In the general course of listening to pitches and meeting various startups a curious trend is emerging amongst the funded ones. Especially those who were funded locally by local groups. Whilst I do not want to generalise the phenomenon is one that is growing and clearly took me by surprise.
There are multiple categories of local investors lets define a few types so you are familiar.
Pathan Loan Shark PE(PLS-PE) Meaning the last generation was involved in Loan Sharking, second generation white washed it with some overseas qualifications and degrees, professionally managed Insta and plethora of awards and accolades/re-branding in progress, taking semi-old money and converting it in to the “House of X” “ This Group” “That Group”, these guys never were the 21, but they sure are dicking every one over with their sub 21% loans++)
Returning Allegedly Successful Serial Investor – Pakistani From Abroad (RASSI-PFA). This is about a 5 year old phenomenon give or take. Unverified Overnight Pakistanis who no one knew in Pakistan before they left, who no one really knew after they re-emerged, come to town with 1-2 White Guys, slowly started hosting events, did a few first deals three under 200k around- Boom they arrived. Offshore shell companies galore, likely their source of funds is all Pakistani Money Parked Overseas. (PMPO) . They aren’t the JP Morgan returning types, details are sketchy, most ppl know its local money being funnelled back but since it is some form of funding in the absence of real VC money people will take what ever comes their way. Plus bro they have white guys.
Daddy’s Umm Money Daddy’s Umm Marzi.(DUMDUM). This is a cross over between the above two, young scion comes back with a degree, figures out they have a better deal in PK because daddy has privilege, daddy is typically and industrialist but, in most cases{پیچھے سے امیر}, rich from behind. (RFB). Money comes from textiles, agri, oil, govt concessions, construction, export oriented generational family money. Some political types also in this, best to stay away from those and the ones that have Rawal-P (R) blood line.. Those are also emerging. The core game has been to take as much equity as possible and then go into acqui-slave models. Daddy’s political cover and access to easy regulatory approvals would have one imagine that this variety would have created dominance by now, but the apple has truly fallen far from the tree and the second generation is still pretending to invest with real money and since they have limited insights need daddy’s blessings in the end. They may wear the big boy pants and suits, but the fear of daddy’s chittar makes sure the real decisions come from Abba jis office and his trusted munshis.
A – Usually New Technological Yuppie (AUNTY). This is what one would classify as the AID based Islamabad/DC/London centric crowd. John Perkins in his book Confessions of an Economic Hitman Describes them as “Economic hit men(Not all are men though esp in this category) (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from foreign “aid” organisations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet’s natural resources.” Domestically this follows some part of type 2 above, a seemingly new face shows up on the ground, with “its complicated” on their fb status, a closer look shows that , before they became a VC/fund organiser their LinkedIn goes from community developer of some tier 4 fashion boutique or such or Bank Teller at “first community bank” to Chief Disruptor of this NewHipCo in PK. Source of funding un known. Dinners and bottle service galore.. They engage in quality content production and high-fiving liberals, if you get in their path you get labelled as backward or movli-tech. They continue to aspire a generation of startups in a completely mis-guided fashion.
But I digress, enough explanations, each of these categories and some more; deserve an entire post on their own. But what is worrisome is not who is doing the pretend VC game, it’s how it’s being done.
So local VC type 1-4 above, invests in a PK Pvt limited company. Say 100k USD in PKR, some times not all cash either, in kind or services, or charge the Startup for use office, utilities, legal services, sundry items etc all provided in kind or letting them use their profile as a board member against future considerations.
Typical target companies are where local PRK is spent on the startup (health care, agri, agri tech, services, product and companies building tech for other companies and a host of logo shops + content shops). The founder then is encouraged to open a Singapore Entity by the VC. Up to this point there is no real traction in the business it is largely fuelled by Aids/Grants/Other competitions and typically has some element of social enterprise or is minority led etc.(not always but more times than none). These 1-4 connected types get them free media exposure, access to grants and special monies the common man has no access to in the right circles to create Visibility and an illusion of success sans balance sheet data.
5000$S Later a New Hold Co is setup in Singapore that owns
100% of PK Pvt Limited. In that NewCo, the investor owns their share. The
founder goes to all incoming investors (largely introduced by grant giving organizations
or development funds) and proposes the following:
My seed investor wants out this is not their core; my valuation is now 2x 3x as we have a term sheet they have gotten from a 3rd party(wink wink). You can invest into the Holding Co in Singapore and we can clean out the investor and you can get majority. In-fact we will help you do it, our seed investor has agreed.
My Seed investor is willing to put in another 50k at a new 2x Valuation, but I have an option to buy his share out but for the new valuation, hes happy to stay too. But if You want, you can just invest in Hold Co I will talk to them and will take them out and you can own 100% of what they have up to the point. They are happy to continue, but you see; if they stay, they back my valuation as should you. If you are interested.
My Seed investor is happy to dilute down, you can come in at the original valuation but I had a consulting arrangement with them for which they need to be paid 100k USD, because I had a separate contract with them on this “sorry”. But they added so much value and funded all my travel to these grant competitions and my SanFran visits and insta posts really I have to make them whole.
