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Economic Growth
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ECONOMIC CRISIS
2008
The Impact of University
Research on Industrial
ECONOMIC SUPPLEMENT Innovations
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productivity are Increased Revenue and tomating sales and client backing proc- exporters, producers, suppliers and oth-
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Industrial Option December 2008 | industrialoption.com
Table of Contents
Editorial Page - 4
Diary Page - 5
The Impact of University Research on Page - 9
Industrial Innovations
2008 Economic Crisis Page - 12
Corruption and Bribery: Poverty and Economic Page - 16
Development Impacts
Super Tips to Get Rid of Your Public Speaking Fear Page - 17
SWOT Analysis- To Make Your Business More Profitable Page - 17
IBM, Academics Seek to Create a Computer That’s More Like Us Page - 22
News & Views Page - 23
Micro-financing: an innovative application of social networking. Page - 25
Islamic festivals: The spirit behind Eid -ul-Adha Page - 37
Domestic Issues
needs Domestic
Solutions Sheikhupura Chamber of Commerce & Industry
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Industrial Option December 2008 | industrialoption.com
Editor’s Desk
by natural resources, level of education
manpower etc and thirdly, institutional
dimension which relates to the ability to
get things done or precisely efficiency in
public management. In view of this, any
effort geared toward promoting devel-
opment in the society must consider the
three dimensions. The bane of Pakistani
public administration is that of corrup-
tion, which has not allowed the inter-
relationships that exist among the three
variables to provide built – in- mecha-
nism that has the capacity of engendering
good governance. Therefore, under the
leadership of President, Parliament shall
submit that corruption must be positively
addressed and reduced in the public bu-
reaucracy for Pakistan to be able to meet
the challenges of the 21st century.
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Industrial Option December 2008 | industrialoption.com
Diary
Historically SCCI was registered in 1992 to work ourselves out of business - and aspects of the growth agenda are well un-
at Pir Bahar Shah Chowk (Ref: Board of In- the best way to do that will be to encour- derstood, others are more contested.
vestment, Pakistan) and later transferred age growth and trade based on industrial
to Kot Abdul Malik. Finally, it is operating output of Pakistan”. The Economic Outlook of Pakistan
at 23 KM, Lahore-Sheikhupura Road, Qila
Sattar Shah, Sheikhupura, Punjab, Pakistan. Pushing growth up the development In Pakistan, Pre-existing macroeconomic
Throughout the years, SCCI performance agenda imbalances and deep-seated structural
questioned at national and international problems have played a large part in pro-
levels, debated, and published by PPI Achieving economic growth is essential ducing the current economic downturn.
(Pakistan Press International) and other for securing long-term development and Short term and long term issues there-
news agencies. poverty reduction: no country has suc- fore need to be addressed, but they must
ceeded in sustainably reducing poverty in not be seen as independent - the best
Despite criticizing that what happened in the absence of growth. short term policies are also good long
past, the current elected body under the term policies.
leadership of Mr. Manzoor Ul Haq Malik, Recent volatility in global markets has fo-
gives tremendous peace of mind. cused our attention on growth prospects Role of Education in Economic
in the world’s richest countries. But it Growth
Under his leadership SCCI membership also serves to emphasise the importance
has grown to 180 eligible members and of putting in place the right conditions to Education has been recognized as the
rapid reforms and development works facilitate long-term, sustainable growth in most important source of competitive
are undergone. Mr. Malik believes that the developing world, which is needed to advantage for a nation. It is the key de-
“Developing countries have long argued pull millions of people out of poverty. terminant of firm level productivity which
in turn drives business growth and profit-
“Developing countries have long argued the ability. Technical knowledge, in particular,
is required both for industrial as well as
importance of growth for lifting their peo- service development. Technical institu-
ple out of poverty. And we at SCCI should tions contribute to the growth of busi-
ness and industry in a variety of ways.
not forget that, ultimately, we exist to work The most influential and direct impact is
through their graduates who bring in new
ourselves out of business - and the best way skills and perspectives to firms. Industries
also seek advanced training on specific
to do that will be to encourage growth and topics as well as consultancy from tech-
nical institutions. Often these institutions
trade based on industrial output of Paki- collaborate with academics to design and
stan”. Manzoor Malik, President SCCI develop new technologies. In this paper
we have argued that technical education
plays a crucial role in building these capa-
the importance of growth for lifting their Growth is however, a complex and multi- bilities and consequently in the growth of
people out of poverty. And we at SCCI dimensional subject, which encompasses industry.
should not forget that, ultimately, we exist a huge range of issues, and while some
Page -
i ndustrial
Industrial Option December 2008 | industrialoption.com
OPTION
Introduction to Industrial Option
Industrial Option Newsletter covers all lutions for many of the party’s needs. Real Reduced elevated costs: Thanks to
aspects of business, from Pakistan and in- moment market allows buyers to go fast sleek supply string elevated costs can be
ternational market news and analysis of resolution; two main indicators of party reduced upward to 30 percentages.
economic trends to articles on the peo- productivity are Increased Revenue and
ple and technologies that influence how Cost Saving. Products offered on a mar- B2B exchanges: The landscape is lit-
we do business every day. It is written ket are integrated with the www.indus- tered with hundreds of B2B exchanges
expressly for top business decision-mak- trialoption.com. that have failed, demonstrating that suc-
ers and opinion leaders who need an cess is far from automated. But many are
international outlook in an increasingly There are new benefits that party can ob- yet operating. They have learned how to
global marketplace. Each month issue tain from participating in industrialoption. go reward of the opportunities and avert
explores the links between domestic Of- com market as easily. the drawbacks of this energetic original
fers reporting, commentary, and analysis merchandising line. The sales string inte-
on world politics, finance, and business For purchaser participants a B2B market grated into a Business to Business market
trends. Also covers science and technol- offers as mentioned below: covers every phase of selling procedure
ogy, literature and the arts. When people including quote, dialogue, billing and con-
get serious about business they read In- Time savings: Provides for faster ac- signment tracking.
dustrial Option. ceptance, ordering processes and saving
tracking. www.industrialoption.com is an innova-
IndustrialOption.com an online tive and comprehensive online business-
businesses to business portal Access to original suppliers: B2B to-business (B2B) portal, which provides
market involvement removes geographic a professional platform for the Pakistani
IndustrialOption.com is a huge commu- fences and provides approach to original exporters, producers, suppliers and oth-
nity of buyers, sellers and industrialists. suppliers. ers who are involved into import-export
trade. Since inception in 2008, Indus-
For the job to job marketplace, brand can Increased sales: With approach to a trialOption emerged as an international
be merely defined as the lot of images, wider marketplace, suppliers have the po- plateau for thousands of consultants,
image and feelings that are evoked in the tentiality to increase revenue. importers-exporters, agencies and firms
psyche of your customers and prospects Reduced sales and backing costs By au- to transact business globally without any
at the reference of your figure. tomating sales and client backing proc- intermediaries.
esses companies can cut over chief costs
IndustrialOption.com is one-stop job so- around 25-30% well.
