10 DAWN Sunday February 19, 2017

The global balance seems to be in tatters. Brexit followed by Trumps victory in the US shattered the confidence in collective
wisdom, media and the future. The rapid-fire pattern of executive orders being churned out by the Oval Office spells protectionism,
isolationism, unilateralism and parochialism. The groundswell of reaction in the US and elsewhere has underlined the almost
universal discontent with the policy direction. Though CPEC has guaranteed Chinese patronage, Pakistan even without a
country-specific order yet is bound to feel the pressure with the attitudinal drift in the US which is one of the biggest trading
partners, home of the most influential currency, key patron of the development sector, and a major source of remittances. It is,
therefore, apt, at the completion of a very long first month of American presidency, to reassess

Business in a Trumpili world

In this special report, Dawn team reaches out to stakeholders for their views on what lies ahead and opinions on a strategy to deal
with the unfolding challenges
By Afshan Subohi
PAKISTANIS are somewhat reluctant to
accept, but it has been by no means business as
usual since the day President Donald Trump
took charge of the White House.
The choice of the team and the decisions
announced by the US president clearly signal a
policy turnaround. The flurry of orders over
the past one month has challenged the global
economic order and reopened debates on issues
that the world thought had been sorted out and
settled once and for all at the intellectual level.
These include women rights, religious free-
dom, refugee settlement, sensitivity to envi-
ronment concerns, treatment of socially disad-
vantaged citizens, value of delegation of power,
sharing and caring among nations for the
larger good, and the supremacy of the rule of
law. Today, none of it stands the way they stood
a few weeks ago.
Discussing the blowback of fanning
Islamophobia and how it could instill a new life
in what appears to be waning militancy in
Pakistan and elsewhere is beyond the scope of
this report despite the economic cost that the
worsening security situation entails.
Commenting on strictly the economic dimen-
sion, experts contacted said the negative by far
outweigh positive fallouts of changes initiated
in the US. It will take time to understand all
dimensions of a new Trumpili (a word coined
for Trumpian) world, said a commentator.
The upbeat factors include rise in flow of
remittances by non-resident Pakistanis; slow-
down in brain drain; less interference by the
US in local affairs and the consequent inward
shift of focus.
The list of fears is just as impressive. Only
more: uncertainty could depress private invest-
ment, bilateral trade engagement may weaken
with exports taking a hit; dollar volatility may
disturb the local currency market; sudden rise
in remittances may create bubbles in quick-
return avenues of investment like property,
stock and commodity markets; US capital flows
to development sector may shrink; and public
hostility towards US could exert pressure on
American companies in Pakistan.
It took centuries of sufferings and decades
of struggle to arrive at a stage in history where
racism, bigotry, misogyny came to be equated
with ignorance and backwardness. Despite
divergence on multiple issues, the humanity
covered great distance in the past three dec-
ades to evolve a consensus on issue that hurt
and help progress of citizens across the world,
commented a watcher defending protests
against Trump in and outside the US.
The progress on MDGs that lifted millions
out of poverty through interventions under
global watch was unimaginable 50 years back.
The launch of SDGs in 2015 further solidified
the spirit of collective action for making the
world safe, free and fair, he added.
Now if the leader of the most advanced
nation starts acting erratic and openly
expresses views and takes actions inspired by
dangerously conservative narrow outlook, peo-
ple and businesses have every reason to be
alarmed and resist as much as they can, he
concluded.
Corporate America which was projecting
Trump as a free market champion at the World communiqu that was quoted by the media. sible fallouts of protectionist bend in US policy SBP has yet to report the inflows after Trump
Economic Forum earlier got the first reality Back home, top business circles were deeply set. The economic diplomats in PM Sharif team took over late in January.
check when the president announced what was anxious about making sense of the possible claimed to have prepared a brief, suggesting Real estate consultants took great pains for
termed Muslim ban. impact on capital flows, currency and market measures to avoid disruption in bilateral trade obvious reasons to prove that the talk of another
The business heads of renowned US compa- accessibility, and how to adjust to those with the US. property bubble in the making was not true.
nies, including Amazon, Google and GE, who changes. They regretted the lack of guidance The bankers insisted that mild unrest in Well, at least my sister settled in US is here
have talented employees from all around the from the government. Pakistans currency market is rooted in other despite re-entry risks. She bought an apartment
world, including Muslim countries, opposed On its part, the government, fearing sanc- factors that had little or no connection to in haste as she wanted some place to return just
and claimed that their staff was critical to tions, did take certain security-related measures Trump or his policies. They dismissed the pos- in case the situation turns for the worse, a
their success and pledged to make their voice (banning and arresting leaders of banned out- sibility of higher flow of remittances from the friend discussing the subject commented.
heard by the new administration. fits). It announced broadening the base of the US which is unlike the post-9/11 phase. A property dealer concurred. I have not a
A hostile Muslim reaction will directly hurt combing operation to weed out rough elements. See data. It speaks louder than words. The shred of doubt in my mind that the next cycle of
our business as we have profitable subsidiaries Drawing comfort from the progress on CPEC data shows that remittances are actually fall- price spiral is just about starting, though it is
in many Muslim majority nations, said a joint front, the official position understated the pos- ing, a banker said. He seemingly forgot that hard for me to explain it.