Unknown to the startup the money coming in from SG into Holdco, is the investor just repatriating previously un-accounted for FX from PK, on the way in, they will register it and then have the option to legally make it all white. Since they own Majority, and the startup has say less than 15% its still cheaper to route the money through this system than other less than kosher means. Plus if the startup works it kills two birds with one stone.
If you haven’t figure it out, the Pakistani investor is
investing in Pakistan, in PKR, the new investment coming into Singapore is
giving them the ability to retain their 100k USD in Cash in Singapore.
Effectively doing a PKR to FX Swap. Who knows if they had originally invested
the 100k equivalent in PK or not, but they are cashing out offshore. None of their share will come back to PK, they
are essentially helping startups to create opportunities to either:
Clean funds offshore if there local funds were
sketchy or undocumented/esp if they provided in kind services at a value of
100k vs actual money
Create a larger upside as their in-kind stuff
cant be measured
Splitting the difference with some founders and finding
a way to both take out the tech and the company and its future investment and
revenues out of PK. Whilst re-patriating some %age back and showing that as FDI
and having it repatriable over time as its registered on the way in.
Trust Desis to find a way to have a value lever on even these startups. 95% of starts Are Not doing this, but the ones that are; are on a glamour ride and winning contests and jet setting actually don’t have business fundamentals. These 4 types of investors are driving them to their own agendas. By the time real investors and real VC money shows up people will be so tired of having being taken advantage of and the startup community will have such a dodgy reputation that people will be afraid. Because the other 95% aren’t really getting the exposure, it’s the so called funded and 1-4 aligned ones that have visibility and so called traction its this 5% that will shade the view for all others. Lets hope that some of the 95% variety get real funding and re write the story the way its supposed to be.
I used 100k USD as an easy example to illustrate the mechanics of the transaction
The more responsibility I gain, Further away I want to run. Life pushes on my shoulders, And it no longer seems like fun. Coleen Brown.
Many have asked what is Digital Pakistan's focus; how can they get involved & help Today, I'm proud to share the underpinnings of the Digital Pakistan program This describes the heart and core of everything we build towards achieving the dream of a Digital and Prosperous Pakistan pic.twitter.com/8TQrbP0CIR
TL:DR Let us start off by defining what this post is not. It is not a critique of any thing besides the content and the context that it was published under and its likely implications. It is also a recognition that you cant make every one happy but you have our respect for going down this path and accepting the Challenge.
This document has varying degrees of focus and at some places no focus at all, I sincerely hope #DigitalPakistan is a collection of action items beyond HashTag wisdom. No denying the history lesson or to recognise the strength of our country, our people and our resilience. What does #DigitalPakistan bring to the table? that we already don’t know? What ministry is this part of? What is the official make up of all the team members of this initiative. There are murmurs of capitalists lingering in the hallways of power whilst this is being done. Is it a policy initiative only? Does the PMO expect Tania to do this alone? She has braved enough initial feedback by her self. Where is her team? Why? When so many SAPMs also not make her one? But beyond the intergovernmental f*ups, lets look at the content.
Know thy constituents.
“Digital Pakistan, a glocal movement”
This document starts off with defining Digital Pakistan as a glocal movement. Glocal, an adjective, by definition, is “reflecting or characterised by both local and global considerations. The term “glocal management” in a sense of “think globally, act locally” is used in the business strategies of companies, in particular, by Japanese companies that are expanding overseas. Heres some history to go with it…The concept comes from the Japanese word dochakuka, which means global localisation. It had referred to the adaptation of farming techniques to local conditions. It became a buzzword when Japanese business adopted it in the 1980s. The word stems from Manfred Lange, head of the German National Global Change Secretariat, who used “glocal” in reference to Heiner Benking’s exhibit: Blackbox Nature: Rubik’s Cube of Ecology at an international science and policy conference.
So when you are putting out a national level policy directive or an initial guidance document it must make sense to the masses and the constituents both in context and content.
We should build what works for us. I can’t imagine mobile phone usage/growth/adoption in Pakistan without prepaid services. If Telcos had tried the postpaid route(and modified global models), many dead carcasses would be on the ground due to indebtedness. Our peculiarities matter. Glocalization is good but lets do this one step at a time with context and a feel for the local market. You cant helicopter in and rescue the ones who already have a life boat, look for the ones that dont.
Lets look Deeper at the content..
(1) Access & Connectivity (2) Digital infrastructure (3) eGovernment (4) Digital Skills & Training and (5) Innovation and Entrepreneurship.
Even prior to and independent of this announcement, nascent conversations and even the usage of the #DigitalPakistan hashtag was prevalent. Many public and private stakeholders exist today that partially overlap with Digital Pakistan. However, an overarching body to help keep “the bigger picture” in mind to cohere messages and calls to action, and ensure that outcomes are aligned with the mission, tends to be missing.