Page -
Industrial Option December 2008 | industrialoption.com
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NOMINATION IN FPCCI
High Time for FPCCI to realize its responsibilities & accountability
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Industrial Option December 2008 | industrialoption.com
and university should be established. In databank of important British innovations tive sectors in developing countries has
certain areas of science the role of uni- introduced since 1945 has shown that been noticed by the larger international
versities is to make the initial fundamental universities and research associations community and has resulted in various
breakthrough, followed by many years of have provided major initiating knowledge programs of action. An awareness of the
basic research to understand the nature in a (combined) average of 4.7% of 2293 importance and complexity of the prob-
of the process; the role of industry is innovations in 1945–80. Both universities lem led the United Nations Industrial
commercially to utilize the breakthrough, and research associations have decreased Development Organization (UNIDO)
concentrating on understanding and in importance as sources of innovation, to organize an expert group meeting on
harnessing its effects while being largely whereas the contributions of govern- industry– university linkage. The empha-
unaware of their causes. Given the very ments and individuals have fluctuated.The sis of the meeting, held in Vienna in 1973
rapid growth in industrial R&D capability, databank also yielded information on the (UNIDO 1974), was action to be taken by
industry would largely be unable either to level of university input to firms of differ- bilateral and multilateral agencies.
utilise the potential of the breakthrough ent sizes: on average, small firms used the
or progressively to enhance this potential. universities less than their larger coun- Further attempts by the United Nations
Industry has thus needed increasingly to terparts did. (UN) include the 1979 Vienna Programme
take over the relevant fields of research of Action on Science and Technology for
itself. At the same time the universities Academic research and innovations Development, which showed that the
have gone on to open up new fields of in developing countries development of strong linkages between
research, paving the way for the next gen- producers and users of R&D is one of the
eration of industrial applications. Universities and public research estab- challenges facing developing countries in
lishments are among the most important the reinforcement of their S&T capabili-
The British Universities and Industry scientific institutions in most countries, ties (Nichols 1984).
Joint Committee looked at the ways including Third World countries. Univer-
companies use university R&D by size of sities usually account for a significant pro- In 1983, the Lima Panel, under the UN’s
company. On all the measures of contact portion of national research expenditures, auspices, called for the formation of a
between industry and universities, there a large share of the scientists engaged in network of institutions (including R&D
was a marked pattern: the small firms had R&D, and the bulk of a nation’s produc- and educational institutions, consulting
by far the fewest contacts. Moreover, out tion of S&T research. Unfortunately, de- and engineering firms, private companies,
of 403 firms employing fewer than 200 spite all this, the contribution of public and public enterprises) to apply the clas-
people (out of a total of 1097 firms), 75% R&D institutions in developing countries sical demand-pull and supply-push theo-
had little or no contact with universities, is negligible, and studies on the role of ries in the developing countries like they
whereas out of 96 firms with more than universities and research institutes in in- are applied in the developed countries.
5000 employees, only 9% had little or no dustrial technological change in develop- Other meetings organized under the aus-
contact with universities. A correlation ing countries are scarce. pices of UNIDO included the Regional
analysis of the data revealed that having Industrialized countries and developing UNIDO–ESCAP Workshop and National
Consultations on the Commercializa-
Industrialized countries and developing tion of Research Results, held in Bangkok,
Thailand, in 1984; and the Ad-hoc Expert
countries are faced with completely differ- Group Meeting on Co-operation among
Universities, Industrial Research Organi-
ent environments: both skilled labour and zations and the Role of UNIDO in this
capital are in short supply in Pakistan. Co-operation, held in Vienna, Austria, in
1976.
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Industrial Option December 2008 | industrialoption.com
nomic growth and increase the pace of research (donations, transfers, and ex- fuse that knowledge throughout society;
industrialization with S&T. Many S&T in- changes and sharing of staff, equipment, and innovators and entrepreneurs, often
stitutions have been established, often at and information). in collaboration with universities, take
a great cost. Unfortunately, most of these advantage of these ideas and bring new
institutions work in isolation, without ef- For the sake of simplicity, we assumed that products and services to market and into
fective linkages with the productive sec- successful interactions were those that our homes and offices.
tor. There is, thus, a need for a greater both parties were pleased with. However,
understanding of the factors that could this does not imply that there was a net Universities are key players in the gen-
lead to improved interactions between financial gain in the exercise. Unsuccessful eration of entrepreneurs who form start-
scientific research institutions and indus- programs were those that failed to bring ups and expand businesses, thus creating
try and to the enhancement of Pakistan’s about or sustain institutional interaction, thousands of new jobs—often higher pay-
industrialization process. despite various efforts to do so. ing skilled jobs for local residents—and
new income streams that catalyze
Academic and Research Institutions are The Role of Universities Today: Crit- further investment in the economy, which
never ends in themselves. They have rea- ical Partners in Economic Development generates still more jobs, personal income
son to exist only as they meet the de- and Global Competitiveness and capital investment.
mands of existing firms or serve as toll
for technology policy development and Universities as Knowledge Creators Universities are the conveyors of “seed
propagation. Hence their creation, objec- money” for exploratory research—a key
tives, structure and programmes must be Universities are the indispensable players ingredient to the acceleration of innova-
measured against their ability to make in the advancement of scientific knowl- tion and the development of new prod-
these ends.... Institutions have been cre- edge, which continuously seeds new gen- ucts and services that result in start-ups
ated without sufficient consideration erations of applied research, scientific and spin-offs.
of what their role should be in carrying breakthroughs and streams of new prod-
out adopted policy. These institutions, as ucts that enhance our lives and strength- Universities generate new and applied
well as their programmes and activities, en our economy. scientific knowledge that is needed and
have been established without sufficient used by local high-tech companies to
thought as to whether they are in accord Universities play a central and strategic expand their businesses and maintain
with overall national industrial policy. role in educating and training the scien- their competitiveness. University faculty
tists, teachers, researchers, entrepreneurs and students are an important source of
The university administration’s view and other skilled workers that fuel inno- technical expertise for local firms and a
on collaborative research vation in high technology and the knowl- significant source of productivity gains.
edge industries that are the primary
Just like the government, the Universities drivers of successful regional economies Universities are important purchasers of
in Pakistan do not seem to have any ex- today and are predicted to be local products and services and thus are a
significant catalyst to the emergence and
Just like the government, the Universities in Pakistan do not seem to development of a local supply chain, in-
have any explicit policy regarding its association with local industries. cluding many small businesses.
plicit policy regarding its association with the drivers of the global economy well At the Forefront of Job Training and
local industries. into the future. Re-skilling
Characteristics of industry–research Universities, especially large ones like the Universities are often the unsung heroes
interactions Virtual University Pakistan, foster equity of on-the-job training for graduate stu-
and “level the playing field” through the dents and interns who can work on actu-
To measure the extent of collaborations dissemination of knowledge and ideas by al industry research and application thus
resulting from an industry–research in- way of student education, faculty interac- providing necessary resources to indus-
terface, it is important to identify suc- tions, collaborations with industry, com- try while also refining their own skills and
cessful and unsuccessful linkages and the munity outreach activities, and through a knowledge resulting in greater efficiencies
benefits and impediments connected with variety of virtual-world mechanisms such and productivity upon graduation.
such collaborations. I found it difficult to as online training, digital libraries
compare the levels of success or failure and e-learning. Universities and their extension programs
of linkages and the resulting impacts on offer accessible means to continually up-
the collaborating partner because the Universities, Entrepreneurs and grade skills, acquire industry-specific ap-
collaborative projects were dissimilar, Competitive Businesses plied skills and learn new knowledge and
reflecting differences in organizations, skills for moving into better jobs or new
personalities, disciplines, institutional and Universities are innovation accelerators. careers.
economic contexts, and stages of devel- Innovation centers around three ingredi-
opment and operation. The measurement ents: knowledge creators, knowledge, and In these ways, today’s best universities
of success was also affected by the meth- knowledge diffusion and application—all mean so much more to their communi-
od of interaction (formal or informal) and three form the core of the activities of ties’ future than just a place for smart
by the modes of interaction, that is, the today’s leading universities. Talented peo- kids and great scientists.
modes of industrial financial support for ple create the knowledge; universities dif-
Page - 11
2008 Economic Crisis
In 2008, a global economic crisis was suggested by several important indi-
cators of economic downturn worldwide. These included high oil prices,
which led to both high food prices (due to a dependence of food pro-
duction on petroleum, as well as using food
crop products such as ethanol
and biodiesel as an alter-
native to pe- troleum) and
global inflation; a substantial
credit crisis leading to the bankruptcy of
large and well established investment banks as well as commercial banks
in various nations around the world; increased unemployment; and the
possibility of a global recession.