Commerce minister Danger averted... but just

not expecting By Dilawar Hussain important economic and trade partner of Pakistan,
any implementation of the protectionists agenda by
all depended on how the Republicans decided to
view Pakistan.

any change
By Mubarak Zeb Khan
THE Ministry of Commerce has
prepared a paper assessing possible
consequences of the change in US
administration on Pakistans trade
relations with the US.
We will send our assessment
shortly to Prime Minister Nawaz
Sharif, said Commerce Minister
Khurram Dastgir Khan.
The US is the single largest export
destination for Pakistani products.
The change in the US administration
has sent chills down the spine of
Pakistani exporters who anticipate
changes in the trade regime.
Talking about such apprehensions,
Minister Khan ruled out any immedi-
ate change in trade regime with
Washington. The Trump administra-
tions current focus is on China and
NAFTA where changes in US policy
are unlikely to have any adverse
implications for Pakistan, he said.
Pakistan has no special bilateral
trade concessions that can be with-
drawn, he stressed.
The only US trade concession that
Pakistan currently has is the decades-
old multilateral Generalised System
of Preferences (GSP). The US GSP is
relevant marginally, as Pakistans
major exports textile and leather
are not included in the scheme, he
said, adding that Pakistan mostly
trades with US on MFN tariffs.
In the year 2015, as per US statis-
tics, Pakistan exports to US totalled
$3.7 billion, out of which only $179
million (5pc) were under GSP. No
statements have been issued on GSP
as yet but it is strongly supported by
US importers and a lobby of hundred-
plus countries that benefit from it,
the minister said.
The GSP status of 127 countries,
including Pakistan, was suspended by
US Congress after the expiry of the
programme on July 31, 2013. However,
the GSP has been renewed through
Dec 31, 2017, and will be effective ret-
rospectively between Aug 1, 2013 and
July 28, 2015.
However, it is not clear whether the
scheme will be extended beyond 2017.
Under the GSP, Pakistan can export
more than 3,500 items to the US mar-
ket without paying any duties on
them.
Many of Pakistans goods are eligi-
Khurram Dastgir Khan
ble for GSP duty-free, including most
manufactured items, inputs used in
manufacturing, jewellery, carpets,
certain agricultural products, many
types of chemicals, minerals and
marble. However, the products not
eligible for GSP include most of tex-
tiles and apparel, watches, footwear,
handbags, luggage, and leather
products.
The minister said that the US with-
drawal from TPP has been a positive
development for Pakistan as it has
eliminated a potential threat for
Pakistans textile exports. In case the
US moves for tariff hikes and stronger
regulatory enforcements against
countries where it has large trade defi-
cit, this will create opportunities for
their competitors in the US market, he
further said.
Statements by the Trump adminis-
tration on Pakistan so far relate more
to security concerns. The ministries
of Commerce and Foreign Affairs col-
laborate in monitoring the Pak-US
security relationship, as it serves as a
prism for bilateral economic rela-
tions, the minister said. We will
engage principal trade officials as
soon as they take office, and our
US-based trade officers are preparing
their briefs for the initial outreach,
Khan concluded.
Trump in general and eco-sociopolitical decision for Foreign investment in Pakistans capital market
SINCE his election as president of the only super- Pakistan in particular could lead to short-term has been significant from the US-based funds and
power, Donald Trump has been awkwardly playing impact on Pakistan economy. some of them are the worlds largest and have been
the Don Quixote de la Mancha role. He has been Pakistan has been running a positive trade bal- holding big stakes in the top-15 Pakistan stocks (by
swaggering his sword around. It has horrified not ance of $2.6bn with US which has also been a sig- market capitalisation) which is expected to be
only his foes but also friends. nificant contributor of aid and a major contributor increased significantly once Pakistan is reclassified
Threatening too many countries at the same time, in terms of foreign investment FDI and FPI from into the MSCI Emerging Markets category in May,
the Republican president already finds himself on the US accounting to about 32pc on average in the affirmed Schehzad.
the wrong side of history. The man made proud proc- last four years. Remittances from the US also are He pointed out that the US share in portfolio
lamations that he later had to retract. about 14pc of the total. investment has been over 55pc of the total FIPI. But
Economists, industrialists and analysts in CEO of Insight Securities Zubair Ghulam Hussain there is a caveat. Since foreign institutional players
Pakistan were thrown into panic after Trump said that a travel ban, if imposed, would hurt the investment decisions are driven on the basis of risk-
announced travel ban on seven Muslim countries. biggest exporting sectors of the country: Textiles reward, in case of any adverse decision by the
Pakistan was not in the loop, but Trump hinted that and IT. Out of the countrys aggregate exports of Trump administration, there could be a very short-
the country was under the microscope. around $25bn, slightly more than a half constitute term impact on Pakistan equity market.
The danger, though averted for the time being, textile exports and 25pc of that, amounting roughly Investors decision is forever based on invest-
of a travel ban had the trappings of economic catas- to $3bn, goes to US markets. Travel advisory ban ments risk/reward rationale. For instance, some of
trophe, which would have translated in stock melt- would prevent exporters to meet the buyers in US the largest American institutional players do invest
down and loss of fortunes for investors, said a vet- markets, Zubair said. in Russia and even Iran.
eran stock market player. But many others disputed IMPACT ON EQUITY MARKET: On Wall Street, Since Pakistan offers double-digit earnings
or diluted that impact, albeit admitting that the all three major indexes S&P 500, Dow Jones growth by the listed corporates with gradual policy-
negative economic repercussions could scarcely be Industrial Average and Nasdaq Composite are at level reforms, the US companies and investors dash
totally ruled out. record high on growing optimism that Trump would to the door on the wish of Trump administration,
Chief Commercial Officer at JS Global Khurram cut corporate taxes. Investors at the PSX were, how- will not make much investment sense and can be
Schehzad stated that since US has so far been an ever, unsure of the prospects. They thought that it ruled out, said a fund manager.
Opinion divided in Punjab
By Nasir Jamal protectionist approach. the desired results, we dont have to erode whatever political influence it
Economic and business relation- worry about Trumps policies or his still enjoys on Islamabad, a former
ships have never been a cornerstone treatment of some Muslim nations, president of the Lahore Chamber of
SO far, Pakistan has mostly of the bilateral ties between he insisted, refusing to lend his name Commerce and Industry said, refusing
remained off the new US administra- Islamabad and Washington, argued to his thoughts. to be named for personal reasons.
tions radar. But it has only been a CEO of a major textile company that Some even took comfort in the fact He was of the view that China was
month. How long? The question is sells most of its products to American that the Republican president had fast substituting America as the larg-
keeping on their toes people related to firms. spoken quite effusively about est foreign investor in Pakistan and
economy, business and exports. In fact, our economic relationship Pakistan and its leadership when becoming its biggest trading partner
Interestingly, not many Punjab-based with the US has always been a byprod- Prime Minister Nawaz Sharif had tel- under the $55bn CPEC. The comple-
businessmen are bothered about the uct of Americas strategic and mili- ephoned him to congratulate on his tion of the corridor has the potential
potential fallout of a possible American tary interests in Pakistan and the victory. to turn Pakistan into a regional trad-
policy change towards Pakistan. Many region. As long as these interests We arent like any other (Muslim) ing hub and connect its exports with
of the businesspeople Dawn spoke with remain part of the US foreign policy country whose citizens have been new markets. But the government will
brushed off any negative impact of US objectives and they continue to get barred from entering the US, asserted have to tweak its policies here and
a senior executive of a major commer- there to boost domestic investments in
cial bank. the export-oriented industries, he
Why the turnaround in US policy The Americans realise this and
are aware of our strategic importance
added.
However, there are businessmen
in this region, and will keep away who think the Trump policies could
from drastic decisions. The banker indirectly, if not directly, hit
actually feels very much encour- Pakistans economy.
Clip the influence of others in evolving a aged by Trumps willingness to What if his protectionist and anti-
multi-polar world. mediate between Islamabad and Muslim policies weakened the fragile
New Delhi. global economy? Another global
Appease the anti-establishment sentiments. Some insist that Pakistans reliance recession will hit Pakistans exports
Trade social gains for economic promises. on the US for investment and trade has hard, slow down investments
already been on the decline. How low including from China and lead to
Reverse the progress of liberal ideas. can Pakistans economic and business job losses.
Secure more jobs in US at any cost. relationships with the US further sink?
In the worst-case scenario, Trump will
Lets pray President Trump
doesnt implement the agenda of
Play on US citizens base instincts to broaden curb immigration from Pakistan, cut Candidate Trump, the chairman of a
aid and put restrictions on future major business group with interests in
support. American investments here. But he textiles, cement and other industries
will not go to that extent because it will concluded.
DAWN Sunday February 19, 2017 B U S I N ES S 11

