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Unlocking
True potential
Boosting Pakistan’s
Private Sector
Saad Amanullah Khan
Vice President ABC
What is
RAISING
its temperature ?
LOWEST INVESTMENT IN 40 YEARS
SLOW DOWN IN ECONOMIC GROWTH
DISMAL GROWTH IN LARGE SCALE
MANUFACTURING
UNEMPLOYEMENT ROSE
I...
…. and more
PUBLIC SECTOR BLEEDING PROFUSELY
Rs. 450 Billion estimated to be its combined losses
What is
Keeping it
NORMAL ?
37o
CURRENT ACCOUNT DEFICIT TURNED
SURPLUS
FLUCTUATING YET RISING EXPORTS
GROWING IMPORTS
PUBLIC DEBT as % of GDP
EXTERNAL DEBT & LIABILITIES as % of
Forex Earnings
EXPANSION OF TAX NET
INLFATION
Improve
Security and
Law & Order
Improve & Fix
Infrastructure
Consistency
in Tax &
Trade Polices
Attract
FDI
Only ‘1’ economic
indicator guarantees
a nation’s long term
success …
GDP GROWTH RATE
guarantees
GDP Growth
has significant
impact on
“PER CAPITA”
& hence
“STANDARD OF LIVING”
DID YOU
KNOW
PAKISTAN’s
GDP RECORD
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
60 - 70 70 -80 80 -90 90 - 00 00 -10 08 -10
6.8
4.8
6.9
4.0
4.6
3.2
GDPGrowthRate(%)
Gen.
Ay...
WITH
GDP Growth (%)
60 - 70 70 -80 80 -90 90 - 00 00 -10 08 -10
China 3.0 7.4 9.8 10.0 10.3 9.7
India 6.7 2.9 5.7 5.6 7.4 7.9
P...
-
200
400
600
800
1,000
1,200
1,400
1,600
1960 1970 1980 1990 2000 2008 2010
India Pakistan
-
500
1,000
1,500
2,000
2,500
...
GDP growth rate
POWER
OF
PRIVATE
SECTOR
Based on
Current GDP
Growth rates
POWER
OF A
SINGLE
COMPANY
This is the
IMMENSE POWER
of the Private Sector
IF
Properly Channeled
DID YOU
KNOW
THIS ABOUT
PAKISTAN
PRIVATE SECTOR
Last company in Fortune 500:
Dia Nippon Printing $17 Billion
Largest Pakistani Company:
PSO $8.5 Billion
Large Indian Comp...
German company ‘Volkswagen’
Top 4 Indian companies together
THESE ARE LARGER THEN
PAKISTAN’s GDP
9 largest companies in th...
PRIVATE SECTOR
AND
INDIVIDUAL
COMPANIES
CAN MAKE THE
DIFFERENCE
OUR
ECONOMY
OUR
COUNTRY
But current status is
DISMAL
0.2% of Global GDP
0.3% of Global Trade
118/144 in Country
Competitive Index*
We have a great...
21.8%
23.6%
54.6%
Agriculture Industry Services
GDP Split by Sectors
HOW IS OUR
INDUSTRY &
SERVICES SECTOR
PERFORMING
2 KEY
QUESTIONS
a) How Developed
is this sector
b) Is it Organized
a) How Developed
is this sector
One way to check if
Industry & Services Sector
is Under-Developed is when:
Agricultural Sector
split of GDP is in
Double D...
Double digit Split: 6 countries
> 15% = 3 Countries
> 20% = Pakistan ONLY
World Largest 30 Economies – Agricultural Split
...
For any economy
with a Developed
Industry/Service Sector
the
AGRICULTURE SPLIT
<10%
0
50
100
150
200
250
300
350
400
Current Services/Industry
Developed
36 36
134
400
Agriculture Services & Industry
9%
To B...
2 KEY
QUESTIONS
a) How Developed
is this sector
b) Is it Organizedb) Is it Organized
-
20
40
60
80
100
120
140
160
180
22
173
166
93
81
74
107
* World Bank website
Market Capitalization of Listed
Companies a...