Ms. Sabahat Ali (Corporate Law Student, USA)
High commodity prices of sodium hydroxide have declared force food and commodities in the fast growing
majeur due to flooding, precipitating simi- emerging markets,” have been named as
Medium term crude oil prices, (not ad- larly steep price increases. possible reasons for the inflation.
justed for inflation). The decade of the
2000s saw a commodities boom, in which In the second half of 2008, the prices of In mid-2008, IMF data indicated that in-
the prices of primary commodities rose most commodities fell dramatically on flation was highest in the oil-exporting
again after the late-twentieth century expectations of diminished demand in a countries, largely due to the unsterilized
commodities recession of 1980-2000. But world recession. growth of foreign exchange reserves, the
in 2008, the prices of many commodities, Trade term “unsterilized” referring to a lack of
monetary policy operations that could
In 2008, the prices of many commodities, no- offset such a foreign exchange interven-
tion in order to maintain a country´s
tably oil and food, rose so high as to cause monetary policy target. However, infla-
genuine economic damage, threatening stag- tion was also growing in countries clas-
sified by the IMF as “non-oil-exporting
flation and a reversal of globalisation. LDCs” (Least Developed Countries) and
“Developing Asia”, on account of the rise
notably oil and food, rose so high as to in oil and food prices.
cause genuine economic damage, threat- In mid-October 2008, the Baltic Dry In-
ening stagflation and a reversal of globali- dex, a measure of shipping volume, fell Inflation was also increasing in the devel-
sation. by 50% in one week, as the credit crunch oped countries, but remained low com-
made it difficult for exporters to obtain pared to the developing world.
In January 2008, oil prices surpassed letters of credit.
$100 a barrel for the first time, the first Unemployment
of many price milestones to be passed in Inflation
the course of the year. By July the price The International Labour Organization
of oil reached as high as $147 a barrel In February 2008, Reuters reported that predicted that at least 20 million jobs will
although prices fell soon after. global inflation was at historic levels, and have been lost by the end of 2009 due to
that domestic inflation was at 10-20 year the crisis - mostly in “construction, real
The food and fuel crises were both dis- highs for many nations. “Excess money estate, financial services, and the auto
cussed at the 34th G8 summit in July. supply around the globe, monetary eas- sector” - bringing world unemployment
Sulfuric acid (an important chemical ing by the Fed to tame financial crisis, above 200 million for the first time.
commodity used in processes such as growth surge supported by easy mon-
steel processing, copper production and etary policy in Asia, speculation in com- Return of volatility
bioethanol production) increased in price modities, agricultural failure, rising cost of
6-fold in less than 1 year whilst producers imports from China and rising demand of For a time, major economies of the 21st
Page - 12
Industrial Option December 2008 | industrialoption.com
century were believed to have begun a gross domestic product, would drop by four recession indicators all peaked dur-
period of decreased volatility, which was 2.2 percentage points, making it the third ing that period.
sometimes dubbed The Great Modera- worst recession in the post World War
tion, because many economic variables II period. New York’s budget director concluded
appeared to have achieved relative sta- the state of New York was officially in
bility. The return of commodity, stock The former head of the National Bureau a recession. Governor David Paterson
market, and currency value volatility are of Economic Research said in March 2008 called an emergency economic session
regarded as indications that the concepts he believed the country was then in a of the state legislature for August 19 to
behind the Great Moderation were guid- recession, and it could be a severe one. push a budget cut of $600 million on top
ed by false beliefs. A number of private economists gener- of a hiring freeze and a 7 percent reduc-
ally predicted a mild recession ending in tion in spending at state agencies already
Economic governance the summer of 2008 when the economic implemented by the Governor. An Au-
stimulus checks going to 130 million gust 1 report, issued by economists with
In the final quarter of 2008, the finan- households started being spent. A chief Wachovia, said Florida was officially in a
cial crisis saw the G-20 group of major economist at Moody’s predicted in March recession.
economies assume a new significance as 2008 that policymakers would act in a
a locus of economic and financial crisis concerted and aggressive way to stabilize White House budget director Jim Nussle
management. the financial markets, and that then the said the U.S. avoided a recession follow-
economy would suffer but not enter a ing revised GDP numbers from the Com-
Number of U.S. household properties prolonged and severe recession.[citation merce Department showing a 0.2 percent
subject to foreclosure actions by quarter needed] It takes many months before the contraction in the fourth quarter of 2007
down from a 0.6 percent increase and a
In the final quarter of 2008, the financial cri- downward revision to 0.9 percent from 1
percent in the first quarter of 2008. The
sis saw the G-20 group of major economies GDP for the second quarter was placed
at 1.9 percent below an expected 2 per-
assume a new significance as a locus of eco- cent. Martin Feldstein, who headed the
nomic and financial crisis management. National Bureau of Economic Research
until June and serves on the group’s re-
The United States entered 2008 during National Bureau of Economic Research, cession-dating panel, said he believed the
a housing market correction, a subprime the unofficial arbiter of when recessions U.S. was in a very long recession and that
mortgage crisis and a declining dollar begin and end, makes its own ruling. there was nothing the Federal Reserve
value. In February, 63,000 jobs were lost,
a 5-year record. In September, 159,000 In the early months of 2008, many observers believed that a
jobs were lost, bringing the monthly aver- U.S. recession had begun. As a direct result of the collapse
age to 84,000 per month from January to of Bear Stearns, Global Insight increased the probability of
September of 2008.
a worse-than-expected recession to 40% (from 25% before
Possible recession the collapse).
In the early months of 2008, many ob- According to numbers published by Bu- could do to change it.
servers believed that a U.S. recession had reau of Economic Analysis in May 2008,
begun. As a direct result of the collapse the GDP growth of the previous two In a CNBC interview at the end of July
of Bear Stearns, Global Insight increased quarters was positive. As one common 2008 Alan Greenspan said he believed the
the probability of a worse-than-expected definition of a recession is negative eco- U.S. was not yet in a recession, but that it
recession to 40% (from 25% before the nomic growth for at least two consecu- could enter one due to a global economic
collapse). In addition, financial market tur- tive fiscal quarters, some analysts suggest slowdown.
bulence signaled that the crisis will not be this indicates that the U.S. economy was
mild and brief. not in a recession at the time. However A study released by Moody’s found two-
this estimate has been disputed by some thirds of the 381 largest metropolitan ar-
Alan Greenspan, ex-Chairman of the Fed- analysts who argue that if inflation is taken eas in the United States were in a reces-
eral Reserve, stated in March 2008 that into account, the GDP growth was nega- sion. The study also said 28 states were
the 2008 financial crisis in the United tive for the past two quarters, making it in recession with 16 at risk. The findings
States is likely to be judged as the harsh- a technical recession. In a May 9, 2008, were based on unemployment figures and
est since the end of World War II. A chief report, the chief North American econo- industrial production data.