A Document that starts of by defining the #Hashtag DigitalPakistan vs the listed 1 through 5 Areas of the vision, does not give me the comfort that the team putting out this document has a sense of what all the constituents and citizens of the ecosystem want and expect. It seems like a document thats heavy on expat-pleasing vernacular vs substance. Look, I want this to succeed as much as the next person. I have invested time, effort, physical presence in to relocating to Pakistan by actively participating on the ground. But this reality distortion field(document) is not going to help any one the way it stands now. By trying to appease other actual government constituents, this seems like a communication that is white washing the issue and doing diplomacy as opposed to national information infrastructure building. The PMO should not be building consensus within their own ranks at our cost. Not every one is going to be tweeting #goodjob #bestofluck and asking on how to participate in this vision. Some of us are going to ask #whatnext?
As a mission-driven initiative, Digital Pakistan’s focus is primarily on ensuring that desirable outcomes are achieved. Specifically, this means that Digital Pakistan’s success should primarily be measured on whether such outcomes are actually achieved; the concrete implementing body and / or method is secondary.
I read with interest the above items in bold. Let’s take it from the top, is this a vision? is this an initiative? Is it a Program? Where is the Mission? Who is defining the outcomes and achievements or did #DigitalPakistan just concede space to existing state actors, bureaucrats and others to say;
” hey, we want to do good work, it doesn’t matter if your actual ministry or cell or division does the work.” The buck has to stop with some one. So what I’m reading is ,that its ok if the end-details aren’t worked out; what is important is the work starts. Thats not a good starting position. Displacing accountability before doing any thing real is already at the detriment of the people at large.
In some ways, I do agree, that inter departmental politicking will be bad but this document at-least up-to this point does-not define any thing substantive. Besides clearing their air between seemingly hostile intergovernmental constituents I cant get a feel for where this is headed.
A key part of Digital Pakistan is therefore assuming the mantle of custodian for a set of principles and values defining what Digital Pakistanis. By further helping shape and advance the Digital Pakistan narrative, we hope that the plethora of initiatives and widespread energy spent by various stakeholders is channeled productively, in return, making each individual effort more successful.
Key Digital Pakistan Principles
1.#shaamil- Responsible and inclusive access to information and information technologies are a fundamental right. a. Affordable access to any required hardware devices (e.g. low-end smartphones) b. Universal data access (e.g. connectivity in geographically remote areas) c. Affordable data access (e.g. mobile subscription plans) d. As free flow of information as possible
#Shaamil..hmm A) Affordable access to hardware..well this seems to be out here because the govt already reduced tax for feature(ish) phones https://www.phoneworld.com.pk/taxes-on-mobile-phone-import-reduced/ in the first week of Jan. This is a post effect engineered win for #DigitalPakistan. The whole regime on phone taxes is a different issue in-itself that needs better management on control and chori vs taking irrelevant half baked policy decisions on Low end smart phones. You never make a high end play using low end thinking.
C) Again our carriers are doing a good to great job on this, we have some the least expensive data plans in the world. So what does #DigitalPakistan bring to this. *Note, ask any cell phone carrier and they will tell you that between 6pm to 11pm their data utilisation is off the charts. Also ask them what percentage of total data is being used for Youtube. So who are we really helping without having effective policy controls in place for ad-revenue/taxation and incorporation help for the giants? This is a gift that will keep on making other people rich(non-Pakistanis) if not linked to substantive policy decision to course correct.
D) I dont get this, this akin to saying, eat healthy to stay healthy, what does #DigitalPakistan have to do with it?
2.#hunarmand – 21st century skills to reap benefits of technology a. Digital literacy and how to operate e.g. a smartphone b. Skills for digitally enabled jobs (e.g. home-based selling of goods via social commerce)
#ifhashtagswereoutcomes this vision/document would have already won. Nothing wrong with the above, but if operating a smartphone is the hook, whats the kicker? Who will define it, how will it get done? For any one to migrate from operating a phone or point a to b, literacy to skill for digital jobs, we have a long way to go. Home based selling is a good story to sell but social commerce has key infra requirements that are seemingly outside the remit of this group. The postal service has had 300m$ plus of losses, if you want to work on actionable social commerce take that money and build out a distribution network that works. For social commerce to work, basic commerce has to work, tax nets and input items need to be managed, you can not continue to tax the working middle class over and over again. We are facing some of the. worst poverty numbers and highest inflation ever, hashtags arent going to feed any one any time soon.
3.#pehchaan – Simplify interactions between citizens, government and the broader economy. a. Development of a “Pakistan Stack” as technology and data infrastructure connecting these different spheres. b. Using digital technologies for easier and more transparent public expenditures, tax collection as well as prevention of tax evasion c. Driving towards the ‘Ask only once’ principle i.e. aim to ensure that citizens, institutions, and companies only have to provide certain standard information to the authorities and administrations once
I can get behind this for sure. Digital Identity for better taxation, transparent services and govt/data/infra Rails, Spot on. But again this is old wine in new bottles, nothing has been done by transforming quick wins like OneLink etc to be coupled with Nadra etc to offer these services. I understand criticising this is easy, but we have quick wins possible, Instead of focusing on political wins like reducing dumb phone taxes alone, focus on other top priority areas like building an ecosystem for feature phone development incentives for local software companies.. Tax theft is easy to prevent, beyond intentions, link all banks to id cards and all bank data to a national tax system that is managed electronically, that blocks the tax evaders electric supply, their gas, their ability to have a cell phone and their kids to go to school.
