Jan 3 - 9, 20


SYED JOHAR ALI QANDHARI: I was born in Karachi in a business family. I took basic education from Prince Ali Boys & Kulsoom Bai Valika School, Karachi and I did my graduation from National College, Karachi. Later, I went to United Kingdom for higher education. I obtained Law Degree from Oxford University, as I always wanted to be a lawyer. My great grandfather started commodities trading in 1952, later in 1979 my father established a flourmill, in addition to commodity trading. After coming back to Pakistan, I, being the only son, had no option but to join family business and forgo my dream to work as a lawyer. I chose to continue my father's footsteps. Because of my international exposure and education, I made some very valuable contribution to our business. We have now best machines, made in Switzerland, to carry out the manufacturing for food process of international standards. We supply flour to some of the best international food chains in Pakistan. We have some 150-200 employees in our factory and in addition, more than 1000 workforce is indirectly associated with our business. My focus is not on maximizing the profit of the company but to provide best flour products to the masses at most affordable prices as flour is our basic food and poor and rich both use it. In addition, we are well aware of our corporate social responsibilities, and we are doing a lot in this front. I have passion to do something for our trade and industry, therefore, I became Member of Executive Committee of Korangi Association of Trade and Industry (KATI) in 2007 and later the members of KATI reposing the confidence upon me elected me as Vice Chairman 2008 in and finally Chairman for the term 2010-11. I also have the honour to serve as Chairman of All Pakistan Flour Mill Association. I learned a lot from my father and my business leader S.M. Muneer as they both taught me how to handle difficult situations and take bold decisions. I also follow the quote "Leaders do not create followers but leaders" while doing work.


SYED JOHAR ALI QANDHARI: In present economic and political scenario, doing business in Pakistan is difficult as uncertainty is the greatest hindrance in fusing more capital into any business venture. People are afraid in making investment both in human as well as in monitory terms as they are not sure whether they will get fair returns on their investment. Further, the things have aggravated due to multiple challenges being faced by us like ever increasing cost of doing business, power outages, worsening law and order situation, which barred the foreign buyers and investors to come to Pakistan. We are 37 percent costlier in production than our neighbors are. Due to these reasons, industrialists are moving to other countries where power is available and at cheaper rates and the law & order is conducive for business. Two types of measures are required to be taken to address the ailing economy; short term measures like improving the law and order of country, specially at the business hub of Pakistan Karachi. Others are long term like gradually lowering the interest rate and increasing the tax net by bringing all the income earners in the tax net so that our tax-to-GDP ratio could be increased and more money would be available for public development projects. I see a very challenging future specially from neighboring countries as they could produce much cheaper products and could capture major markets. However, I am optimistic about the future as Pakistan is full of natural as well as human capital and with good governance and long-term business friendly policies we can turn the table.


SYED JOHAR ALI QANDHARI: The current annual results showed that banks were in profit but actually most of profits were earned by big five banks whose share in the market is increasing each year. Last year, the big five banks (NBP, MCB Bank, HBL, UBL and ABL) earned over 85 percent of the entire profit of the banking industry. Most of the banks have been struggling hard to improve their deposits while at least 10 banks are still unable to meet the Minimum Capital Requirement (MCR). They are living on extensions given by the SBP on deadline to meet the MCR. The total deposits of the banking sector grew by 10.5 percent in 2009 while total net advances grew by 1.7 percent during the same period. Small and medium banks had to get high cost deposits but sill lacking behind the target. This shows an improvement in overall deposits but poor advances show the banks have very little option other than government papers to perform in the economy. Banks have been investing in government papers on mass scale and earned risk free profits, however, their approach of banking is depressive for economic growth. Now is the time to consider on microfinance banking. In my view, we can serve low-income salaried, self-employed and micro entrepreneurs with the range of financially designed products that may allow them to grow their businesses and produce significant economic multiplier effects in local economy. In this connection, we should follow the footsteps of Professor Muhammad Yunus founder of "Grameen Bank" Bangladesh and we should also launch an action research project to examine the possibility of designing a credit delivery system to provide banking services targeted at the rural poor. By this, we can extend banking facilities to poor men and women, eliminating the exploitation of the poor by moneylenders, creating opportunities for self-employment for the vast multitude of unemployed people in rural areas, and bringing the disadvantaged, mostly the poor man and women from the poorest households, within the fold of an organizational format which they can understand and manage by themselves. Grameen Bank has 8.33 million borrowers with 2,565 branches and provides 81,373 villages of the country covering more than 97 percent of the total villages of country.


SYED JOHAR ALI QANDHARI: Banking industry survives on lending and as such bank borrowing is part and parcel for the survival of industry. Unfortunately, with the closure of development financial institutions like NDFC and PICIC, the only option left for the industry is to obtain costlier financing from commercial banks as these specialised institutions provided cheap financing for the promotion of business and industry. Even SBP given special lines of credit at 3-4 percent for the purchase of locally manufactured machinery, thereby on one hand promoting local machinery and on the other providing cheap financing. Likewise, few years back leasing was also an excellent financial vehicle, which now is even more costlier than normal banking finance. The SBP is controlling inflation by raising bank markup at the cost of industrial growth. SBP should gradually lower the interest rate to a level of 3-4 percent which is hovering presently at around 14-17 percent and that would make a lot of difference.


SYED JOHAR ALI QANDHARI: The basic cause of inflation is due to heavy borrowing by government from SBP and SBP, to control it, is raising bank markup rates, which in turn again increasing the cost of commodities and ultimately results in rising further inflation. The first and foremost step to be taken by government is to stop further borrowing from SBP and cut down expenditure. Government should control the expenditure by limiting the number of ministries to a bare minimum. To generate the income and increase the tax to GDP ratio, the agriculture income should be brought to the tax net. Furthermore, at present our public sector organizations like PIA, Steel Mills, Railway, etc are eating some 300 billions of taxpayers' money per year due to inefficiency, bad governance and corruption. The government should either improve the efficiency by appointing competent persons or privatize them right away.


SYED JOHAR ALI QANDHARI: There are many incentives government can extend to industrial sector to grow business and industry in Pakistan. Among them are ensuring uninterrupted supply of gas and electricity to keep moving the wheel of industry besides conducive law and order, minimum interference from the government in business as at present there are a number of government departments which monitor the industry like labour, local administration, health, safety, fire, etc, and lowering the interest rate to 3-4 percent. Further, the institutions like EoBI and SESSI should be headed by persons from business community. The TDAP should have effective representation of business community on its board.