economist at Standard & Poor’s, said in mist for investment bank Merrill Lynch
March 2008 he has a worst-case-scenario wrote that despite the GDP growth re- In March 2008, Warren Buffett stated in
in which the country could endure a dou- ported for the first quarter of 2008, “it is a CNBC interview that by a “common
ble-dip recession in which the economy still reasonable to believe that the reces- sense definition”, the U.S. economy is al-
would briefly recover in the summer sion started some time between Septem- ready in a recession. Warren Buffett has
2008. Under this scenario, the econo- ber and January”, on the grounds that the also stated that the definition of recession
my’s total output, as measured by the National Bureau of Economic Research’s is flawed and that it should be 3 quarters
Page - 13
Industrial Option December 2008 | industrialoption.com
of GDP growth that is less than popula- offices of IndyMac Bank frantically lined
tion growth. However, the U.S. only expe- up in the street to withdraw their money. Financial markets
rienced two consecutive quarters of GDP On July 11, IndyMac - the largest mort- January 2008 was an especially volatile
growth less than population growth. gage lender in the US - was seized by month in world stock markets, with a
federal regulators. The mortgage lender surge in implied volatility measurements
Rise in unemployment succumbed to the pressures of tighter of the US-based S&P 500 index, and a
credit, tumbling home prices and rising sharp decrease in non-U.S. stock market
On September 5, 2008, the United States foreclosures. That day the financial mar- prices on Monday, January 21, 2008 (con-
Department of Labor issued a report kets plunged as investors tried to gauge tinuing to a lesser extent in some markets
that its unemployment rate rose to 6.1%, whether the government would attempt on January 22). Some headline writers
the highest in five years. The news report to save mortgage lenders Fannie Mae and and a general news columnist called Janu-
cited the Department of Labor reports Freddie Mac. The two were placed into ary 21 “Black Monday” and referred to a
and interviewed Jared Bernstein, an econ- conservatorship on September 7, 2008. “global shares crash,” though the effects
omist: were quite different in different markets.
During the weekend of September 13–14, American stock markets were closed on
The unemployment rate jumped to 6.1 Lehman Brothers declared bankruptcy af- Monday, January 21 for Martin Luther
percent in August, its highest level in five ter failing to find a buyer, Bank of America King, Jr. Day. Seemingly in response to the
years, as the erosion of the job market ac- agreed to purchase Merrill Lynch, the fall in non-U.S. markets, the U.S. Federal
celerated over the summer. Employers cut insurance company AIG sought a bridge Reserve announced a surprise rate cut
84,000 jobs last month, more than econo- loan from the Federal Reserve, and a con- of 0.75% on Tuesday at 8 a.m. This rate
mists had expected, and the Labor De- sortium of 10 banks created an emergen- cut is believed to have been influential in
partment said that more jobs were lost in cy fund of at least $70 billion to deal with preventing large declines in the American
June and July than previously thought. So the effects of Lehman’s closure, similar to stock markets, with the Dow Jones In-
far, 605,000 jobs have disappeared since the consortium put forth by J.P. Morgan dustrial Average down only 1.1% for the
January. The unemployment rate, which during the stock market panic of 1907 day, never closing that week worse than a
rose from 5.7 percent in July, is now at its and the crash of 1929. Stocks on “Wall 1.6% decrease from the previous Friday,
highest level since September 2003. Jared Street” tumbled on September 15. and indeed closed up for the week. Later
Bernstein, economist at the Economics it was announced that Société Générale,
Policy Institute in Washington, said eight On September 16, news emerged that one of the largest banks in Europe, ac-
months of consecutive job losses had his- the Federal Reserve may give AIG an $85 cused its employee Jérôme Kerviel of
torically signaled that the economy was
in a recession. “If anyone is still scratching As of October 2008, stocks in North America, Europe, and the
their head over that one, they can stop,” Asia-Pacific region had all fallen by about 30% since the begin-
Mr. Bernstein said. Stocks fell after the re- ning of the year. The Dow Jones Industrial Average had fallen
lease of the report, with the Dow Jones
industrials down about 100 points after
about 37% since January 2008.
about 40 minutes of trading.
—New York Times billion (£48 billion) rescue package; on fraudulent trades costing it €4.9 billion,
September 17, 2008, this was confirmed. and causing it to sell approximately €50
CNN also reported the news, quoted an- The terms of the rescue package were billion in European equity derivatives
other economist, and placed the news in that the Federal Reserve would receive from January 21–23.
context: an 80% public stake in the firm. The big-
gest bank failure in history occurred on The effects of these events were also
“Job losses are still mild by recession September 25 when JP Morgan Chase felt on the Shanghai Composite Index in
standards, but the losses are relentless agreed to purchase the banking assets of China which lost 5.14 percent, most of
and they are accumulating,” said Bob Br- Washington Mutual. this on financial stocks such as Ping An In-
usca of FAO Economics.“If job growth had surance and China Life which lost 10 and
paced with population growth during this The year 2008 as of September 17 has 8.76 percent respectively. Investors wor-
year, it would have meant 1.3 million new seen 81 public corporations file for bank- ried about the effect of a recession in the
jobs would have been created. Instead ruptcy in the United States, already higher US economy would have on the Chinese
605,000 were lost. That means about 2 than the 78 in 2007. Lehman Brothers be- economy. Citigroup estimates due to the
million fewer people are working than if ing the largest bankruptcy in U.S. history number of exports from China to Amer-
the economy were on a steady path. And also makes 2008 a record year in terms ica a one percent drop in US economic
that’s a big number.” But while econo- of assets with Lehman’s $691 billion in as- growth would lead to a 1.3 percent drop
mists generally study the payroll numbers sets all past annual totals. The year also in China’s growth rate.
most closely, it’s the unemployment rate saw the ninth biggest bankruptcy with the
that registers with most Americans when failure of IndyMac Bank. Market downturn Fall 2008
they think about the labor market.
The Wall Street Journal states that ven- As of October 2008, stocks in North
Liquidity crisis ture capital funding has slowed down America, Europe, and the Asia-Pacific
which in the past led to unemployment region had all fallen by about 30% since
In early July, depositors at the Los Angeles and slowed new job creation. the beginning of the year. The Dow Jones
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Industrial Option December 2008 | industrialoption.com
Industrial Average had fallen about 37% gage-backed security, that triggered the neo-liberal economic theory should have
since January 2008. economic crises of 2008. protected shareholder equity.
It has also been argued that the root
There were several large Monday de- On October 17, 2008, attorney Timothy cause of the crisis is overproduction of
clines in stock markets world wide dur- D. Naegele wrote an article in the Ameri- goods caused by globalization. Professor
ing 2008, including one in January, one in can Banker entitled, “Greenspan’s Finger- Herman Daly suggests that it is not ac-
August, one in September, and another in prints All Over Enduring Mess,” which tually an economic crisis, but a crisis of
early October. argues that Alan Greenspan’s actions and overgrowth beyond sustainable ecologi-
inactions triggered the economic crises of cal limits.