4#digitaljugarus – An inclusive digital revolution must be an economic boon for all, a. Fostering mass employment creation through digital platforms like marketplaces, freelancing communities or ride hailing companies. b. Creating an appropriate legal, financial and regulatory environment for technology startups to flourish. c. Be the conduit for linking local digital skills supply with global demand in areas with high global demand like machine learning or python.
For all the right things this basic document is trying to organise(admittedly this is better than any thing the IT Ministry ever came up with) it is marginalising the key contributor. The Community. This kind of imported terminology vernacular is completely out of place & border line embarrassing. It is also completely out of touch from the reality of free lancers young and old and those who want to evolve from truly basic operations into a SMEs, SMBs and Operate under a formal structure.
A) The government doesn’t need to get into the market place game/business, there are plenty out there and there is roughly between 1-3bn$ worth of free lance GreenBacks that are locked out of our eco-system, this money is parked offshore not because every ones a crook but due to lack of systems/payment processes in place. These guys are not Jugarus, how dare you? They are active contributing members of society who were let down by every one, who by them selves figured out to monetize their skill digitally, before there was a #digitalpakistan.
B)This item is the need of the hour, many cheers for having this in this 2 pager, but what is the 90 day action item that will make sure this happens? You realise all the companies your(various ministers) want to tax overseas are being gated from local presence because no one gets their legal framework ask. Not saying you make it to suit Google alone but there are many others who would jump on the opportunity.
C)The supply that is already there is operating in the free market and making dollars through freelancing, unless you up-skill the masses, there is no new value or economic input that you will impact by being a conduit of any kind. ML and Python take some time to scale, viz a vi training, there is investment $$s that need to go into it too. Google loves Python, if we fix the regulatory items, we can surely get some love from Mountain View? Maybe even others. But why limit to what you know get larger stake holder involvement, figure out what freelancers are bringing in the most moola and then adapt. Why prescribe items where there is limited hw, given one model already works. Scale that first. #askforhelp
Key Areas of Work
(One of the most fascinating aspects of the digital revolution is the vast scope and diversity of how it Impacts everyday life. As such, Digital Pakistan’s work and internal capabilities & capacities to advance the mission are multifaceted. In general, the bulk of the work can be grouped in five broad categories:
1.Channeling of and representing the Digital Pakistan Movement a. Ongoing communication and evolution of the Digital Pakistan Narrative b. Defining (annual) themes (e.g. jobs, education, government services) that can help channel the majority of efforts by Digital Pakistan Foundation but also other stakeholders towards focus areas
2.Information dissemination (e.g. enable other parties to make better decisions and / or Identify potentials). This includes: a. content creation for layman and stakeholders (e.g. videos, white-papers, text, illustrations) b. Train the trainer courses c. Basic training courses (< 40h training)
3.Policy advancement or intervention (e.g. creating dialogue, lobbying) a. Identifying key aspects of policy that can help accelerate adoption in Digital Pakistan’s focus areas (i.e. “What should be done that isn’t being done”). b. Advising on existing or proposed policies that may stunt the digitization agenda (i.e. “What shouldn’t be done that is being done”)
4.Technology development. This includes: a. “Quick Proof-Of-Concepts” to show potential real-world impact of certain ideas with the goal of being (eventually) replaced with permanent more scalable solutions b. “Cornerstone technology development” that is built and / or operated by Digital Pakistan or potentially contributed to the Government of Pakistan for operations and has long-term strategic value to the overall mission
5.Building bridges and facilitating dialogue between citizens, government, local industry, and international players
1- If all we are worried about is the narrative then we shouldn’t be in this game. The word Digital Pakistan shows up in this 2 pager 17times. Have we run out of substance at launch? This is looking like an echo chamber to provide self assurance that some thing is being done and a quality angrezi document was produced. More than 50% of your intended audience cant make head or tail of this. Further when you translate this from English to Urdu, it will actually loose most of its opacity. As a first/launch document(you used an image and talk about transparency no text version made public), I cant even define what this is, is it a policy framework, is it a document to tell the “awam” what is coming? Is it there to show some thing is being done? Most of the items are dated, given past efforts have also come without action plans, time lines and ownership the awam will loose patience in a short time. This document it self says, dont worry about who does the job? What kind of a cop-out is that? You havent even started yet.
2- Dont get how information dissemination alone, translates to helping others make better decisions. What lay person uses white papers ? What does train the trainer have to do with the context of this point. Perhaps I am lost, but this is gibberish to cover a checklist of things that are said publicly that if googled make the general awam happy with some thing being done may be a good PR stunt but add no value to the bottom line.
3- If you are in government and you have to lobby to tell people what to do or what not to do, that tells me you are not empowered (yet). We dont need any more policies, in-fact we need less regulation any one who thinks and or wants to add an other layer of policy direction will meet with challenges far larger than their existing comprehension on the subject. Advisors have already destroyed this country beyond repair, Not saying this will meet the same fate, but we need an execution mind set.
4- In plain speak you want to do MVPs and show things work, you also want to play a role in enabling tech that brings out long term changes. Great. But you will have to compete with NITB who are launching Islamabad specific app after app, and other state run orgs, who spend public money on accelerators and such. Also an IT Ministry that has no minister. So yet again the “awam” will pay the price of complete anarchy at the govt level. Zero planning, loose threads and a prayer. (This is one of the vaguest statement in the entire document).