Business on a tightrope
By Kazim Alam anticipation, said Khan, who worked in Ohio-based P&G
for three decades and led Gillette Pakistan for more than
seven years.
AMERICAN businesses operating in Muslim-majority Member-companies of the ABC and Overseas Investors
countries seem to be just one tweet away from ruin, thanks Chamber of Commerce and Industry (OICCI) are appre-
to frequent Twitter tantrums and country-specific execu- hensive, he said. Building walls and imposing import
tive orders by President Trump. duties dont send a good message to the rest of the world,
It may only be a matter of time before deep-rooted anti- he said.
Americanism manifests itself in passionate calls for boy- According to Bilal Khan, a senior economist at Standard
cotting US products and services should the new US admin- Chartered Pakistan, the prospect of a large-scale boycott of
istration continue to antagonise international trade part- US products and services in the event of a travel ban on
ners. For example, a late-night twitterstorm by President Pakistanis remains highly unlikely.
Trump denigrating Pakistan can spell disaster for dozens OICCI Secretary-General Abdul Aleem believes the
of American companies operating in the country. hype being built around the idea of global American busi-
So how frightened are American businesses in Pakistan nesses taking a hit because of President Trumps policies is
these days? Nobody knows because they remain tight- unfounded. Were not at a stage where Pakistanis start Protesters gather at the Los Angeles International
lipped. The American Business Council of Pakistan (ABC), boycotting American products, said Aleem whose organi- Airports Tom Bradley terminal to demonstrate against
a 67-member representative body of large US companies sation has 31 member-companies of American origin. President Trumps executive order effectively banning
operating locally, is avoiding any brush with media. None of There has been no noticeable change in direct investment citizens from seven Muslim-majority countries.AFP
its 11 office-bearers were available to comment on the issue, from the US as a result of Trumps executive orders, Aleem

according to ABC Secretary-General Amna Daudi.
Speaking to Dawn, former ABC president Saad
Amanullah Khan said big American businesses are
deeply concerned about the direction the United States is
taking under the new administration. Theres been no
policy change yet. But the whole atmosphere here is of
If wishes were
said. It is business as usual as far as imports are concerned,
he added. Pakistan is not Mexico. Their decision to
exclude Pakistan from the ban list must have been well-
thought-out, he said.

IT has nothing horses...

