Doing Business in South Asia Pakistan Bangladesh Overview by eqt50313

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									   Doing Business in
      South Asia:
    Pakistan & Bangladesh
           Overview


              Tuesday, November 18, 2008, Houston Hall,
                  UNIVERSITY OF PENNSYLVANIA

                             Presented by


                               Sponsors
The World Trade Center of Greater Philadelphia, South Asia Center of the
University of Pennsylvania & the National Association of Asian American
                             Professionals

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Agenda

n   Country Overview
n   Economic Fundamentals
n   Trade with the US
n   Key Challenges
n   Example
n   Q&A




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n   2005 Goldman Sachs The Next Eleven (or N-11) —
    Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria,
    Pakistan, The Philippines, South Korea, Turkey, and
    Vietnam.
n   Goldman Sachs used macroeconomic stability, political
    maturity, openness of trade and investment policies, and
    the quality of education as criteria. The N-11 paper is a
    follow-up to the bank's 2003 paper on the four emerging
    "BRIC" economies, Brazil, Russia, India, and China.[1]




                                 3
n   DinarStandard™ is a
    business advisory service
    whose purpose is to
    enhance global
    competitiveness of
    businesses in the Muslim
    World by providing              “Saudi Aramco Retains Top
    practical insights and            Spot in DS100 Ranking”


    resources that address
    their unique challenges
    and opportunities.




                                4
Bangladesh
Country Overview


n   Dr. Muhammad Yunus (Nobel Prize-
    winning founder of Bangladesh’s Grameen
    Bank), the man who has converted
    millions of ordinary Bangla women into
    “Bangla heroines” with his unique
    application of micro-credit techniques.

n   Dr. Muhammad Yunus is now the symbol
    of a new brand Bangladesh which is
    attracting tremendous investment interest.
    Grameen's joint venture with Danone, one
    of the leading producers of nutritious food
    in the world, is one such example. The
    basic aim of the joint venture was to
    “improve the diet of rural Bangladeshis —
    especially the children” at a “low price” in
    order to make a “real difference in the lives
    of millions of people”. The joint venture is
    one of the finest targeted-examples of the
    ‘Fortune at the bottom of pyramid’ theory.

                                                    5
Bangladesh
Country Overview


n    Area - comparative: slightly smaller than Iowa

n    Population:          153,546,896 (July 2008 est.)

n    Natural resources: natural gas, arable land, timber, coal

n    Ethnic groups:       Bengali 98%, other 2% (includes tribal groups, non-Bengali
     Muslims) (1998)

n    Religions: Muslim 83%, Hindu 16%, other 1% (1998)

n    Capital: Dhaka

n    Administrative divisions: 6 divisions; Barisal, Chittagong, Dhaka, Khulna, Rajshahi,
     Sylhet

n    Independence:        16 December 1971 (from West Pakistan);


Source: CIA World Fact Book




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Bangladesh
Economic Fundamentals


n    GDP (purchasing power parity):           $208.3 billion (2007 est.)

n    GDP - real growth rate:        6.3% (2007 est.)

n    GDP - per capita (PPP):        $1,400 (2007 est.)

n    GDP - by sector:     agriculture: 19%,industry: 28.7%, services: 52.3% (2007 est.)

n    Exports: $12.45 billion – Commodities; garments, jute and jute goods, leather, frozen
     fish and seafood

n    Exports - partners: US 23.8%, Germany 12.1%, UK 10.1%, France 5% (2007)

n    Imports: $16.67 billion (2007 est.) - Commodities:              machinery and
     equipment, chemicals, iron and steel, textiles, foodstuffs, petroleum products, cement

n    Imports - partners: China 17.6%, India 13.3%, Kuwait 8.2%, Singapore 4.9% (2007)


Source: CIA World Fact Book




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Pakistan
Country Overview

n   Two leading Silicon Valley venture
    capital firms, ePlanet Ventures and
    Draper Fisher Jurvetson (DFJ) -
    funds that helped create companies
    like Hotmail, Skype and Baidu -
    would recently invest in a Pakistani
    Internet company - Naseeb
    Networks.

n   A new $158 million private-equity
    fund, by the JS Group, would close
    on Dec 31st 2007 to invest solely in
    Pakistan.