5- P@sha does a decent job, other trade/functional bodies do too. Strengthen what you have, learn from what others have organically built in this country. Within their repertoire they also gave you the first incubator, that actually kick started the ecosystem and brought Pakistan to the attention of major other players who didn’t get involved before that. The Nest i/o with full admission of my bias, launched 021 disrupt, where you arguably had your first mass address to the community too. Strengthen those bonds, help facilitate that, get rid of PSEBs of the world and build out stronger support bodies. Less is more esp when it comes to regulation and growth. We are rooting for you on this. You have shown by your actions that you are looking to build an inclusive ecosystem. But this document does a dis-service to an otherwise stellar vision shared earlier publicly.
“You have to take the bull by the horns, you have to have a clear articulate strategy for each milestone”
Much like your selves I for sure don’t have the answers, but I didn’t sign up for public scrutiny by being a govt employee, no less as some one who is an active participant in the ecosystem, what Id like to see are items around:
1) A Concrete Payments Strategy
2) A Software Export Strategy & Plan Including Tax Incentives
3) A Legal Framework for foreign tech company incorporation
4) FX regulation on incoming freelancer payments and ability to hold up-to 50% of incoming USD for onward USD Expenses (hosting/subscriptions/tools etc)
5) A ban on predatory loans being made via apps locally (30-70% interest)
6) A regulatory control over what Jazz/EasyPaisa and others charge as fees for transfers (SBP needs to come into action here).
7) Single CNIC based Free lancer registration with a FreeLancer Bank Type so incoming funds are not held by banks from these freelancers and they are not made to feel like criminals when they go to get their money, they should be made heroes vs being given shitty treasury rates.
8) A legal framework to regulate predatory apps and services like Bigo live who could potentially be responsible for FATF style bans if left unchecked. (Pro Tip, call the telco payment companies and ask how much of Bigo Live/similar apps, enabled transactions are passing through their system.)
9)A policy on Nano-Lending (we are solving the wrong payments problem, we need to solve the nano-lending and the fiat currency change problem)
10) Create a policy of equals with China on e-commerce and cross border taxation, without controls, the willing and un-willing will import the hell out of drop shipping systems and use local postal delivery to burn FX on importing items. Regulate to promote local growth. Dont confuse it with enabling people to sell online. This is causing a trade deficit.
There is a whole lot more, but this is a good start, work on national info and payment rails, similarly tax rails. We need less lip service and documents and more actions. Most of the items here are a great first pass, but missing substance and the document feels like its talking down to the tech constituents of this country. Do not under estimate the people who are contributing hard $s to the economy, you can learn from them but don’t learn at their expense. We need actions now, because the ones we elected sadly were not capable. You have a long journey ahead. From Jan 5th 2019 and the formal launch of DigitalPakistan 76 days have lapsed and if the net outcome is 2 pages, I am but compelled to ask difficult questions. So lets hope you guys deliver on #DigitalPakistan vs this turning into a #DigitalJuloos .
Drive around the country, drive around in big cities and small, look at the names of the streets/roads/avenues. We cant get past sports men, leaders of yesteryears(most of whose f**kups have really put us where we are) yet they all continue to get an honourable mention, some in their life time most posthumously. Not to forget war vets and other leaders of a different ilk. Some educators thrown in for good measure, a few poets, some judges, some “notable family/scions” some of the 21 Club fame. What is missing are the businesses, the true industrialists (pre nationalisation even) and those who have done well in trade and commerce. A nation that cannot create business heroes, will continue to produce zeros. We have not let businesses thrive, we have not let people come out on top due to innovation, of those who have “allegedly” become big names, all have small dirty secrets of tax evasion, bribery & influencing the law in their repertoire. But generational wealth washes the sins of your grand daddies, so you can start fresh.
We have to genuinely ask the question about who is representing us in the govt machinery? Where are their interests? Are they aligned with any national outlook or just personal. Let us start from the basics, what do we need to build business heroes? we need businesses, what can launch businesses at a national level, the ability to have:
A) Access to land B) Less regulatory burdens C) Ease of doing business (Not just BS around it) D) Not having STATE compete with commercial enterprises
Let us look at it simply, Why do we need a National Bank? Why do we need Sindh Bank or BOP? Why do we need LDA/CDA, Why cant these things be privatised? Similarly Airports? Railways, PIA. Heathrow is private, the Toll road in Canada is private. We have to encourage people to come and do business, we need smiles at the airports, not to have them look like Thanas and pissed off morons manning the counters. Some times I wonder what side of the immigration desk is the crook?