to lose
By Humair Ishtiaq

AS the clich goes, if wishes were horses, beggars

By Shahab Nafees
THE uncertainty that seems to have gripped the
world at large has had no impact on the local IT
industry. Its not because they have found a method
in Trumps madness, but because the sector has lit-
tle at stake, they say.
No US tech company has a development centre
here. So Trump or no Trump, therell be hardly
any impact on us, said a Pakistan Software
Export Board (PSEB) official who declined to be
identified.
The countries whose IT workers could be
directly affected by radical shifts in US long-
standing policy are those where American compa-
nies have outsourced their jobs and set up offshore
development centres, he said.
India, for example, should be worrying if Trump
gets serious about his buy-American, hire-Ameri-
can dream, the official added.
I dont think our IT exports are going to take a
hit. Frankly, we are not directly relevant to this
situation, an official at Cisco Systems told Dawn.
would ride. Though it was not coined for or about
Pakistanis, we would all be riding our way to the prom-
ised land in a world which, to use a modern-day clich,
stands Trumped.
The sentiment was led by Imran Khan who went pub-
lic with this wonderful thought that Pakistan would be a
direct beneficiary of anything and everything that the
American president might end up doing against us.
People would stop looking around for help and start look-
ing inwards, the PTI supremo believed.
The words made a lot of sense, but, as it appears, only
in the world of low-value political rhetoric. As far as the
common man is concerned, he seems to have come of
age. Dr Syed Shah Talha Iqbal, a physician running his
own practice in a middle-class area, represents the voice
of many when he points out that regardless of what
Donald Trump does or doesnt do, Pakistan (read, lead-
ership) is not looking inwards, but eastwards ... to China.
Punjabs farmers return home after receiving 50-kilogram sacks of wheat seed, fertiliser, and vegetable seed as part of Self-reliance is not even a target, he insists.
USAIDs $62 million post-flood wheat distribution programme. It was SEATO and CENTO back in the Cold War
period; today it is CPEC. A change in nomenclature. A
change in geographical proximity. But thats it. The
Understandable murmurs in the dependence is very much there. We need a messiah in
almost all aspects of life from personal to national. If
there is none, we create one. China is just one. Tough

Besides, I think its too early to give any definitive
view, he said, stressing that it takes six to eight
months to exactly know what an incoming govern-
ment is trying to achieve.
The manufacturing sector, he said, may be the
victim, but not the tech industry. The IT sector is a
little amorphous. You cannot confine it to a bound-
ary, he said.
Shakir Husain, CEO of Creative Chaos, a
technology, digital and outsourcing services com-
pany, agreed there would be little impact on
Pakistan as the countrys exposure to H-1B visas is
limited.
Moreover, Pakistans software industry is minus-
cule when compared with India, whose IT exports
are near $100 billion.
In contrast, Pakistans exports of tech and IT
services and software, according to PSEB statistics,
stand at around $2.5bn a year at present,
including exports generated by IT companies and
freelancers.
The exports are projected to touch $10bn by
2025, but they must grow by at least 20 per cent
each year to reach that target. Growth in IT exports
was 41pc in 2014-15 and 18pc in the preceding fiscal
year.
Domestic revenue generated through local sales
of software and IT services is around Rs52.5bn
($500 million), hence the total revenue of Pakistans
IT industry exceeds $3bn.
However, data from the State Bank of Pakistan
(SBP) paints a far less rosy picture, showing not all
exports are documented. According to the central
bank, exports of telecommunications, computer,
and information services were only $821m in 2014-
15, which went down to $784m in 2016-17 and
amounted to just 15pc of the countrys overall ser-
vice exports.
Data is a big problem in Pakistan... We
fear data, we are afraid of documentation,
explained Husain.
development sector
By Sumaira Jajja & Faizah Malik
MUM is the word on either side of the
line between the donors and the NGOs.
Spokespersons at the US consulate
refused to comment, advising instead to
visit the White House website regarding
any questions on President Trumps
policies. Likewise, most NGOs indicated
that nothing can be said at the moment
which might have a negative impact on
funding from their US donors.
The Americans did emphasise that
the statement given in response to Prime
Minister Nawaz Sharifs telephone con-
versation last November with the presi-
dent-elect was good and positive. But
the litany of executive orders churned
out by the White House has led to anxi-
ety in the sector.
In total, the US obligated nearly $67
billion to Pakistan between 1951 and
2011. In the 1990s, the funding was
halted and USAID offices were closed.
However, 2009 onwards, aid was
resumed after the US Congress approved
the Enhanced Partnership for Pakistan
Act (Kerry-Lugar-Berman bill) which
authorised a tripling of US economic
and development-related assistance to
Pakistan, or $7.5 billion over five years.
From 2001 onwards, Pakistan has
been given more than $33bn in aid and
military reimbursements by the US.
It is interesting to explore what the
fears are based on.
During the long-winding election cam-
paign, leading voices representing the
local civil society had been outright sup-
porters of Hillary Clinton, which, in turn,
means they were actively and strongly
against Trump. The intense paranoia is
understandable.
We are already facing strict inspec-
tion by agencies which are monitoring our
funding and activities. Given the way
Trump has behaved thus far, many of us
feel that there might be someone monitor-
ing conversations and at some point there
will be repercussions, said a noted civil
rights activist who in the past has been a
beneficiary of State Departments Inter mer adviser to the Ministry of Foreign
national Visitors Leadership Programme.
Similar views were shared by many in
the development sector. Though none
had anything concrete to share, the
stress on their faces said much more
than their words.
An aid consultant based in Islamabad
provided a bit of context. The develop-
ment sector is very competitive and par-
anoid. The paranoia is so intense that
many pro-Hillary activists feel anything
they say or tweet might be taken out of
context by competitors here, with the
screenshot posted to the Trump admin-
istration which may lead to a funding
crunch, said the consultant.
But there are those who stress that the
fears are unfounded. Pakistan is too
important to be ignored, said a high-
ranking official of an NGO which has
been a recipient of US and EU funding.
As much as the report by Hudson
Institute suggests that Trump should
curb aid to enforce certain conditions,
nowhere has the current administration
given any indication that it will act on it.
Though it does make for viral content, it
is just a rehash of what needs to be said in
the US to keep getting funds in DC, said
the official with an Army background.
Pakistan is thriving. On the bright
side, there is always the option of strik-
ing it out with China or Russia.
Mosharraf Zaidi, a columnist and for-
money have been returning for long without investing
Affairs, UN, and USAID, said a lot of
people in the development sector dont
understand global politics The west-
ern countries are committed to spend-
ing money on development. There are
UN, OECD commitments and it is not
easy to get away from these. Else it
would have happened a long time ago.
Having said that, in the long term, I
think it is very healthy for Pakistan to
have less aid so that we may do away
with dependence, he said.
Over the past ten years or so, donor
influence has decreased in countries
including China, Turkey, Indonesia and
India. They have done well on their own
and so can we, he stressed.
words.
But that is what many believe. In fact, some are even
more sceptical. Being out of the frying pan may well be
a lovely thought, but the possibility of being into the fire
is dreadful, warns Mohammad Ismail, a small-time
entrepreneur of sorts who wonders if China would buy,
say, our textiles if the US refuses to.
Banker Haroon Ahmed takes the thought process for-
ward by talking about the financial and human capital
that the country might gain in the shape of remittances
and expatriates feeling isolated or threatened in
Trumps America and deciding to move back at least for
a while.
This might actually happen, but what does the coun-
try stand to get out of it. The remittances will definitely
boost the reserves but in turn the money will end up cre-
ating bubbles in the real estate sector, for instance
which will help a few at the cost of many. Besides, there
have always been people interested in returning to the
country for one reason or the other, but almost all of
them do take a return flight sooner or later.
Our society has always struggled to absorb compe-
tence or commitment or any such thing. People with
because the procedures are cumbersome and corrupt.
Professionals and academicians have been returning
disillusioned for lack of opportunities. Why will it be any
different this time?
There is no dearth of families in Pakistan that have
someone based in the United States as part of the
Pakistani diaspora, and that brings us to the level of
uncertainty that families here are facing. As is true in
most uncertain situations, there are some ideas doing
the rounds that are laughable on the face of it.
Talking of the tussle between Trump and the courts,
many believe that there might well be a mini-9/11 on
the way that might sweep the floor for the president. And
if that doesnt happen, Trump may well be the next
Kennedy.
Perfectly preposterous, one might say. But that is how
public perception stands in a world Trumped!

