1.2 billion in the first quarter against a surplus of $0.4 billion in the corresponding three-month period last year.

Forex fiasco

With regard to the country’s foreign exchange reserves, which dropped $1.2 billion during the quarter, the SBP said repayments on external debt exceeded fresh disbursements while foreign investments remained shy. Resultantly, the rupee lost 6% value against the dollar during the quarter as opposed to 0.3% in the first quarter of the preceding year.

The SBP claimed that the rupee came under pressure due to adverse market sentiments, particularly when the IMF released the detailed letter of intent in September. The market focused on future foreign exchange purchases by the SBP, which caused the interbank rate of the dollar to touch a record high of Rs110.5 on September 26 before closing at Rs105.35 on the same day. “This unprecedented movement in a single day was triggered by the settlement of a large oil payment, which caused some misperception in the foreign exchange market… The fact that the interbank rate settled so quickly reflects how adverse market sentiments can trigger exaggerated movements in the rupee,” it said.

Inflation

The headline inflation figure increased to 8.1% in the first quarter of 2013-14 compared to 5.6% in the preceding quarter.

The SBP said the rupee depreciation against the dollar depreciation was ‘partially responsible’ for the increase in inflationary pressures. “Weaker rupee not only triggered inflation expectations, but also pushed up prices of imported items, like petroleum products,” the SBP said, adding that the impact on the headline inflation was exacerbated by liberal export of onions, lower wheat stocks, and the collusive behavior of traders and distributors, which pushed food inflation into double-digits.

Government borrowing

Government borrowing from the central bank was more pronounced in the first quarter of 2013-14, as commercial banks did not participate actively in T-bill auctions held during the quarter. As a result, the government could not meet the limit of zero quarterly borrowing from the SBP, though its borrowings were well below the limit agreed with the IMF.

Thus, the fiscal deficit fell to 1.1% of GDP in the quarter from 1.2% in the corresponding quarter of the preceding fiscal year. Saying that the improvement occurred on both revenue and expenditure sides, the report stated it was the increase in tax rates and not the base which resulted in higher collection during the quarter. As for the expenditure side, a major role was played by the reduction in interest payments following the interest rate cuts in 2012-13.

Public debt posted a record increase of Rs1 trillion during the quarter, which can primarily be traced to large revaluation losses associated with the external debt stock due to adverse exchange rate movements