OPENING A NEW BUSINESS IN PAKISTAN

PRESENTED TO: MRS RABIA NAWAZ

PRESENTED BY:

ARBIA A. KARIM(11410)MOONA MUSTAFA(11582)SHEIKH ABDUL BASIT (11409)SYED HUSSAIN AHMED(11511)ZAIN ABBAS(12307)

OPENING A NEW BUSINESS IN PAKISTAN

Starting a business takes talent, determination, hard work, and persistence

It also requires a lot of research and planning.

To become a successful business owner you need to learn how to manage and grow your business.

CHALLENGES FACED BY PAKISTANI BUSINESSMEN

Socio economic problems

Law & order and political situations

Technical problems

SOCIO ECONOMIC PROBLEMS:

Power crises Illiteracy Inflation corruption Unemployment

Power crises: The power crisis is costing businesses across

Pakistan tens of millions of dollars in lost production in our particular business the production of pulses and harvesting have been a huge hit of this issue.

As the government of Pakistan has planned a program for 2012 to start solar and wind energy generation.

Installing turbines from the Karachi to Gwadar coastline has enormous potential for generating wind energy. Wind towers can generate between 7,000 to 10,000 MW of electricity that will overcome the shortage of 4000MW.

Illiteracy: Literacy is defined as persons aged 15 or

above who can “read” and “write”. According to this definition, Pakistanis

officially reported to have 50% literacy rate. Which means half of its population is illiterate.

But as the government has appraised educational standards and deployed huge budget for educational sector with a rapid increase in Literacy rate to 60% and increasing.

Literacy rate according to gender

A RAPID INCREASE DURING THE PAST YEARS.

Inflation

The word “inflation” refers to a general rise in prices measured against a standard level of purchasing power.

The inflation rate in Pakistan was last reported at 11% percent in October of 2011.

Common reason of inflation is a rise in production costs, which leads to an increase in the price of the final product. For example, if raw materials increase in price, this leads to the cost of production increasing, this in turn leads to the company increasing prices to maintain their profits

Government controlling inflation

Pakistan regulated inflation through controlling the trade deficit of the country and increasing export thus supporting local business going world wide.

Government of Pakistan has made way for local businessmen to export and expand Thus increasing GDP.

AS THE EXPORT AND REHABILITATIVE PROGRAMS BY GOVT INCREASED GDP PC Income

Corruption It is a widely held view that corruption

in Pakistan is widespread, systematic, and that it is entrenched at all levels of government

The important business publication such as World Economic Forum’s Global Competitiveness Report (2007-08) says that corruption is the third greatest problem for companies for doing business in Pakistan.

A World Bank report containing an assessment of the Pakistan’s Infrastructure Capacity (PICA) dated February 2008 states that 15% of Pakistan’s Development budget for 2007-08 was lost in the procurement process alone due to corruption

While the Securities and Exchange Commission has set up a relatively fast system of e-Services to help businesses register and to over come corruption ,other procedures takes the average time of setting up new businesses to 21 days and around PKR 75000 to acquire land and an average of Rs 25,432 to avoid tax auditing including bribe.› http://www.doingbusiness.org/data/exploreeconomies/paki

stan/starting-a-business

Unemployment Unemployment is also regarded as a major social problem. Major portion of Pakistan’s population consists of youth and

a large number of young people who have the ability and are willing to work are unemployed.

Unemployment has a direct impact on all businesses. People buy products and services and if they do not have a job they will buy less products and services. That is why increasing unemployment often results in many businesses reducing inventories because they expect to sell less.

The unemployment is gradually decreasing with the help of City government (CDGK) and other governement institutions are hiring people and providing them social jobs such as a new culture of city wardens at traffic signals controlling signals and other jobs. Thus increasing jobs.

As the unemployment Decreasing and employments increasing in the society the more buyers are entering market thus increasing demand.

Regarding our business the food industry is always on the peak as no matter what the situation is people are willing to buy edibles as it is the basic necessity of life.

With more competitive prices in the main market of Jodia Bazar more potential buyers are diverting here thus giving us advantage for selling more.

LAW & ORDER AND POLITICAL PROBLEMS:

Security issues Strikes Bhatta Kidnapping and robbery Terrorism and religious extremist

Strikes

Political strikes are destroying daily businesses.

The effects of strikes on business are negative.

Thus Government of pakistan has announced that no political party can call strike unless approved by government.

Thus reducing unannounced strikes and shutdowns .