Textile and clothing sector in Fear may erode credibility,

an upbeat mood
By Parvaiz Ishfaq Rana
INDUSTRY and business leaders are generally optimistic about
the future of trade relations with the US, especially because there are
no such preferential trade arrangements in place that may go away in
the wake of protectionist policies being framed by the Trump-led US.
could well be some problems related to travelling to the US.
Former chairman of All Pakistan Textile Mills Association (Aptma)
Yasin Siddiqui said there could be negative or positive impact on
Pakistans trade relation with US depending upon how the
new administration frames trade policies. There may be a new era of
liberalism or there would be chaotic conditions the world over,
he added.
argue bankers
By Shahid Iqbal the change in the White House, all major cur-
rencies had lost weight against the greenback.
The dollar may gain against the rupee in the
THOUGH banks and currency markets face interbank market, but for State Banks interven-
no fear from the change in the White House, tion which, he said, was an artificial value.
they do concede that decisions and incidents are
taking place at a pace which is keeping them
alert. The travel ban did disturb them, but the

Why the world is

Federation of Pakistan Chambers of Commerce and Industry
(FPCCI) President Zubair Tufail categorically stated that
since Pakistani products enter the country purely on the basis of
market strength, therefore, there was no question of any negative
development.
Why would anyone like to shift or divert imports when they are
getting quality goods at a competitive price from Pakistan, he won-
dered.
I feel Pakistani exports to US would actually increase in the com-
ing days, he maintained. Interestingly, he did apprehend that there
With Nafta and TPP on the rocks, and the future of World Trade
Organisation being uncertain, imports and exports will be left totally
at the mercy of market forces for which Pakistan is well placed as far
as trade with US is concerned, argued Siddiqui.
In 2015-16, he continued, Pakistans total exports to US stood at
$3.5bn which came to around 16.84pc of total Pakistani exports. The
textile exports to US were at $2.9bn in the same year.
If you look at these figures, 23.36pc of total textile exports worth
$12.456bn go to the US. And this happens without any preferential
treatment. There is nothing to fear, concluded Siddiqui.
court action calmed them down, they say.
Why fear? There is no negative sign from the
US. Any talk of misplaced fear may actually
damage our credibility, warned a senior
banker. However, generally speaking, bankers on edge
avoided discussing concerns arising out of a pos-
sible action against Muslim countries. All they
stressed was the fact that banks in Pakistan
were not facing any hindrance.
Pakistani banks, they said, were never charged
Policies are anchored
of money-laundering though the country had to
face tough vigilance from global agencies. There in the past more than