The simultaneous multiple crises affecting 2008. The article discusses ‘the economic
the US financial system in mid-September tsunami that has been rolling worldwide List of Countries which experienced
2008 caused large falls in markets both in with devastating effects’; and the author recession in 2008
the US and elsewhere. Numerous indica- asserts that ‘Greenspan is the architect
tors of risk and of investor fear (the TED of the enormous economic “bubble” that Many countries experienced a recession
spread, Treasury yields, the dollar value of burst globally’. The author cites Giulio in 2008.
gold) set records. Tremonti, Italy’s Minister of Economy and
Finance, who said: “Greenspan was con- Denmark and Iceland went into recession
Russian markets, already falling due to sidered a master. Now we must ask our- in the first quarter of 2008, but came out
declining oil prices and political tensions selves whether he is not, after [Osama] again in the second quarter.
with the West, fell over 10% in one day, bin Laden, the man who hurt America the
leading to a suspension of trading, while most.” The following countries went into reces-
other emerging markets also exhibited sion in the second quarter of 2008: Esto-
losses. While Greenspan’s role as Chairman of nia, Latvia, Ireland and New Zealand.
the Federal Reserve has been widely dis-
On September 18, UK regulators an- cussed (the main point of controversy The following countries went into reces-
nounced a temporary ban on short-selling remains the lowering of Federal funds sion in the third quarter of 2008: Japan,
of financial stocks. On September 19 the rate at only 1% for more than a year Hong Kong, Singapore, Italy and Ger-
United States’ SEC followed by placing a which, according to the Austrian School many.
temporary ban of short-selling stocks of of economics, allowed huge amounts of
799 specific financial institutions. In addi- “easy” credit-based money to be injected As a whole the fifteen nations in the Eu-
tion, the SEC made it easier for institu- into the financial system and thus create ropean Union that use the euro went into
tions to buy back shares of their institu-
tions. Many libertarians, including Congressman and former
2008 Presidential candidate Ron Paul and Peter Schiff
On September 22, the Australian Securi-
ties Exchange (ASX) delayed opening by in his book Crash Proof, predicted the crisis prior to its
an hour [161] after a decision was made occurrence.
by the Australian Securities and Invest-
ments Commission (ASIC) to ban all an unsustainable economic boom), there recession in the third quarter.
short selling on the ASX. This was re- is also the argument that Greenspan ac-
vised slightly a few days later. tions in the years 2002-2004 were actual- Official forecasts
ly motivated by the need to take the U.S.
Causes of the crises economy out of the early 2000s reces- On November 3, 2008, according to all
sion caused by the bursting of dot-com newspapers, the EU-commission in Brus-
On October 15, 2008, Anthony Faiola, bubble - although by doing so he did not sels predicted for 2009 only an extremely
Ellen Nakashima, and Jill Drew wrote a help avert the crisis, but only postpone it. low increase by 0.1% of the BIP, for the
lengthy article in the Washington Post countries of the Euro-zone (France,
titled, “What Went Wrong”. In their in- Many libertarians, including Congressman Germany, Italy, etc.). They also predicted
vestigation, the authors claim that former and former 2008 Presidential candidate negative numbers for the UK (-1.0% !),
Federal Reserve Board Chairman Alan Ron Paul and Peter Schiff in his book Ireland, Spain, and other countries of the
Greenspan, Treasury Secretary Robert Crash Proof, predicted the crisis prior to EU. Three days later, the IMF at Washing-
Rubin, and SEC Chairman Arthur Levitt its occurrence. They are critical of theo- ton, D.C., predicted for 2009 a worldwide
vehemently opposed any regulation of ries that the free market caused the crisis decrease, -0.3%, of the same number, on
financial instruments known as deriva- and instead argue that the Federal Re- average over the developed economies (-
tives. They further claim that Greenspan serve’s printing of money out of thin air 0.7% for the US, and -0.8% for Germany).
actively sought to undermine the office and the Community Reinvestment Act are Economically, the car industry is especial-
of the Commodity Futures Trading Com- the primary causes of the crisis. However ly concerned; as a consequence, several
mission, specifically under the leadership Alan Greenspan himself has conceded he countries have already launched immedi-
of Brooksley E. Born, when the Commis- was partially wrong to oppose regulation ate help-packages, each involving several
sion sought to initiate regulation of de- of the markets, and expressed “shocked billions of dollars, euros or pounds.
rivatives. Ultimately, it was the collapse disbelief” as the failure of the self inter-
of a specific kind of derivative, the mort- est of the markets, which according to
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Industrial Option December 2008 | industrialoption.com
The World Bank notes that the poor suf- Corruption increases the cost of Corruption deprives countries of fi-
fer the most from the petty corruption projects nance for development
for the provision of public services: “Em-
pirical analysis has shown that the poor In the construction industry, project The impacts of corruption on investment
pay a higher share of their income on costs typically increase by more than 25 and economic growth are complex. Multi-
bribes than the rich” An IMF study shows per cent as a result of corruption. Simi- lateral Development Banks estimate that
that an increase of just 0.78 per cent in
corruption reduces the income growth
“Bribery and corruption...impede the efforts to re-
of the poorest 20 per cent of the people duce poverty. In particular, the diversion of funds
in a country by 7.8 per cent a year. The
Final Communiqué from the 2006 G8 St.
through corrupt practices undermines attempts by
Petersburg Summit is clear: “The net ef- citizens to achieve higher levels of economic, social
fect of corruption is felt most directly, and
disproportionately, by the poor.” and environmental welfare.”
- OECD
Corruption compromises the effec-
tiveness of aid lar mark-ups have been reported in the some $400 billion has been looted from
defence and finance sectors. The Asian African states and stashed in foreign bank
An estimated $100 billion of World Bank Development Bank (ADB) states that accounts, around $140 billion from Niger-
loans have been lost to corruption since “corruption can add between 20 per cent ia alone.The African Unions estimates the
the Bank’s foundation in December 1945; and 100 per cent to the procurement of $148 billion a year leaves the continent
because of corruption, and 80-90 per
“In poor countries, [corruption] can kill. cent of the illicit overflows never return
to the continent. Between $20-40 billion
Money meant for drugs for a sick child, or of corrupt money is estimated to flow
to build a hospital, can be siphoned off into from transition and developing countries
into Western banks annually.
overseas bank accounts or to build a luxury Improved governance benefits poor-
house.” er people
- Hilary Benn, Former UK Secretary of State for International Development
“countries that improve on control of
corruption and rule of law can expect
when other multilateral development government goods and services”. Overall (on average), in the long run, a four-fold
banks are included, the figure rises to corruption-related losses can total “more increase in incomes per capita. Thus, a
$200 billion. Such ‘leakage’ leads to aid than a country’s foreign debt”. country with an income per capita of US
‘disappearing’ before it reaches the poor. $ 2,000 could expect to attain US $ 8,000
Corruption diverts expenditure away “Corruption is a key element in in the long run by making strides to con-
from health, education and the mainte- economic under performance trol corruption. Similarly, such a country
nance of infrastructure to high ‘kickback’ could expect, on average, a 75% reduction
areas such as new construction and de- and a major obstacle to poverty in child mortality”. - World Bank
fence alleviation and development”
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Industrial Option December 2008 | industrialoption.com
Achievement
‘China trip to help bolster ance for setting up
a Pak-China Cultural
An MoU was also signed during Shahbaz’s
visit to the famous Shen Zen Industrial
economy’ Centre in Lahore. A
number of memo-
Park with a view to establish a similar
park in Punjab. During his visit to Hong
The visit to China has been successful randums of under- Kong, the chief minister said that his gov-
and will leave a far-reaching impact on the standing (MoU) were also signed for joint ernment intends to set up 50-megawatt
economy of Punjab as well as the country, ventures in steel production, coal and raw solar energy power projects in Punjab
Punjab Chief Minister Shahbaz Sharif said
on Saturday. Shahbaz was said was talking
to reporters at the Lahore airport upon
his arrival from China. He said that dur-
ing his stay in China, a number of agree-
ments were signed in the agriculture, in-
dustrial and power sectors that will prove
beneficial for Pakistan, adding that China
and Pakistan have deep-rooted relations,
which are strengthening with time. Dur-
ing his visit, the chief minister tried to
seek co-operation of Chinese investors
in agriculture, irrigation, power genera-
tion, infrastructure development, educa-
tion and the uplift of other sectors. He
also discussed setting up of an industrial
estate in Sheikhupura. During his meeting
with China’s Vice Minister for Agriculture,
Niu Dun, matters regarding construction
of new dams, drip irrigation system, pesti-
cides and increase in agricultural produc-
tion in Punjab were discussed. Prospects
for co-operation in agriculture, power
generation, infrastructure and training iron mining and wastewater management. and assured independent power produc-
of manpower were also explored. Shah- Matters regarding cultivation in desert ar- ers of Hong Kong of purchasing all elec-
baz also assured China of Punjab gov- eas of Cholistan and Bahawalpur through tricity that would be produced by them.
ernment’s full co-operation and assist- drip irrigation were also deliberated upon.