550 600 650 700 750 800
2011
2006
2000
637
651
762
# of Listed Company
Karachi Stock Exchange (Guarantee) Ltd.
125
LESS
Co...
* KSE Only
*
0% 20% 40% 60% 80% 100% 120%
Switzerland
Netherland
Taiwan
Australia
China
India
Pakistan
103%
102%
66%
24%
1...
SYMBOL COMPANY NAME MARKET CAP (Rs)
OGDC Oil & Gas Development 734,727,598,572
PPL Pakistan Petroleum 259,489,514,176
MCB ...
In Pakistan:
Organized
Sector
UnorganizedSector
Why ?
1. Too Regulated ?
2. High Taxation ?
3. Difficult govt.
polices &
procedures ?
4...
PRIVATE SECTOR
IS THE FIRE THAT WILL
DRIVE OUR ECONOMY
We need to address the 3 C’s:
1. What govt. policies will help
drive ‘corporatization’ ?
2. What do we need to do to
becom...
NOW
YOU
KNOW
ONCE
we were
GREAT
WE HAD A PROGRESSIVE ECONOMIC OUTLOOK
Pakistan was called out amongst “THE NEXT 11” by
Goldman Sachs Research in 2005
WE CAN
STILL
BE
GREAT
WE MUST DRIVE
DOUBLE DIGIT
GDP GROWTH
FOR A FEW DECADES
1. Having a Clear Vision & Select Strategies
2. Robust Corporate G...
CAN BE
BRIGHT
FUTURE
THANK YOU
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"
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Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"

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I made this presentation for the inaugural session of American Business Council (ABC) Economic Summit in 2011. That year I was the Vice President of ABC and the topic I chose was "How to make the Private Sector More Vibrant". Challenge for Pakistan is the our GDP growth is very poor and the only savior is if our private sectors, specially small and medium businesses pick up.

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Saad Amanullah Khan's 2011 ABC Economic Summit Presentation "How to make the Private Sector more Vibrant?"

  1. 1. Unlocking True potential Boosting Pakistan’s Private Sector Saad Amanullah Khan Vice President ABC
  2. 2. What is RAISING its temperature ?
  3. 3. LOWEST INVESTMENT IN 40 YEARS SLOW DOWN IN ECONOMIC GROWTH DISMAL GROWTH IN LARGE SCALE MANUFACTURING UNEMPLOYEMENT ROSE INFLATION ACCELERATED PROVERTY INCREASED FISCAL DEFICIT SURGED FDI (US$ M) DECLINED POST 2007
  4. 4. …. and more PUBLIC SECTOR BLEEDING PROFUSELY Rs. 450 Billion estimated to be its combined losses
  5. 5. What is Keeping it NORMAL ? 37o
  6. 6. CURRENT ACCOUNT DEFICIT TURNED SURPLUS FLUCTUATING YET RISING EXPORTS
  7. 7. GROWING IMPORTS PUBLIC DEBT as % of GDP EXTERNAL DEBT & LIABILITIES as % of Forex Earnings EXPANSION OF TAX NET
  8. 8. INLFATION
  9. 9. Improve Security and Law & Order
  10. 10. Improve & Fix Infrastructure
  11. 11. Consistency in Tax & Trade Polices
  12. 12. Attract FDI
  13. 13. Only ‘1’ economic indicator guarantees a nation’s long term success … GDP GROWTH RATE guarantees
  14. 14. GDP Growth has significant impact on “PER CAPITA” & hence “STANDARD OF LIVING”
  15. 15. DID YOU KNOW PAKISTAN’s GDP RECORD