The reality of realty

By Muhammad Kashif
REALTORS do not expect any surge in
property investments in the near future by
overseas Pakistanis, especially from those
living in the US.
Property dealers say the countrys real
estate sector has not been receiving any
higher inflows of investment nor enquiries
from Pakistani-Americans because none of
the recent actions have had any direct fallout
on Pakistanis. In short, the post-9/11
bubble is not expected to happen again, say
the realtors.
Yes, the Pakistani community is con-
cerned, but they are not in a panic or plan-
ning to move back, a Pakistani journalist
working in the US for almost two decades
said. An independent US judicial system has
reinforced confidence of the Pakistan com-
munity, he added.
Abdul Wahab Parekh of Parekh Estate
Clifton agreed, stressing that the property
market across the country was maintaining a
status quo. Pakistani-Americans have not
been facing any problems in travelling to and
from the US, so they havent shown
any extraordinary interest in the property
market.
However, Association of Builders and
Developers Chairman Mohsin Akbar
Sheikhani differed. Having recently
returned from a visit to the US, he said his
Pakistani friends had definitely started
thinking of having real estate assets back
home and for that they are exploring ways
because in the US there are certain restric-
tions on large foreign transfers through
banking channels.
Mian Bilal Hanif, Chief Executive of
Estate Heights, which operates in Punjab
and Islamabad and deals mainly in gated
housing societies, observed that despite the
rather low comfort level of Pakistani-
Americans, not many have started liquefying
their assets abroad. Its a wait-and-watch
time for them, he said, adding that govern-
ment actions in recent times in terms of regu-
lating the real estate market would also be a
factor in this regard.
Overseas investors closely monitor
developments in the real estate market. The
government should regulate the sector in a
gradual manner rather than fixing all
ills in one-go which caused flight of capital to
Dubai and Malaysia and other countries, he
added.
The impression that US-based Pakistanis
are aggressively buying houses, flats and
plots through their relatives is not correct
because the market has not fully recovered
from the shocks it received in recent months,
he added.
According to him, gated housing societies
developed by a few big names will be
major beneficiary of prospective invest-
ments by Pakistani-Americans whenever
that happens.
were issues with just one bank and it is no more on
the countrys banking list. The currency dealers
also shared the bankers sentiment.
the future.
Talking about the recent decline in remit-
tances from the US, the bankers said it was an Unpredictability.
extension of the trend that started a couple of
years ago. The remittances declined by 9pc in
the first seven months of the current fiscal year.
Lack of respect for the
The US happens to be the third-largest source of
remittances for Pakistan. Bankers said if any- rule of law.
thing goes wrong in relations with the US,
exports, not remittances, will be the first to take
the hit.
Fanning the
Pakistanis working in US may have their
fears, but we dont expect any major change like religious divide.
it happened in the aftermath of 9/11, said Atif
Ahmed, a banker dealing with remittances and
currency exchange. However, he pointed out
Hurting globalisation.
that any sanction on Pakistan could freeze the
countrys foreign dealings since banks keep Diminishing the value
most of their dollars in their foreign branches,
while the State Bank invests most of its reserves
in the US. But we think it will never happen,
of diplomacy.
he hastened to add.
The currency dealers, on the other hand, No respect for nature
found the current scenario positive for the dol-
lar as the currency has gained against the euro
and the British pound. Forex Association of
and media.
Pakistan President Malik Bostan said that since
12 BUSINESS DAWN Sunday February 19, 2017

Trumps unsettling decisions

A rundown of major decisions
churned out from the White House
since President Trump assumed office.
Combating criminal organisations
The order is intended to thwart
criminal organisations, including
criminal gangs, cartels, racketeering
organisations, and other groups
engaged in illicit activities. It directs
law enforcement to apprehend and
prosecute citizens, and deport non-
citizens involved in criminal activities.
Reducing crime
The order intended to reduce violent
crime in the US, and comprehen-
sively address illegal immigration,
drug trafficking, and violent crime.
Protecting law enforcement
The order seeks to create new laws
that will protect law enforcement, and
increase the penalties for crimes com-
mitted against them.
Reviewing Wall Street regulations
Trump signed two actions on Friday
that could end up rewriting regula-
tions in the financial industry that
Obama and Congress put in place after
the 2008 financial crisis.
Reviewing the fiduciary duty rule
The memorandum directs the
Labour Secretary to review the fidu-
ciary rule another Obama-era law
intended to protect Americans retire-
ment money from conflicted advice
from financial advisers that was sched-
uled to go into effect in April.
For every new regulation proposed,
repeal two existing ones
It also caps the spending on new
regulations for 2017 at $0.
American Heart Month
This ceremonial proclamation
invited Americans to wear red on
Friday (Feb 3) for National Wear Red
Day The goal was to remember those
who have died from heart disease and
to improve its prevention, detection,
and treatment.
Drain the swamp
The order requires appointees to
every executive agency to sign an eth-
ics pledge saying they will never lobby
a foreign government and that they
wont do any other lobbying for five
years after they leave government. It
loosened some ethics restrictions that
Obama put in place.
Reorganising the national and
Homeland Security Councils
Trump removed the nations top
military and intelligence advisers and
appointed Trumps chief strategist,
Steve Bannon, as a regular attendee,
and disinvited the chairman of the
Joint Chiefs of Staff and the Director
Immigration ban
In Trumps most controversial exec-
utive action yet, he temporarily barred
people from majority-Muslim Iran,
Iraq, Libya, Somalia, Sudan, and
Yemen from entering the country for
90 days, and Syrians from entering
until he decides otherwise.
Rebuilding the military
This action directed Secretary of
Defense James Mattis to conduct a
readiness review of the US
military and Ballistic Missile
Defense System, and submit his rec-
ommendations to rebuild the armed
forces.
National School Choice Week
Trump proclaimed January 22
through January 28, 2017 as National
School Choice Week. The programmes
weaken public schools and fund pri-
vate schools at taxpayers expense.
Build the wall
Trump outlined his intentions to
build a wall along the US border with
Mexico, one of his main campaign
promises. The order also directs the
immediate detainment and deporta-
tion of illegal immigrants.
Cutting funding for sanctuary cities
Trump called sanctuary cities to
comply with federal immigration law
or have their federal funding pulled.
Expediting environmental review for
infrastructure projects
The order allows governors or heads
of federal agencies to request an infra-
structure project be considered high-
priority so it can be netted quickly.
Approving pipelines
Trump signed three separate memo-
randa set to expand oil pipelines in the
of National Intelligence where their phrase radical Islamic terrorism United States. The first two approve
presence was not necessary. Trump directed his administration construction of the Dakota Access
to develop a comprehensive plan Pipeline and the Keystone XL
Defeating ISIS to defeat ISIS drafted within Pipeline, and the third requires all
Making a point to use the 30 days. pipeline materials be built in the US.
Reduce regulations for US manufac-
turing
Trump directed his Secretary of
Commerce to review how federal regu-
lations affect US manufacturers, with
the goal of figuring out how to reduce
them as much as possible.
Reinstating the Mexico City policy
The move reinstated a global gag
rule that bans American non-govern-
mental organisations working abroad
from discussing abortion.
Hiring Freeze
Froze all hiring in the executive
branch excluding the military,
directing no vacancies be filled, in an
effort to cut government spending
and bloat.
Out of the TPP
This action signaled Trumps intent
to withdraw from the Trans
Pacific Partnership, a trade deal that
would lower tariffs for 12 countries
around the Pacific Rim, including
Japan and Mexico but excluding
China.
Intention to repeal and replace the
Affordable Care Act (Obamacare)
Reinces regulatory freeze
Environmentalists worried if this
could mean Trump is about to undo
many Obamas energy regulations.
Sanctions on Iran
Sanctions imposed on companies
and individuals suspected of involve-
ment in Irans missile programme and
its support for foreign armed groups,
warning there will be more pressure
on Tehran to come.
Tailpiece: In his two terms,
President Barack Obama issued 227
executive orders over 96 months, a
total number at par with recent prede-
cessors, but the lowest per year aver-
age (2.3 per month) in 120 years.
Trump, so far, has signed 11
executive orders.