Attention
Unfortunately, at SCCI we face numerous prob- 6. Educational and Vocational Institutions
lems and thereby request Chief Minister to pay 7. Entertainment Parks
his kind attention to following as well. 8. Transportation
9. Fire Brigade Station
1. Health Care Centers 10. Drainage Facility with Filtration Plant
2. Community Centers 11. Inauguration of Motorway
3. Trauma Center 12. Sports Grounds
5. Employee Resident Colonies 13. Gas & Electricity Problems
Many Thanks
The SCCI President Mr. Manzoor Malik, Vice Presidents and Executive
Committee members have thanked to all government officials, nation-
wide chambers and associations who have congratulated us on success
of SCCI Elections 2008 and offered their full support.
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Industrial Option December 2008 | industrialoption.com
President
Mr. Manzoor Ul Haq Malik
Woman Member
Mrs. Qaisara Zulfiqar
Al-Aziz Paper Mill, Narowal Road, Muridkay
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Industrial Option December 2008 | industrialoption.com
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Industrial Option December 2008 | industrialoption.com
Event
Page
Page -- 21
21
Industrial Option December 2008 | industrialoption.com
(See Page 17) In such cases, the business initiative designed to build a computer clude Stuart Parkin, Chung Lam, Bulent
tends to either face the threat of loss of that can mimic the way the mind works. Kurdi, J. Campbell Scott, Paul Maglio, Si-
customers or of being unprofitable. mone Raoux, Rajagopal Ananthanaray-
IBM (NYSE: IBM) and five universities anan, Raghav Singh, and Bipin Rajendran.
. Substitution: People often get bored are receiving funding from a government
using a particular brand of product and agency to build a supercomputer -- but Artificial Intelligence vs. Cognitive
tend to opt for a change.The market usu- not just any supercomputer. They’ve been Computing: The goal of cognitive com-
ally has a number of similar products of tasked with building hardware and soft- puting is to engineer holistic intelligent
similar quality. So the major threat is that ware that mimics the human brain. machines that can connect huge amounts
people might try a product other than of sensory data.
yours, and eventually end up substituting “There are no computers today that can
your product with it. even remotely approach the robust and “The underlying issue driving this is that
versatile functionality of the brain,” said as computers become used for increas-
You can use two methods to grade these Dharmendra Modha, manager of cogni- ingly complex and large problems, you run
strengths, weaknesses, opportunities or tive computing at IBM Research. into some serious challenges with how to
threats, namely, pictorial and numerical. approach those problems in traditional
“The mind is a collection of mental proc- linear computational fashion,” Charles
If you opt for the pictorial way, you need esses dealing with sensation, perception, King, principal with Pund-IT , told Tech-
to first create four sectors on a writing action, cognition, emotion and interac- NewsWorld.
pad, putting the titles Strengths, Weak- tion,” he told TechNewsWorld. “It can
nesses, Opportunities and Threats in each integrate senses such as sight, hearing, “Artificial intelligence starts with a prob-
sector, and a large question mark in the touch, taste and smell. And it can act in lem -- not a question -- and then seeks to
center. Now place each of the SWOTs in a context-dependent way in real-world develop an algorithm to solve that prob-
each sector, with the most problematic complex environments in the presence of lem. Cognitive computing approaches it
factors being farthest away from the ques- ambiguity, while requiring very low power backwards; the idea is to create a mecha-
tion mark, and the better factors closer consumption and being very compact.” nism that is capable of acting like a brain
to it. The closer the display is bunched for assembling pieces of complex puzzles
towards the center of the grid, the better Cognitive computing, explained Modha, is and then speed decision making.”
the shape of your business. the quest to engineer mind-like intelligent
business machines by reverse engineering Real world applications might include a
However, if you pick the numerical meth- the computational function of the brain computer that can assemble and digest
od of assessment, you need to rate each and packaging it in a small, low-power the massive volumes of information from
item from 1 to 5 according to how im- chip. the global financial system -- and then
portant each is to your business. In this make decisions based on that input, King
rating, 5 is considered to be the most DARPA Funding: IBM and top research- said. “It is virtually impossible for a human
important. Besides, each factor should ers from Stanford University, University to make that kind of calculation.”
also be rated from A to E according to its of Wisconsin-Madison, Cornell Univer-
impact on the business, where E would sity, Columbia University Medical Center Another possibility might be an applica-
indicate the highest impact. Then, check and University of California-Merced have tion that can identify areas of the world
how many Es and 5s you end up with. If received US$4.9 million in funding from that will be affected by climate change to a
there are bad factors then you need to the Defense Advanced Research Projects much higher degree of accuracy, suggest-
change or work on them. And, if there are Agency for the first phase of DARPA’s ed King. Sensors can now be deployed by
strengths and opportunities, then it is im- Systems of Neuromorphic Adaptive Plas- the millions to measure changes in ocean
portant to build upon those factors. This tic Scalable Electronics, or SyNAPSE, ini- levels -- but there is no way to effectively
would help to boost your business. tiative. monitor and then analyze all of that data.
The research will build on the IBM cogni- On the consumer level, Modha said, it
tive computing team’s recent work with is conceivable that a small device -- an
IBM, Academics Seek to the BlueGene supercomputer: the near- “iBrain,” let’s call it -- could be developed
real-time simulation of a brain the size of to alert the user when something unto-
Create a Computer That’s a small mammal, using cognitive comput- ward happens, based on the sensory in-
More Like Us ing algorithms to develop mathematical formation it receives. For instance, a port-
hypotheses of brain function and struc- able device could monitor an unoccupied
By Erika Morphy ture. home and alert the homeowner when a
system or situation requires attention.
Besides Modha, other members of the
Computers can calculate at speeds and team include Stanford University’s Kwa-
scales that far outstrip what an ordinary bena Boahen, H. Phillip Wong and Brian
person can manage, but they still aren’t Wandell; University of Wisconsin-Madi-
anywhere near as complex as a human son’s Gulio Tononi; Rajit Manohar of
brain. IBM and five major universities plan Cornell; Columbia’s Stefano Fusi; and
to change that through a DARPA-funded Christopher Kello of the University of
California-Merced. IBM researchers in-
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Industrial Option December 2008 | industrialoption.com
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Industrial Option December 2008 | industrialoption.com
The disbursement takes 48 to 72 hours, The Prime Minister said because of Paki-
which means that Pakistan will have the stan’s pivotal role in the campaign against
money by Thursday. Pakistan, after seven terrorism and extremism, there had been
negative stereotyping of Pakistan in the
Page - 24
Industrial Option December 2008 | industrialoption.com
Article
Micro-financing: an innovative ap- and increased performance. Figure 1 illus-
trates the proposed institutional network
In its short history, micro-financing has be- Professor Yunus made the Grameen Bank
famous for micro--credit--giving small
come known as a proven tool for enabling loans to people so that they can invest in
productive assets to improve their socio-
the poor to gain a small measure of eco- economic status. Since Muhammad Yunus
nomic traction. founded the Grameen Bank in 1976, it has
provided micro-loans worth more than
Less known is the fact that the institu- mechanisms and structures are currently $4 billion to three million of the poor-
tions providing micro-financing, such as being used and can be improved upon to est rural village residents in Bangladesh.