  16. 16. - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 60 - 70 70 -80 80 -90 90 - 00 00 -10 08 -10 6.8 4.8 6.9 4.0 4.6 3.2 GDPGrowthRate(%) Gen. Ayub 60 - 69 Gen. Yahya 70 – 72 Bhutto 73 – 77 Gen, Zia-ul-Haq 78 - 79 Gen. Zia-ul-Haq 80 – 88 Benazir 88 - 89 Nawaz 90 – 93 Benazir 93 – 96 Nawaz 97 – 98 Musharaf 99 Gen. Musharaf 00 – 07 Asif Zardari 08 - 99 Asif Zardari 08 - 10
  17. 17. WITH
  18. 18. GDP Growth (%) 60 - 70 70 -80 80 -90 90 - 00 00 -10 08 -10 China 3.0 7.4 9.8 10.0 10.3 9.7 India 6.7 2.9 5.7 5.6 7.4 7.9 Pakistan 6.8 4.8 6.9 4.0 4.6 3.2 LEGEND Above 7% 5% to 7% Below 5% +6.5%+4.7% 4 1 1 3 1 2 3 60 - 70 70 -80 China 3.0 7.4 India 6.7 2.9 Pakistan 6.8 4.8 LEGEND
  19. 19. - 200 400 600 800 1,000 1,200 1,400 1,600 1960 1970 1980 1990 2000 2008 2010 India Pakistan - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 1960 1970 1980 1990 2000 2008 2010 China Pakistan Per Capita Current $ Avg. 90 -10 China 10.1 India 6.5 Pakistan 4.3 Avg 60 - 89 China 6.7 India 5.1 Pakistan 6.2 -($500) -($3,400)-($3) +$56 vs. INDIA vs. CHINA vs. INDIA vs. CHINA
  20. 20. GDP growth rate
  21. 21. POWER OF PRIVATE SECTOR
  22. 22. Based on Current GDP Growth rates
  23. 23. POWER OF A SINGLE COMPANY
  24. 24. This is the IMMENSE POWER of the Private Sector IF Properly Channeled
  25. 25. DID YOU KNOW THIS ABOUT PAKISTAN PRIVATE SECTOR
  26. 26. Last company in Fortune 500: Dia Nippon Printing $17 Billion Largest Pakistani Company: PSO $8.5 Billion Large Indian Companies: Indian Oil $68.8 Billion (# 1) Reliance Ind. $58.9 Billion (# 3) Reliance Industries alone is bigger then all Companies in Pakistan Turkey’s largest company, Koc Holding is bigger then our top 30 Co’s
  27. 27. German company ‘Volkswagen’ Top 4 Indian companies together THESE ARE LARGER THEN PAKISTAN’s GDP 9 largest companies in the world Top 3 Mexican companies together
  28. 28. PRIVATE SECTOR AND INDIVIDUAL COMPANIES CAN MAKE THE DIFFERENCE
  29. 29. OUR ECONOMY OUR COUNTRY
  30. 30. But current status is DISMAL 0.2% of Global GDP 0.3% of Global Trade 118/144 in Country Competitive Index* We have a great NATION with rich resources and potential to be GREAT * Dropped 17 positions 2011 vs. 2009 World Economic Forum World’s largest Copper Reserves 2nd Largest Coal Reserves 3rd Largest Cotton Producers 6th Largest in Wheat Production 6th Largest Population 10th Largest Work Force 3 Million workers entering workforce every year
  31. 31. 21.8% 23.6% 54.6% Agriculture Industry Services GDP Split by Sectors
  32. 32. HOW IS OUR INDUSTRY & SERVICES SECTOR PERFORMING
  33. 33. 2 KEY QUESTIONS a) How Developed is this sector b) Is it Organized a) How Developed is this sector
  34. 34. One way to check if Industry & Services Sector is Under-Developed is when: Agricultural Sector split of GDP is in Double Digits