In the same spirit, lets look at ease of visa. Why the hell do we not have visa free entry for just every one? Do the screening on arrival, its time to increase trade and FX. If they come they shall bring in $$… This small mindedness around national security and spy agents and others, is a glaring admission of not having security really where it needs to be, intelleignce where it needs to be vs the generational bullshit we feed our selves, that we have to take the extreme measure of stopping every one. No ones coming to steal nuclear secrets, people are coming to attend weddings, business meetings, trade missions, just to see whats going on. This whole nadra site for visas is more confusing than it is easy. If i need a chamber letter and invite and then submit it a the airport pre arrival, it is just pure stupid on so many levels that it is not visa free entry…
Lets look at this scenario, some one comes from the US, we submit their docs, they land at night given thats where the GCC carriers typically come to our shores. By night the person leaves the airport, gets stopped on way to PC as it says “no foreigners in cantonment” move the ffing cant out of the city then. Let every one come, dont scare them dont make insane rules, think this through. Make room to do business. Sorry it may inconvenience a few but it will open up the economy.
Tell every one we are open for business, open for trade, open for cultural exchanges, open for some expat in Dubai who on the weekend wants to visit friends or just come have some authentic food. Have tour operators, certified by private entities who can do food tours, who can do city tours who can do business tours, who can do pop up meets with families who want to take in airbnb style guests. Atleast start the conversation. Make insurance mandatory from local firms on tourists. Make money, dont send them back… Silly tourism ministries and cutlural exchanges where our ffing ministers go over seas wont fix this, instead of saying come see our northern area, bhai open the airports, make it cheaper for flight charters to land. It starts with first getting your internal security right, work past the hype, tell every one to come. We are solving the wrong problems.. Our internet is open(so far) dont block returning expats phones, remove shitty systems for tax payment of phones, fix the root cause dont make people suffer for your governmental and security apparatus failures.
Before any of this, take a piece of paper, if you are in government and write, “I will not be over smart any more, I need to fix my domestic issues around security and stop making claims, I will do some thing productive in my life time and my career”. Change happens with the realisation that you need to have change.
We are in the worst economic cycle we need to have open borders and open flights to get FX coming in, when people come in then companies will follow.
Threatening Google and FB and begging Netflix to come when really they cant even travel here makes me wonder how stupid our government machinery really is, are these guys in line for the Darwin awards?
Ease of business should be so simple that an incoming person or a local resident should be able to either go online and provide an ID and be able to get started and open a bank account. People should be able to come in and spend 200$ – 500$ and open a business account. This is the stuff we need to do to kick of a mini foreign SME revolution. Simplification of SECP nonsense and SBP SROs is next inline with taxation and just getting started. Reputed and regulated money changers should follow next. Allow banks to do it too. Hint Hint, any one coming with Dollars should be able to spend them with ease, period.
Stop building govt spend based incubators and accelerators, start building farmers markets, fresh produce packaging efficiency, local product displays, food sampling stations so people taste, eat, get hooked and buy and take back. Package it right, they will come.
Before most of this fix this airline situation please, next stop this bullshit around a soviet era steel mill, donate the land to any one who wants to put up a factory, give loans to SMEs without domicile BS. Clean up the govt machinery and make it fair to get into govt. Make it mandatory for govt employees to have to send their kids to public schools. KGS and Aitchison aint it. If Ghabrana nahin hay to make this the bench mark. Stop all foreign govt travel, open Pakistan for business. Let people come see us at our best or worst, enough pitching. Start showing, showcasing.
Oh whilst you are at it, f**ing fire all of the airport security staff that allows people to smoke in bathrooms at all the airports. Take bids let people make and build out airports. Just put in the rules. Starting from getting your basic act of security of non-smoking enforcement. You want me to believe these circus acts can manage security even with visa restrictions, they cant even stop people on the right side of the Quaid from smoking. Loads of introspection required. Mann all your airport counters, stop hiring retirees.
On to my fav subject of the govt competing with private enterprise, tell your ministers that the state doesnt compete with private enterprise, it helps them flourish. Pakistan post cant compete with Private mail operators and shouldn’t, just like DHA shouldn’t even be around to compete with private developers(of which there are none, Malik Riaz is a state within a state, like DHA) Similarly Pakistans largest enterprise/startup listed and otherwise is full of retirees who are veterans of an other state institution. In a country of 50% or more 25 yr olds, learn to Ffing retire and let others get a chance. This holding of secret ballots hand shakes, systems, exams, referrals etc is all non-sense holding us back. You had one shot in active service, don’t make the nations young pay for your power hungry desire to never retire. (R).
Be honourable do the honourable thing.
Have bankruptcy laws. Its not too hard, weve been at it for 70 + yrs get the basics figured out. Fix the tax structure, tax agriculture, why the f**k dont you, because of your vested post retirement zameen interests and of those who are in power and have massive agricultural land. Reform will only happen when it starts from within. Iss hamaam mein sab nange hein.
Extension dain to bhai achay kaam ki. Extension dain to make late payments, for helping succeed. Its simple, we all know what needs to be done, starts with having a voice and raising it, Do not continue to live in this country on rent, and dont let the 1% collect the rent. Make them pay, its time for change, be vocal.
Stop all the khaipias on flights from Dubai, Srilanka and Thailand to khi.(No dis respect, but action starts from calling out the issue, if you take a flight you know it, you have seen it. Open other avenues so a generation of these guys do other stuff, put their business sense to productive use.
Misguided religion much. Carry Agent:) Wow.. This is whats wrong with us. Steal with one fine swoop and include god in the other.