those described in this article, can im- accrue additive benefits and accomplish Grameen’s borrowers, 95 percent of
prove their own performance as well. a sustainable growth model for both the whom are women and mostly illiterate,
These authors have written an excellent borrowers and microfinance institutions? have helped make the bank profitable by
informal case study that highlights the This article attempts to answer these maintaining a 98 percent loan repayment
very significant benefits that flow to both questions by referring to the best struc- rate.The Grameen Bank has become a to-
borrowers and lenders in a micro-financ- tural practices adopted by two pioneering tally self-financing operation that stopped
ing relationship. microfinance institutions--Grameen Bank accepting donor contributions six years
of Bangladesh and Self-Employed Women ago. Expanding beyond micro credit,
In September 2000, the United Nations Association (SEWA) of India--that have Grameen Bank has explored an emerging
unanimously adopted the Millennium De- helped them manage and implement their trend for eradicating poverty by develop-
velopment Goals to alleviate poverty and changing roles, activities, portfolios, and ing business-social ventures. For example,
its derivatives, such as the need to achieve responsibilities over the years.These insti- Grameen’s first business-social venture
universal primary education, promote tutions have been transformed from pro- evolved as Grameen’s Fisheries and Live-
gender equality and empower women, viders of micro-credit to the impoverished stock Foundation, a joint venture with
combat deadly diseases, reduce child
mortality and improve maternal health, Professor Yunus made the Grameen Bank
and ensure environmental sustainability.
Microfinance (1) institutions (MFIs), for famous for micro--credit--giving small loans
example, banks, non-government organi-
zations (NGO), and government agen-
to people so that they can invest in produc-
cies, are one such vehicle used to achieve
these goals. By far, microfinance has been
tive assets to improve their socio-economic
able to provide financial and non-finan- status.
cial services to the “unbankable” (poor
or marginalized) to not only establish fi- to developers of business-social ventures local farmers, whereby the latter used
nancial independence, but also reap the and providers of support programs and their farming expertise to fertilize the
benefits of added income and work secu- non-financial services. Using the social fishponds. Grameen, in turn, gives farmers
rity, food security, and social security (at network (2) theory, we propose an insti- the technology and training they need to
least health care, child care and shelter). tutional network model based on existing practice sustainable fish farming and live-
According to Nobel Prize Winner, Profes- structural models used by Grameen Bank stock husbandry. As a result of the equal
sor Muhammad Yunus, microfinance is a and SEWA. This innovative model will de- partnership, 4,000 farmers created small
“social business” that “creates economic velop optimal social channel capacity that enterprises not only in fishing but also in
and social development from below.” may allow both clients (borrowers) and dairy farming, production of biogas from
However, one of the legitimate questions microfinance institutions to effectively animal manure, forestry, and agriculture.
asked at the most recent United Nations manage relationships while systematically
Global Compact and Academy of Man- disseminating and assimilating essential More recently, Grameen Bank made the
agement Conference at Case Western knowledge and information and hence, leap from rural banking and agricultural
University (2006) was that if, presum- reap maximum benefits. Furthermore, the enterprises into high technology with the
ably, microfinance has reached a tipping model can be imitated by other develop- ‘GrameenPhone’ venture. It has grown
point, what else can microfinance institu- ing organizations as it may assist them to to be the largest cellular phone company
tions do to help the impoverished while understand how institutional boundaries in all countries in south Asia, with more
enhancing their own performance? What can be extended to experience growth than one million subscribers in Bangla-
Page - 25
Industrial Option December 2008 | industrialoption.com
desh, and has earned after-tax profits of 1972. It is an organization of poor, self- springboards for several trades associa-
about US$50 million in 2002. The “phone employed women workers (unprotected tions:
ladies” that resell airtime bought in bulk and unorganized labor force) who earn
by GrameenTelecom, earn an average an- a living through their own labor or small (1) hawkers, vendors and small business
nual income of US$800, an amount that businesses. SEWA recognizes the need women,
is twice Bangladesh’s per capita annual for supportive services like savings and
income. credit, health care, childcare, insurance, (2) home-based workers like weavers,
potters, bidi (cigarette) and agarbatti (in-
The progression and succession from cense) etc.,
a microfinance bank, from providing (3) manual laborers & service providers
in agriculture, construction, etc. and
micro-credit to the poor to a social (4) producers who invest their labor and
enterprise, is largely attributable to capital to carry out their businesses, for
example, agriculture, cattle-breeders, salt
the women stakeholders. workers, cooking, etc.
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Industrial Option December 2008 | industrialoption.com
ing and potential problems, and augment the common and private good of all fo- by microfinance institution as the prime
business growth Simply put, cohesion, den- cal networks in diverse industries and for connector. The structural holes that ex-
sity, and strength of relationship between microfinance institutions, which, because ist in the principal networks permit the
administrative hub and actors within the of the broad information base attained microfinance institution to collect non-
focal network are likely to encourage ef- from the diverse sources, will remain well redundant, critical information of plausi-
fective communication, cooperation, and informed of opportunities and impending ble bottlenecks and interventions used by
the sharing and exchange of information. disasters (access benefits) and hence de- different focal networks, and to dissemi-
Prolonged positive impact comes from termine their own future direction. It will nate the gathered information to others
the development of trust and, and in turn, also encourage microfinance institutions within the principal network, reducing du-
social capital. Network intensity develops to act as connectors to build coopera- plication of resources and learning curve
over time but the benefits may be reaped tive relationships among different focal effects. A caveat here is that as focal net-
for years to come. However, there may networks. For example, if microfinance works belong to different industries, the
be drawbacks associated with cohesive institutions ascertain that a new opportu- learning implications of one industry may
and dense networks.These include rivalry nity is created in one of the focal groups, not be carried over to another in totality.
and negative conflict within the network, which may be catered to by the skills of Nevertheless, with amendments, private
which may have severe repercussions for another focal group, they can connect synergies can be attained.
business development and harmony. them appropriately (timing and referral).
Furthermore, eruption of lateral linkages We hope that this article will offer new
Principal Network among independent focal networks can insights for future policy makers. First,
give them the opportunity to share com- the social institutional network proposed
Paralleling the board of directors of the plementary skills, allowing for economies confirms that development should be
Grameen Bank and the executive council of specialization. This reduces duplication grounded in the social, cultural, and eco-
of SEWA, the advisory principal network of time and effort, costs, and relational nomic needs and priorities of the society.