EXORTION (BHATTA)

Karachi is the financial hub of the country may not remain a lucrative money-making metropolis for much longer if its business community continues to face hardships.

Businessmen are receiving ‘bhatta parchis’ or extortion receipts from mafia groups across the city who demand money to provide them protection but threaten them with dire consequences if the demands are not met.

The minimum a shopkeeper has to pay on average is around Rs25,000 – an amount which often increases depending on the size of the business and the earnings.

The businessmen are afraid because the illegal mafias are not accountable. They loot, kill and grab properties without fear and no one has ever been apprehended. Target killers have been identified on many occasions but none arrested. No one has been punished for.

Kidnapping and robbery

Kidnapping for ransom has always been a disturbing crime.

Many businessmen are getting kidnapped for high ransom.

But the main reasons behind it is unemployment and government compensating it have bravely fought with it.

Terrorism and religious extremist

The whole world looks at Pakistan as a land of terrorists.

As Pakistan fought war against terrorism and has demolished the roots of extreme terrorism from all over the Pakistan.

It has attracted most of the foreign investment from all over the world as well as creating a business friendly environment.

Chinese and Pakistani Government has established a Currency swap Agreement with Pakistan to promote trade and exchange.

http://tribune.com.pk/story/311893/currency-swap-agreements-easing-pressure-on-the-rupee/

TECHNOLOGY: The technology is spreading like a wild fire. How many

people five years ago could have thought that even in a small towns and villages of Pakistan, one would access to mobile telephones. 95 million Pakistanis have mobile phones today. You can use this technology in order to provide them banking services, information on climate/weather, agriculture extension, health, education etc. It is a powerful tool which can leapfrog a lot of time which we have wasted. Using technology particularly the information/communication technology for the betterment of social and economic problems of Pakistan is something which needs to be done but it cannot be done the way we have compartmentalized this into different ministries. A more holistic and comprehensive approach that deploys technology for poverty reduction has to be put in place.

Pakistan from foreign investment point of view.

The World Bank recognized Pakistan as in the top ranked countries in the region for "ease of doing business 2012”.

Pakistan is the 83rd most business friendly country in the world in its annual 'Ease of Doing Business' report.

As Recent reforms improved our position and helped sustain our position as the first most business friendly location in our region.› http://www.pakboi.gov.pk/index.php?option=com_content

&view=article&id=101&Itemid=34

The World Bank recognized Pakistan, 105th rank in Ease of Doing Business, while the 90th rank in starting a business in the world, in its annual 'Doing Business' report.

Strengths of Pakistani food industry

Cost advantage Asset leverage Natural resource Quality advantage Loyal customers Supply chain Pricing Real estate Unique products Consistency in taste.

FROM 2003-2011

OPPORTUNITIES OF PAKISTANI FOOD INDUSTRY

Acquisitions (skilled farmers) Asset leverage ( Engro Pakistan) Financial markets (raise money through

debt, etc) Emerging markets and expansion abroad Innovation ( Olpers ) Online Product and services expansion Takeovers (Nestle Pakistan)

MONTHLY/2011 In millions, PKR

Ambassador Jamil said Pakistan's exports of food products to Gulf Cooperation Council (GCC) region stand at one billion dollar and the UAE shares around fifty percent of the total bill. He said Pakistan was participating in the SIAL food fair for the first time which had become a truly international brand and added that it was an opportunity to meet leading food suppliers of the Middle East.

Prime Minister Yusuf Raza Gilani at his chamber in the Parliament House to UAE Delegations said that Pakistan produces high-quality mango, apple, citrus, date, guava, apricot and other fruits in abundance that contributed to GDP of pakistan.

The food products that contributed to positive growth included fish and fish preparations, exports of which increased from $106.742 million last year to $125.959 million during the first five months of this year, showing an increase of 15.83 percent.

Exports of fruits also increased by 13.94 percent

The exports of leguminous vegetables (pulses) witnessed 100 percent increase

Interesting Facts

Wheat and spices exports from the country also urged by 100 percent and 9.10 percent

exports of meat and meat preparations increased from $56.669 million to $73.789 million, showing an increase of 30.20 percent

Exports of oil, seeds and kernals increased by 125.23 percent

Copyright APP (Associated Press of Pakistan), 2011

CONCLUSION

As every country has pros and cons so does Pakistan, but that doesn’t mean there is nothing being done or can be done.

Regardless of many socio economic and political problems prevailing in society we still opt to open a business venture in Pakistan.

“Lots of problems creates lots of opportunity, to solve them, the one who catches them wins the game”.