Who is bringing the pans? the garments without the paperwork? Who is paying off the customs guys at the airport? opening bags on the belts? swapping items? I have been put through the secondary scanner but the guy bringing in a 75 inch tv walked past:). I pay taxes, he steals from the govt, he is under invoicing, making us loose FX and paying $ equivalents to get on those frequent flights to bring in goods that are all vastly illegal. Dont raid the markets, stop this shit at the airports first. You want to stop these Mffers, not the tourists who bring their phones on roaming to make calls and spend money. Solving the wrong problem is the larger problem for us. Mr IK the exam question is, are you going to do any thing to change the status quo?
Every ones under invoicing, but the guy who is not, cant compete with them? Do you see the problem? You want to fight FATF, go stop all the hawala that is going into trade, at the point of import find out how those goods were paid for? auction them when there is no money trail. Google the price of an item it takes 2 minutes. Auction when found to be illegally imported. Stop the gift receipts and under valued shipments. Oh whilst you are at it, stop Alibaba/Ali Express from sending 90% of their goods to retail based sales and B2C thats coming in duty free and depleting FX. You dont have to look hard. Stop being taken to task by traders bodies and market associations, they are all crooks if they want time and concessions. If they strike you strike back. Basically the issue is no one is used to 5% or 10% or 15% margins, the guys at the top want a windfall. The only way that happens is at the cost of the rest of the nation.
It truly is time to promote people to do business, trade, to get into exploring new ideas, making business easy for all those who want to do some thing. But more so than SMEs make it easy for big business to establish a strong hold, allow large infrastructure projects. Equity like land smells like shit when you pile it up, when you distribute it, flowers grow in it. Spread the wealth. #nayapakistan
Ps. If you are an expat Pakistani and want to suggest that we focus on the positive things the govt is doing and that IK is one person only. You only have a vote if you bought the Pakistan Bano Certificates. Your once a year guilt ridden trip to see your ageing parents and bringing gifts does not qualify you to an opinion. Dont send us #prayersandwishes send #greenbacks or come and participate from within. Change seldom happens from tweeting. No roads will be named after you for your Hashtag tantrums!
No, I don’t have any outsider, let alone insider info on Amazons plans on the Pakistani market. I also have no pictures of meetings with Amazon staff, past present or future. What I have is the media view on the tough love Amazon is getting in India and the relative change of direction Mr Bezos is orchestrating by stating that the e-commerce giant will use its global footprint to export $10 billion worth of ‘Make In India’ goods by 2025.
This gives a good insight of whats to come and the directionality of the market. Interestingly Bezos also stated that Amazon is going to invest $1 billion in digitising the small and medium businesses in India. By that measure keeping that their GDP is roughly 7 times larger than ours, we need about a 150M$+ run rate to ramp up our own digitization and infrastructure to get similar export access. But what is missing is, we have no Amazon in Pakistan.
Our sellers cant even really, authentically sell or setup fulfilment by Amazon unless the use intermediaries or ship and store with Amazon state side or other nearshore destinations where Amazon is engaged in FBA. Other complications include, identifying the product, listing it, setting up a legal entity to collect the payments, exporting from Pakistan and other launch based items that gate the average person, exporter, product developer to really not get in to the value chain, instead they offset their product by consigning it to some body smarter, more resourceful and some one who can take their product at 35c a dozen and mark it up to 5$ a Dozen and sell on Amazon/Ebay. This value addition doesn’t see the FX delta come to Pakistan and doesn’t add any special value addition skills to the net-producers domestically.
With amazon ads business nearly in full swing allowing a company to customize and curate a multipage digital storefront, our producers are missing out. They will continue down the path of middlemen. Stores aren’t new, but the company has added features like shoppable images and the ability to schedule updates like new releases or seasonal changes. Imagine if just for the textile industry or additional traditional large scale non value added exporters this channel was made available?
The simple view would be that you would have an Ideas Store on Amazon or an Al-Karam store on amazon plus all the others who are engaged in selling bed-sheets and towels and others D2C(Direct to Consumer). They can continue down the export path to be vendors of record for Macys and others but once they start earning US D2C margins the ball game will change. This is just in the higher end of the value chain. Imagine all others who are not as large but want to explore the global market(s). Imagine if they could hold inventory at FBA and others used this to drop ship using their own brands? You now become a multiparty supplier as apposed to just a manufacturer of record. The game changes significantly as does the growth multiple. Not like no ones doing this already from Pakistan. Shan has a store on Amazon, but the average Shan Masala retailing in the US at under $2 and selling on the Shan Amazon store for over 6$ doesnt Make sense. Interestingly Shan has 800gs pink salt for $3.50 Whilst competing stuff sells for higher. https://www.amazon.com/Shan-Himalayan-Natural-Grain-Powder/dp/B07XTN7DMB/ref=sr_1_1?crid=1AXN3MQRNBHT8&keywords=shan+pink+salt&qid=1580720515&sprefix=shan+pink+%2Caps%2C336&sr=8-1 and more confused pricing for amazon prime and refined salt etc. Also most competing products are listed in Ounces and Lbs. Its interesting but clearly shows the disconnect even large brands seemingly have. So there is a lot of upside potential here.