  35. 35. Double digit Split: 6 countries > 15% = 3 Countries > 20% = Pakistan ONLY World Largest 30 Economies – Agricultural Split 0% 5% 10% 15% 20% 25% World EuropeanUnion UnitedStates China Japan India Germany Russia UnitedKingdom Brazil France Italy Mexico SouthKorea Spain Canada Indonesia Turkey Australia Taiwan Iran Poland Netherlands Argentina SaudiArabia Thailand SouthAfrica Egypt Pakistan Colombia Malaysia Belgium 1. India 2. Indonesia 3. Iran 4. Thailand 5. Egypt 6. Pakistan 1 2 3 4 5 6
  36. 36. For any economy with a Developed Industry/Service Sector the AGRICULTURE SPLIT <10%
  37. 37. 0 50 100 150 200 250 300 350 400 Current Services/Industry Developed 36 36 134 400 Agriculture Services & Industry 9% To Be DEVELOPED Services & Industry has to grow 3 times Agriculture Split of GDP 22%
  38. 38. 2 KEY QUESTIONS a) How Developed is this sector b) Is it Organizedb) Is it Organized
  39. 39. - 20 40 60 80 100 120 140 160 180 22 173 166 93 81 74 107 * World Bank website Market Capitalization of Listed Companies as % of GDP Pakistan Organized Corporate Sector extremely Under-Developed @ 22% it DWARFS in comparison
  40. 40. 550 600 650 700 750 800 2011 2006 2000 637 651 762 # of Listed Company Karachi Stock Exchange (Guarantee) Ltd. 125 LESS Co’s in 10 years
  41. 41. * KSE Only * 0% 20% 40% 60% 80% 100% 120% Switzerland Netherland Taiwan Australia China India Pakistan 103% 102% 66% 24% 19% 18% 11%
  42. 42. SYMBOL COMPANY NAME MARKET CAP (Rs) OGDC Oil & Gas Development 734,727,598,572 PPL Pakistan Petroleum 259,489,514,176 MCB MCB Bank Ltd. 173,739,531,529 HBL Habib Bank Ltd. 122,169,247,200 NESTLE Nestle Pakistan Ltd. 107,698,834,688 NBP National Bank Pak. 103,358,443,001 FFC Fauji Fert 85,399,409,730 UBL United Bank Limited 83,525,780,112 PTC P.T.C.L.A 73,291,080,000 POL Pak Oilfields 70,008,130,483 ENGRO Engro Corporation 63,518,664,557 ULEVER UniLever Pak 57,963,576,760 ABL Allied Bank Ltd. 54,864,373,505 PSO P. S. O. 50,629,155,528 HUBC Hub Power 43,289,146,104 SYMBOL COMPANY NAME MARKET CAP* (Rs) GOVERNMENT OWNED ENTITIES ACCOUNT FOR 66% OF TOP 15 FIRMS * Dec 2010
  43. 43. In Pakistan:
  44. 44. Organized Sector UnorganizedSector Why ? 1. Too Regulated ? 2. High Taxation ? 3. Difficult govt. polices & procedures ? 4. Political will ? 5. ….. Estimated to be 2 to 3 times organized
  45. 45. PRIVATE SECTOR IS THE FIRE THAT WILL DRIVE OUR ECONOMY
  46. 46. We need to address the 3 C’s: 1. What govt. policies will help drive ‘corporatization’ ? 2. What do we need to do to become ‘competitive’ ? 3. How to gain ‘confidence’ of businessmen & investors?
  47. 47. NOW YOU KNOW
  48. 48. ONCE we were GREAT
  49. 49. WE HAD A PROGRESSIVE ECONOMIC OUTLOOK Pakistan was called out amongst “THE NEXT 11” by Goldman Sachs Research in 2005
  50. 50. WE CAN STILL BE GREAT
  51. 51. WE MUST DRIVE DOUBLE DIGIT GDP GROWTH FOR A FEW DECADES 1. Having a Clear Vision & Select Strategies 2. Robust Corporate Governance Structure 3. Conducive Government Polices 4. Invest in Human Capital & Resources 5. Simple & Easy Financing Available
  52. 52. CAN BE BRIGHT FUTURE
  53. 53. THANK YOU

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