May 18 - 24, 2009

Despite the fact that the Information Technology is the only sector which has registered a surprising growth rate of around 50 percent for the last four years and some of the leading international players are also quite active in Pakistan, this extra vibrant sector is not included in the Corporate Excellence Awards organized by Management Association of Pakistan for the last 26 years.

Waqar Malik, Newly elected President of Map has however announced to include the IT sector in their criteria of Corporate Excellence Awards from next year.

The Management Association of Pakistan (MAP) on the back of a strong clout of the corporate sector in Pakistan has emerged as an impressive body attracting other countries in the region as well. This is reflected in the fact that neighboring India and Malaysia have recently sought guidelines from Management Association of Pakistan for initiating Corporate Excellence Award which is of course a tribute to the efforts of MAP creating awareness about best management practices amongst the corporate sector.

This was disclosed by Waqar Malik while conducting the 26th Corporate Excellence Awards which was presided over by Syed Salim Raza, Governor State Bank of Pakistan.

The top winner of the Excellence Award was IGI in Financial Management while in the category of Insurance IGI was again on the top. It is surprising that none of the textile company participated in the excellence awards, which clearly indicates that textile industry said to be the largest foreign exchange earner for the country through exports is still away from the corporate culture and being managed under Sethiya system.

The second award for financial management was jointly bagged by Siemens Pakistan and Pakistan Tobacco Company, which was surprisingly placed in the category of FOOD.

The event was full of surprises as despite presence of a large number of international players in the banking sector the first award won by Allied Bank while Faysal Bank stood the runner up. In the category of investment banking, Jehangir Siddiqi Investment bank was the winner. The engineering segment was topped as usual by Siemens Pakistan.

Speaking on the occasion Syed Salim Raza, Governor State Bank of Pakistan has said the current global economic crisis may result in slowdown in globalization and added that the most painful consequences of this would be felt by the emerging markets and the developing world.

The governor said the emerging economies are suffering from loss of export markets and withdrawal of foreign direct investment as capital is retained and repatriated. "The slowdown and reversal could be long, and would slow or even reverse the movement out of poverty, and limit the middle class expansion we were seeing," he added.

He reiterated that Pakistan has been less affected by the current global crisis as the country's banks are well capitalized and their assets and liabilities are squarely domestically based. He said that compared with other Asian economies, which heavily rely on exports to developed world, Pakistan is less affected because of its limited exports and low exposure in the international financial markets.

"With inflation coming under control, and with a huge domestic market, we could very usefully produce more for domestic economy, and take the opportunity to develop domestic commerce and domestic brands," he suggested.

SBP Governor said that the current financial crisis has overwhelmed the whole global story since the early 1980's wherein deregulation, liberalization, privatization resulted in financial globalization which was achieved not only by growth but also through cost effective, innovative and efficient supply chains.

He advocated economic managers should devise strategies to retain the positive effects of globalization that transformed the world and to ensure a balance in the economic management to allay the fears of emerging markets that current global crisis may result in state control of capital, trade protectionism, and restrictions on immigration.

The globalization has achieved a cut in global production costs as manufacturing shifted to cheaper overseas bases, prominently China and also other Asian countries. This kept costs down, dampened inflationary pressures for the U.S. consumer, and the fact that the Balance of Payments surpluses generated by exports to be reinvested in the U.S. kept the dollar strong, and supplied liquidity that kept interest rates low.

He said the U.S. financial sector debt grew from 22% in 1997 to 117% in 2008 and to 230% in the U.K., while U.S. household sector debt grew from 66% of GDP in 1981 to 100% in 2008. The U.S. in the 2000s was absorbing 70% of the world's savings.

"In the U.S. they had over borrowed consumers, financial institutions and the Government, while private markets are largely to blame, excess leverage was significantly made possible by the U.S. Fed keeping interest rates low, and ignoring consequent real asset inflation," he said and added, anyhow, the bubble got burst and the consequences are before us.

"So they have now, according to the IMF, about $4 trillion of debt to be written off banks balance sheets. Vast amounts of money are going in to salvage banks, and interest rates are the lowest in history, but the consumer is building up his balance sheet, and banks are not lending," he said.

The monetary policy in the developed world will not work under these conditions, and the whole weight lies on fiscal policy. Fiscal policy is exclusively directed by the Government and the cost of bailouts is likely to mean higher taxes now and in the future. "Without heavy Government intervention now, everywhere in the major economies the economy and the markets cannot revive," he added.


The total liquid foreign reserves held by the country stood at $ 11,107.6 million on 9th May, 2009. The break-up of the foreign reserves position is as under: -

i) Foreign reserves held by the State Bank of Pakistan: $ 7,755.3 million.
ii) Net foreign reserves held by banks (other than SBP): $ 3,352.3 million
iii) Total liquid foreign reserves: $ 11,107.6 million