So where do we start? Amazon isn’t coming to Pakistan just yet, based on what ever data they are crunching, their bet has been India and GCC (Amazon.ae). But can we get smarter, can we use the .AE route to reduce one more middle man and get on to the Amazon bandwagon? Lets back up a little bit, before we get down to having visions of grandeur we must learn from the Amazon example in India and them digitising small businesses to the tune of 1bn$, in its simplest form it means having accurate product information data, moving toward Harmonized System (HS) for classifying goods is a six-digit code system. It means getting the producers ready to make the product Amazon (export) ready, in turn making it globally ready.
It also means linking the money chain, from export to bank to return payment to FX transfers. I would be shocked if Amazon didn’t get into a Stripe model to allow direct merchant on-boarding, albeit a localised version because they are present in India. Hypothetically a vendor could sign up locally, price in USD/INR equivalent, collect the net sales proceeds locally and the only person doing FX conversions is Amazon, imagine the float and the local payments play, if Amazon got in to a captive wallet and expanded it into a system to pay for inputs by local manufacturers and vendors.
Only time will tell where this is headed but sadly looking at the state of our export chain and value addition we are almost stuck in what we did generationally without really taking the leap of faith on doing some thing different, the only thing that has grown is the countries over reliance on the same sectors to export to earn FX.
Even the domestic market is too big to ignore long term. In the short term there are other bigger bets to make and Amazon is making those, we should no less be prepared and be ready to exploit these companies and these systems when they are accessible to us. Or figure out smart ways to plug in to the existing FBA value chains and store fronts. As a starting point all the Pakistanis Immigrating to Canada/Australia and other locations, nothing is stopping them from setting up a bridges to provide cheaper arbitrage for the Made in Pakistan Narrative. Kamyab jawan should find plug-ins to extend beyond just rhetoric .
We need to bring our own plug-in for selling on Amazon, instead of buying into dubious VPN based setups and being completely out of the value chain and at the mercy of the evangelical church equivalent of used car sales people promising our manufacturers sunny outcomes. By getting on to FBA programs and taking unassuming college kids to partake in get rich schemes of doing Drop ship form China to Amazon store fronts. Granted some of those work, short term for the person researching top selling products/categories on Amazon and doing drop shipping etc, but it adds no value to local manufacturers and to our FX items. In turn most of the money made this way is retained offshore.
We have to think of a longer term play, starting from working to increase over all exports, to increasing the value addition. Simple example is Pakistani Pink Salt, imported in to Dubai by Indian players, re-branding and adding world class packaging and marking up by 200% for retail sale in the US and Canada. This phenomenon is still on-going. https://www.npr.org/sections/thesalt/2019/10/03/763960436/pakistan-wants-you-to-know-most-pink-himalayan-salt-doesnt-come-from-india (This article will you give you some more insights) We have yet to protect such things, lets take a que from New Zealand AND Manuka Honey ( http://theconversation.com/manuka-honey-who-really-owns-the-name-and-the-knowledge-105508) Some other things now that we have gone down this path that the government or other individuals should consider are Kashmiri Chai (Either ready to brew like instant Cofffee) or As a solidified crystal or using other packaging mechanisms for delivery and even popularising some thing local. Along with brand protection for an entire segment.
We have some amazing startups in Pakistan that are working hard to bring unfair advantages to businesses both local and international in the global trade space. From knowing your markets to one click research to expanding your footprint, data is your friend. One such startup http://www.tradeforesight.com/ is a hidden gem. If you have access to figuring out whats selling where, how since when along with trade based regulation and laws, half the battle is already won. Not sound like a product endorsement but if would truly help a new generation of exporters online.
Its not just Amazon, but if for instance you saw the pink /Himalayan salt exports go up from Pakistan and you could enhance the upstream value chain in real time by packaging and then re-exporting would you not try to take a go at it? Coupled with having the ability to sell on amazon or ebay for that matter? But the first you need a view into the space. Whilst research on Amazon tells you whats selling on Amazon, it also gives you additional insight if you can see country by country, region by region, export and import types and vendors/manufacturers etc.
For instance, Traderjoes the notoriously famous food chain out west in the US has an entire team that does global food sourcing. Has any one even tried from Pakistan? https://www.traderjoes.com/contact-us/new-vendor-requirements are we just too lazy and too focused on traditional trading partners and markets? Are we ready to enhance our value chains.
All the money the govt and aid agencies are dumping into stupid projects should be redirected towards helping local industry achieve export related certification , local presence and certification outfits etc so we can up-skill and up-scale at the same time. Kudos to those who using their scale have already done FDA and other certifications and exporting into those markets. None of this will happen by waiting on international players to come to our door step. Some international players who have come, come at a price of giving exposure to Chinese led products even on their market places(I explored that in an earlier post). So whilst the Chinese have it right, they came to our market and allowing their exporters to export in to Pakistan, we have to figure out a way to export our goods out of Pakistan into other markets. If we continue to let others treat us only as an import first destination we will have no control over our trade deficits.
The time is now to really revisit what we have to offer as exporters and figure out a sustainable path to value addition. Waiting for others to come and disrupt our market, will lead to a different kind of disruption that we are likely not prepared to handle.