Oil sector is likely to

absorb early shocks
IN the short run the world oil price may fol-
low its own path as adjustments to the energy
policy reversal in the US are expected to
materialise in two years at the earliest.
Pakistani government is said to be closely
monitoring the oil market forecasts, but does
not believe that political changes in the US
have the potential to rock the global oil price
equilibrium.
Federal Petroleum Minister Shahid Khaqan
Abbasi was prompt in his response. Oil is cur-
rently between $55-60 and forecasted to stay
in this band in the medium term. However, in
the past decade, experts failed to predict price
spikes on the higher or lower side, he said.
Oil prices are affected by a number of sup-
ply/demand, commercial and market specula-
tion factors that are hard to foretell, he added.
The US is a net energy exporter now
through efficiency gains, renewable, shale oil/
gas. Any reduction in demand in US will not
affect global oil price in the medium term, he
concluded.
The early decisions of the current US admin-
istration clearly tilted in favour of fossil fuel
industry, brushing aside concerns of environ-
mentalists and communities.
President Trump reversed Obamas energy
policy that closed environmentally sensitive
areas for drilling. His order to advance
Keystone XL Pipeline and the Dakota Access
Pipeline, and the order to expedite environ-
ment review and approval process and the dis-
cussion over 20% tax on oil import and a tax
relief will encourage oil companies.
Experts, however, rule out an impact of a
change in US policies on oil production or
price over the next two years. They believed
higher compliance by OPEC members to curb
oil output by 1.2 million bpd for the first half of
2017 will boost oil prices. The projected price
band of $50 to $60 in the current year will
remain immune to US policy drift.
The respective managements of all oil
majors in Pakistan were approached but they
declined to say anything on or off the record.
Some experts in the oil sector, however, did
share their views.
Farooq Rehmatullah, a respected name in
the sector, was forthright. Pakistans scale of
dependence is too high. We can ignore global
happenings, but cant dodge the impact of oil
price movement on the countrys precious
reserves, he said.
To contain the vulnerability of the econ-
omy to exogenous price shocks, the focus of
energy policy needs to be on developing indig-
enous resources and improving logistics infra-
structure, he stressed.
Other experts hammered the underper-
formance of OGDCL and PPL despite massive
concessions and exploration rights. The pri-
vate oil companies performance is better by a
big margin. The United Energy dug about 30
wells in the last one year within the small area
in its bound compared to hardly a dozen wells
drilled by state-run companies, said an
expert, seconding Rehmatullahs view.
With the governance on auto mode we are
takers and not makers of deals, said another
expert critical of lack of alertness and absence
of homework on the part of the government to Demonstrators take part in the Womens March in Trafalgar Square, central London following the Inauguration of US President Donald Trump
broker best possible deals for the country and in London, on Jan 21, 2017. The march is being held in solidarity with the Womens March in Washington, and other cities worldwide, advocating
the people.A.S. womens rights and opposing Donald Trumps US presidency.AP

