Interview with Mr Samad Habib — Chief Executive, Javedan Corporation Ltd
After completing his education in Business Administration, Mr Samad Habib started his career at the Arif Habib Group joining the brokerage business. He moved through various aspects of the business from an analyst to research and eventually moved towards leading the business. During the time in the financial services sector, he served as a core team member looking at various group investments at a strategic partnership level and developed a strong desire to see Pakistani businesses operate according to international standards. With time, the strategic interests at the Group level have spanned through various sectors in addition to financial services, from fertilizer, dairies, cement, concrete and steel to property management and real estate development. He now leads the Group’s Real Estate Business and is serving as Chief Executive at Javedan Corporation Limited, presently developing Naya Nazimabad. ABOUT NAYA NAZIMABAD: Naya Nazimabad is a gated, residential scheme spanning 1,366 acres with all amenities required to form a well-rounded community from community center club with an international standard cricket ground and other sports facilities with necessities of life such as medical centers, a full service hospital, central mosque etc. To ensure a bright future for our community, we have an education precinct, which focuses on all aspects of personal development such as school, college and vocational training. The development is anchored with a commercial district latched on to the south, which provides a vibrant mix of formal retail, bazaar areas, restaurants, entertainment, leisure and is capped by over 65 apartment towers. The ethos of Naya Nazimabad is to provide quality housing to the backbone of our society, the middle class and at the end of the development phases we expect 30,000 to 35,000 dwellings with a population of over 200,000 to be resident here.
PAGE: WHAT ARE YOUR EXPECTATIONS FROM THE UPCOMING BUDGET?
SAMAD HABIB: Public finance has remained a challenge for the government and the economy needs to be strengthened by creating a perfect balance of public finance to develop private enterprise. The present government has focused its time on economic stabilization having ridden through the IMF loan tenure. This focus is now growth and employment creation and I expect the budget to be investment-friendly to achieve these objectives.
PAGE: YOUR VIEWS ON THE REAL ESTATE MARKET IN PAKISTAN:
SAMAD HABIB: While real estate in Pakistan has been through a period of sustained growth in the long term, it has not been successful in the provisioning of the basic need for housing. This requires the real estate sector to be formalized and regulated to provide a strong contribution to the economy as seen globally. Rather than real estate growth being based on speculation, which gives rise to super-adequacy, it needs to be structured formally and have access to formal sources of finance to truly develop. The fundamentals for real estate are all positive; economic fundamentals, demographics and social trends. We now need these sources to be harnessed to see our real estate sector truly evolving.
PAGE: WHAT ARE YOUR VIEWS ON THE CURRENT STATE OF ECONOMY?
SAMAD HABIB: The economy is moving away from the stabilization phase into a focus on achieving a trajectory of growth. The indicators, macro and micro along with factors such as Pakistan’s inclusion in the MSCI Emerging Markets Index and the renewed confidence of international investors all signify an upcoming period of high growth. I feel CPEC would be instrumental in achieving this and all divergent forces tend to agree on the successful execution of the CPEC plans. The challenges that remain for our economy are sustainability of the current account and employment generation to support the youth bulge in our demographic trend.
PAGE: HOW WOULD YOU COMMENT ON THE TAXATION ISSUES?
SAMAD HABIB: Pakistan has one of lowest tax-to-GDP ratios in the world, which poses serious repercussions for economic management and the social sector. The tax regime needs to be overhauled to broaden the tax net and make it expensive for the untaxed segment to operate in this economic environment.
The documentation of our economy using a tax instrument needs to be undertaken and measures are needed to make it more favorable for the untaxed segment to move into the tax-paying side of the fence. At the moment, the tax structure puts the formal sector at a distinct economic disadvantage and we need an indigenous solution specifically tailored to our market for a reversal.