Faisal Hashmi is working as consultant to World Gold Council for
Pakistan. Currently he holds the office with the objective of
stimulating gold demand in jewellery and investment sectors in
Pakistan market. having earned the experience in local gold
market, he possesses the inside knowledge about the existing
situation and what should be done on individual and government
levels to make this sector more productive and better
contributor towards Pakistan's economy. At the age of 29, he
carries with him a valuable combination of education and
experience. Since the beginning of his career, after completing
MBA, he has worked in multinational environment.
What is the importance of gold in this part of the world?
Gold, as jewellery, has
always been in demand in this part of the world. It is not only a symbol
of prosperity but also an investment. It is a tradition in our society
that mothers/mothers' in law wish to pass on to their
daughters/daughters' in law, which they have received from their
ancestors. With dollar becoming less attractive and declining interest
rates there is a gradual shift towards investment in gold. The
availability of gold bars, of guaranteed purity, now also encourages
people to invest in this precious metal. However, a point of concern is
that such gold bars mostly come to Pakistan through informal channels.
These bars are ultimately bought by the jewellers for preparing
What is the role of World Gold Council?
is basically an organization established and funded by gold miners. The
core objective of World Gold Council (WGC) is to promote gold demand in
the form of jewellery as well as investment in gold bars. Another, but
most important, objective is to advice the governments to minimize
restrictions on movement of gold across the borders. Movement of gold
through legal channels gets documented which also reflects in GDP,
through value addition, and also help in revenue collection. I believe
that too much control proliferate smuggling. In such a scenario both the
government and investors/buyers are the losers.
What is your estimate about the inflow of gold into Pakistan?
According to conservative
estimates annual consumption of gold in Pakistan is around 120 tonnes.
Out of this only 25 tonnes is imported officially and an equal quantity
is brought in the shape of jewellery. Another 8 to 10 tonnes of gold is
recycled — production of jewellery through remelting. The remaining
quantity is brought through informal channels. The value of 120 tonnes
of gold is estimated about Rs 75 billion. If the total quantity is
imported officially and only one per cent duty is charged, it would
still contribute Rs 750 million towards the national exchequer.
What are the reasons for inflow of such a large quantity through
In the past the GoP wanted to have stringent controls on inflow of gold
into the country. Only a few entities were allowed to import which
created monopolization on the trade. According to the latest Trade
Policy now any one can import gold. This step combined with one per cent
duty will help in eliminating the incentive to bring in the precious
metal through informal channels. Let me tell you that Pakistan is not
the only exception. In India, previously large quantities of gold were
smuggled but with the liberalization of laws the import through official
channels has increased manifold.
In what form normally gold is brought into Pakistan?
Gold is normally traded in
bars of different weights and purity levels. In India and Pakistan gold
jewellery fabricators mostly rely on a small cast bar denominated in tolas,
weighing ten tolas equivalent to 3.75oz or 116.638g. Being
lightweight it is the world's most preferred gold bar. The ten tola
bar dimensions are approximately 44mm (height), 27mm (width) and 5mm
(thickness), with a usual millesimal gold purity of 99.9 per cent. The
bar has smooth, rounded edges. Another important feature is that the bar
has no serial number, unlike almost all other cast bars available on the
What is Pakistan's annual export of jewellery?
Pakistan exports jewellery worth US$ 20 million. This comprise of gold
as well as precious stones. As oppose to this, jewellery export from
India constitute nearly 15 per cent of its total export. The reason
Pakistan has not been able to boost its export is lack of use of
technology. This means, lack of production of high quality gold
jewellery at large scale. For example globally the sale of one single
item, wedding ring, is in millions but Pakistan cannot cater to this
demand due to lack of massive production facilities.
What other measures can help in promoting local sales and export of
Buyers of jewellery are
never certain about the purity standard. This can be achieved by 'hall
marking'. This will give the confidence to buyers and also a reputation
to jewellery merchants. The GoP should also create facilities for the
training of craftsmen and facilitate import of machinery for large scale
production of jewellery. Our aim should be large volume not a few
hundred pieces of large weight.