n   In a year (2007) when the country
    experienced the highest levels of
    political turmoil and security
    breaches, its largest stock exchange,
    the KSE with 670 companies listed
    would be up an impressive 40% and
    that the average dividend yield of its
    stocks would be 6%.
                                             8
Pakistan
Country Overview

n    Area:      Slightly less than twice the size of California

n    Natural resources: land, extensive natural gas reserves, limited petroleum, poor
     quality coal, iron ore, copper, salt, limestone

n    Population:          172,800,048 (July 2008 est.)

n    Ethnic groups:     Punjabi 44.68%, Pashtun (Pathan) 15.42%, Sindhi 14.1%,
     Sariaki 8.38%, Muhagirs 7.57%, Balochi 3.57%, other 6.28%

n    Religions: Muslim 95% (Sunni 75%, Shia 20%), other (includes Christian and
     Hindu) 5%

n    Capital:   Islamabad

n    Administrative divisions:      4 provinces; Balochistan, Federally Administered
     Tribal Areas*, Islamabad Capital Territory**, North-West Frontier Province, Punjab,
     Sindh -- note: the Pakistani-administered portion of the disputed Jammu and
     Kashmir region consists of two administrative entities: Azad Kashmir and Northern
     Areas

n    Independence:        14 August 1947 (from British India)
Source: CIA World Fact Book
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Pakistan
Economic Fundamentals


n    GDP (purchasing power parity): $411.9 billion (2007 est.)

n    GDP - real growth rate: 5.3% (2007 est.)

n    GDP - per capita (PPP): $2,400 (2007 est.)

n    GDP - composition by sector: agriculture: 20.6%, industry: 26.6%, services: 52.8%
     (2007 est.)

n    Exports: $18.12 billion; Commodities: textiles (garments, bed linen, cotton cloth,
     yarn), rice, leather goods, sports goods, chemicals, manufactures, carpets and rugs

n    Exports - partners: US 17.7%, UAE 10.2%, Afghanistan 8.3%, China 5.1%, UK 4.6%
     (2007)

n    Imports: $28.76 billion - Commodities: petroleum, petroleum products, machinery,
     plastics, transportation equipment, edible oils, paper and paperboard, iron and steel,
     tea

n    Imports - partners: China 16.1%, Saudi Arabia 10.8%, UAE 10%, US 5.7%, Kuwait
     4.8%, Japan 4.3% (2007)


Source: CIA World Fact Book                                                              10
Economy Rankings - Ease of Doing Business – World Bank 2009
A set of regulations affecting 10 stages of a business’s life are measured : starting a business,
dealing with construction permits, employing workers, registering property, getting credit, protecting
investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data


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Pakistan & Bangladesh
Key Challenges & Opportunities


n Opportunities: Services; Manufacturing; Trade
n Telecom & IT; Food; Textile; Other..




                                                  12
Pakistan & Bangladesh
Key Challenges & Opportunities


n Bangladesh: Inflation - Bureaucracy
n Pakistan: Inflation – Security
n US Potential Trade Gaps:
    n Major Trade Partners; Major multi national presence; MNC’s Nestle;
       Unilever; Danone; Pepsi; P&G; Phillip Morris -- More than 50-60 mid to
       large sized US based businesses operating in Pakistan
    n “Comfort Zone” of US Businesses; Risk Averse approach makes them
       lag behind Europeans and Japanese in tapping into such markets – Eg.
       Libya; Middle East

    n “Liked but not Embellished”




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Case Study: Synergies Worldwide
n Value-added sourcing services for all forms of
   merchandise classifications. These include apparel,
   fabrics, fashion accessories, footwear, decorative
   accessories, home textiles, and other goods related to
   the fashion and hospitality industries. Services
   encompass the production of merchandise in remote
   locations across the world and the subsequent
   movement of merchandise directly to a selling floor or
   distribution center.
n Major Presence in Pakistan, Bangladesh, India,
   Turkey, China
n $300 million in transacted value annually (2-7% fee)
n See South Asia as a market of Alliances; Natural
   complementariness; Regulatory Differences; Core
   Competencies
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Case Study: US Software Company
n Boston, US Based
n $ 25 mill in annual rev.
n Technology development outsourcing
   from Karachi, Pakistan
n High Satisfaction with delivery;
   Perception challenges; Security
   impediments




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Doing Business in
   South Asia:
Pakistan & Bangladesh
       Overview




               Q&A


                    16

								
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