US ideals and the dustbin of history

By Syed Rashid Husain
TORONTO: As business leaders overtake
Washington, ideals are being sent to the dust-
bin of history.
Just a few days back, US President Donald
Trump opted to sign the bill repealing the regu-
lation that required American energy and min-
ing companies to disclose their payments to
foreign countries. The rule, born from the
Dodd-Frank Wall Street Reform and Consumer
Protection Act in 2010, faced a long legal battle
and was not put into place until June 27, 2016.
Earlier in the month, the House Joint
Resolution 41 thus eliminated the regulation
issued by the US Securities and Exchange
Commission (SEC) last June that would have
forced energy and mining industries, involved
in extraction in one form or the other, to report
payments they make to governments abroad
for access to natural resources.
The rule was meant to fight corruption in
resource-rich countries by mandating that
companies on United States stock exchanges
disclose the royalties and other payments that
oil, natural gas, coal and mineral companies
make to governments. The SEC has been of the
view that the regulation helps combat govern-
ment corruption through greater transparency
and accountability.
Republicans and energy companies, how-
ever, have been arguing for long that the regula-
tion added costs and caused an unfair disadvan-
tage on overseas projects.
The administration and congressional allies
have also been saying that the SEC rule
imposes massive, unnecessary costs on United
States oil, natural gas, and mining companies,
putting them at a significant competitive disad-
vantage to foreign companies that do not have
to comply.
Exxon Mobil Corp, whose former CEO Rex
Tillerson is now the Secretary of State, was one
of the most vocal opponents of the rule, along
with other major oil companies. According to
Politico, Tillerson in 2010 personally lobbied
against the provision of Dodd-Frank that led to
the rule during the Obama era.
Siding with the oil industry and casting the
rule as unnecessary and expensive, President
Trump said at the signing ceremony that the
legislation was part of a larger regulatory roll-
back that he and congressional Republicans
were undertaking with the goal of economic
and job recovery.
Later when President Trump asked
Representative Bill Huizenga (Michigan) to
speak about the legislation, the measures lead
sponsor, emphasised: Over (the last) 20 years,
theres been 56,000 rules that have been put in
place, with very little legislative input or over-
sight, and its time that changed.
Yet, the critics are in a rage. After the House
initially opted to repeal the bill, Isabel Munilla
of Oxfam International underlined that the
The US had been at the forefront of the trans-
parency issue, with more than 30 countries fol-
lowing in its footsteps to pass similar legisla-
tion. State-owned companies from Brazil,
China, and Russia are all now required to dis-
close their payments. If the Senate follows suit
in overturning this rule, the US will go from a
leader into a laggard.
Munilla then emphasised: Voting to roll-
back basic transparency rules provides zero
benefit for the public but will instead
allow corrupt elites to continue to stuff their
pockets with oil money and steal from their
citizens
Eric LeCompte, executive director of the
religious development organisation Jubilee
USA, said: In the short term, we lost a tool
that can help track the billions of dollars
lost to corruption and tax evasion in the devel-
oping world. Improving financial transparency
and ending global poverty are two sides of the
same coin.
Major oil companies have been under intense
scrutiny in recent months. Late last year,
Russia sold a 19.5 per cent stake in its giant oil
company Rosneft, but the full identities of
those who bought it are unknown as yet.
Also, ExxonMobil, then led by Tillerson, was
under investigation by Nigerias economic and
financial crimes commission over lucrative oil
rights it secured in 2009 by beating out Chinas
fourth-largest oil producer, despite apparently
underbidding its rival bid by $2.25 billion, the
Guardian revealed last year.
Critics are also pointing out that US oil
majors, Exxon and Chevron arent listed on the
European exchanges. Hence they dont have to
comply with the EU disclosure rules. That may
give them an undue edge over other oil majors
who must report project-level payments.
A new United States is emerging from the
ashes of the November election. And this
United States is too different from the one we
all knew and literally respected for decades.

Russia seeks post-West order as US vows loyalty to allies

MUNICH: Russia Saturday called
for an end to an outdated world order
dominated by the West, even as US
Vice President Mike Pence pledged
Washingtons unwavering commit-
ment to its transatlantic allies in
NATO.
Russian Foreign Minister Sergei
Lavrov laid out a diametrically
opposed global vision and offered
pragmatic ties with the United
States, just hours after Pence vowed
to stand with Europe to rein in a
resurgent Moscow.
I hope that (the world) will choose
a democratic world order a post-
West one in which each country is
defined by its sovereignty, said
Lavrov.
The time when the West called the
shots was over while NATO was a relic
of the Cold War, he said.
In its place, Moscow wanted arela-
tionship with Washington that is
pragmatic with mutual respect and
acknowledgement of our common
responsibility for global stability.
The two countries had never been
in direct conflict, he said, and were
close neighbours across the Baring
Straits.
Moscow has been impatiently wait-
ing for US President Donald Trump to
make good on his pledge to improve
ties which plunged to a post-Cold War
low as Barack Obama slapped on sanc-
tions over the Ukraine crisis and
Russias alleged meddling in Trumps
election.
On the campaign trail, Trump
repeatedly praised Russian President
Vladimir Putin and voiced his will-
ingness to work with him in fighting
terorism.
But in the face of growing heat over
its links to Moscow, Trumps adminis-
tration appears to be backing off the
warmer words used earlier for the for-
mer Cold War foe.
Greatest ally
Exasperated and worried by
Trumps calling into question long-
standing foreign policy assumptions,
European leaders have warned
Washington not to take transatlantic
ties for granted.
On a European roadshow this week,
Trumps lieutenants have sought to
reassure jittery allies that the
administration will hold fast to exist-
ing foreign policies, including main-
taining sanctions on Russia over the
Ukraine crisis.
Hours before Lavrov addressed the
Munich Security Conference, Pence
told the same forum that the United
States will stay loyal to its old friends.
The United States is and will
always be your greatest ally. Be
assured that President Trump and our
people are truly devoted to our trans-
atlantic union, Pence said.
The US would also not relent in
pushing Russia to honour the Minsk
ceasefire accords with Ukraine, he
said.
The United States will continue to
hold Russia accountable, even as we
search for new common ground,
which as you know, President Trump
believes can be found, the vice-
president said.
At NATO headquarters in Brussels
on Thursday, Defence Secretary
James Mattis said Russia must first
prove itself and respect interna-
tional law before there could be any
improvement in relations strained by
Moscows Ukraine intervention and
annexation of Crimea.
Mattis also said the transatlantic
bond was as strong as Ive ever seen
it, and emphasised that America
remained rock solid in its support
of Article 5 NATOs core one for
all, all for one collective defence
pledge.
Likewise, US Secretary of State
Rex Tillerson indicated he would take
a tough line in his dealings with
Russia.
Following his first meeting with
Lavrov in Bonn on Thursday, Tillerson
said the US would cooperate with
Moscow but only when doing so will
benefit the American people.
German Chancellor Angela Merkel,
who has been a key player in mediat-
ing talks between Ukraine and
Russia, said it was regrettable that
Europe had not managed to reach a
stable relationship with Russia over
the last 25 years.
I will not give up on finding a way
for better relations with Russia
despite our different views on many
questions, she said, championing
international cooperation rather than
a policy of isolationism.
In a year in which we see unim-
aginable challenges we can either
work together or retreat to our indi-
vidual roles. I hope that we will find a
common position, she said.AFP