should be comprised of the administra- risks that focal networks may otherwise This highlights the importance of the bot-
tive hubs of the individual focal networks independently experience. tom up approach and in turn, ensures that
and the respective microfinance institu- microfinance institutions have a stake in
tion, which may be considered the hub Even though focal networks may be con- the future of their business commu-
of the principal network. Hub may be sidered the backbone of the institutional nity. Both the Grameen Foundation and
considered as the key actor, the triggering network, the principal network is the in- SEWA acknowledge and appreciate that
entity, and/or the strategic center, and is terface of the institutional network. The the best development ideas come from
likely to possess prominence and power, role of the principal network, in general, the clients themselves. Second, the non-fi-
gained through individual attributes, and is to enhance reputation, lengthen the nancial services and support packages of-
from the knowledge and information shadow of the future, and build multiplex- fered by microfinance institutions would
achieved through their presence in their ity within the institutional network. Thus, create a skilled working class and improve
respective external networks and their representatives from the principal net- the quality of labor and their access to
affiliations with other world organiza- work should seek legitimacy and recogni- productive resources. Third, the methods
tions. This would allow them to earn a tion within the country and microfinance and technical services employed should
central, advisory position in the principal community at large by attending and par- be simple so as to reduce the demand for
network structure and subsequently, per- ticipating in conferences, developing and highly skilled labor and management for
form a leadership and governance role in promulgating programs and initiatives, the project to attain self-sustainability. Fi-
pulling together dispersed resources and and maintaining transparency at the net- nally, the feedback mechanism developed
capabilities of network members i.e. focal work level. They should also build robust could be used to educate future clients
networks. Formal institutionalization is strategic alliances with other similar insti- to operate and function more efficiently,
decisive for its success. tutions and government agencies. subsequently allowing the next batch of
clients do better and follow economies
Network’s goals and objectives Network characteristic of scale. The focal and principal networks
can eventually build up business alliances
It is fundamental that the representative As in focal networks, principal networks where the buying and selling power of
of the focal networks and their respec- are also likely to consist of formal cen- borrowers gives them social power as
tive microfinance institution meet peri- tral linkages between microfinance insti- well. In short, this symbiotic relationship
odically, at least once every quarter, for tutions and focal networks, and informal not only improves the socio-economic
the former to submit and share progress lateral linkages among focal networks. status of the poor but also augments the
report, goals and achievements, current The former may be characterized as performance of microfinance institutions
endeavors and work in progress, and strongly connected, dense networks with for them to attain sustainability.
future aspirations. More specifically, indi- structural holes, as this would allow most
vidual focal networks can share informa- appropriate implementation of network
tion about the obstacles and hindrances goals and objectives. The latter are likely
their businesses experience, the solu- to be sparse with weak connections. For
tions and interventions to the problems, example, due to the prevalence of indus-
the results achieved pertinent to their trial diversity in this network, the actors
respective industries, and their growth are mostly disconnected, dispersed, and
strategies and tangents. This may be for share only weak ties but are held together
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Industrial Option December 2008 | industrialoption.com
Debate
On Financial & Economic Crisis
Sponsored by Sheikhupura Chamber of Commerce & Industry (SCCI)
Questions &
Pointers
“The ‘financial crisis’ is not confined only to the have left many countries fiscally vulner-
able
United States. As economic turmoil spreads to glo-
bal markets, world leaders are reacting to the U.S. Question: How Poor and middle-in-
come countries are helped to limit
“bailout plan”. Stock markets around the world the damage and prepare for recov-
have plummeted and fears of a global recession are ery.
Pointer 1: Drawing on international as-
increasing. sistance where necessary
Question: Do you think that the fi- a projected 6.4% Pointer: 2 Investing in infrastructure and
nancial crisis is spreading rapidly to Pointer 2: Private capital flows are ex- safety nets
the previously resilient developing pected to drop from $1 trillion in 2007 Pointer 3: Continuing to improve their
world? to $530 billion in 2009 business climate and attract investors
Pointer 1: Global trade is forecast to Pointer 3: Remittances that workers send
shrink in 2009 for the first time since to home countries are projected to de- Question: Do the Global problems
1982 cline call for multilateral solutions?
Pointer 2: Foreign investment and short-
term credit are drying up Question: What is the reason that Pointer 1: Leaders need to craft policies
Pointer 3: Developing country exports Before the financial crisis hit, many that bring more countries into the eco-
are falling; large amounts of capital have countries were already suffering a nomic mainstream
been withdrawn food and fuel crisis? Pointer 2: Opportunities and responsibili-
Pointer 1:100 million people have fallen ties for the new global economy must be
Question: Why Many developing into extreme poverty, according to Bank shared
countries face sharply tighter credit estimates Pointer 3: The international community
and higher interest rates? Pointer 2: Another 44 million children are needs to look beyond financial rescue to
Pointer 1: GDP growth in developing malnourished the human side of the crisis
countries is expected to fall to 4.5% from Pointer 3: Measures to offset rising prices
SEND COMMENTS TO: EMAIL & BLOG:
Sheikhupura Chamber of Commerce & Industry Blog: http://blog.scci.net.pk
23-KM, Lahore Sheikhupura Road, Qila Satar Shah, Sheikhupura Email: debate@scci.net.pk
Phone: 042-7971367 Fax: 042-7970667 Website: http://www.scci.net.pk
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I am happy to
be sacrificed!
Now more than ever in Sheikhupura district, our neigh-
bors, co-workers and friends are living on the edge –
some for the first time in their lives. Trapped between
layoffs, foreclosures and skyrocketing costs for basic
needs, families are struggling. This is the time for the
Sheikhupura Industrialists & Business Community to
come together.
Donate Generously to People
arround you! Help them to
recover from poverty.
Do not miss the opportunity on the festival of Eid -ul-Adha
1. Manzoor-ul-Haq Malik
Affidavit
We, The promoters and signatories of Memorandum & Articles of Association of The Sheikhupura Chamber of Commerce &
Industry 6 out of total 8 members , a body corporate registered u/s 42 of the Companies Ordinance 1984, do hereby solemnly
declare & affirm;
1. That the Chamber has submitted form 27 and 29 dated 14-04-2008 has properly been tendered after the election has
held.
2. That new appointments of Secretary, Auditor, Legal Advisor, Corporate Advisor and Chief Accountant were made after
the cessation of the old appointment.
3. That all the matters of the Sheikhupura Chamber are running smoothly and we are satisfied with its working.
4. That in one year’s time, the membership has arisen to 182 members in associate class and 66 in corporate class. The
membership is open and business community in approaching for new memberships.(List of Members attached)
5. That the AGM held is December 2007 has approved 23 KM Lahore Sheikhupura Road Qila Satar Shah as its registered
office. Office at Kot Abdul Malik was temporarily kept for receiving post etc was closed. Now there is only one office of
the Chamber at the above address having telephone # 7971967 Fax # 7970667, Web Site: www.scci.net.pk, Email as
Info@scci.net.pk. Bank a/c # 1464 Bank of Punjab Kot Abdul Malik Branch. SECP has been informed through form 21
which is a legal tender. There is no ambiguity in it.
6. That the Chamber has again held the election for the year 2008-09, the result of which in shape of office bearers and
E.C. members is also attached.
7. That all the paragraphs above are correct to the best of our knowledge & belief. Nothing is incorrect and nothing has
been concealed.
Deponents
1. Malik Manzoor-ul-Haq 4. Mian Farooq Ahmad
CNIC# 3520278739393 CNIC# 3520295174463
23-KM, Lahore – Sheikhupura Road, Sheikhupura, Sheikhupura 12-KM, G.T, Road, Sheikhupura
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Industrial Option December 2008 | industrialoption.com
1 Mohammad Tariq Iqbal Mughal Achievement Award Mughal Steel Mill Pvt Ltd
2 Ch Mohammad Arif Agri and Pesticide Ch Stone Crushing
3 Amjad Nazir Butt Agro & Food Process Al Madina Trading Co Skp
4 Mehmood Sami Petroleum Sami Sons
5 Ch. Nadeem Safdar Soap and Detergents Model Soap Factory
6 Rab Nawaz Dyes and Chemicals Ahmad Jannat Enteprises
7 Sabir Pervaiz Miller Industry Seena Grinding
8 A.R.Khan Customs & Import Super Thermax
9 Shahid Saeed Pasha Chemical Processing Premier Chemical
10 Haji Maqsood Gems & Jewelry Maqsood Jewelers
11 Malik Manzoor Industrial Services Industrial Option
12 Sheikh Naveed Anwar Stainless Steel Industry AHN Steel
13 Muzaffar Ahmad Board Industry Malik Board & Paper Mill
14 Haseeb Haroon Collides AHN Collides
15 Mohammad Saleem Butt Pharmaceutical Ameer Pharama
16 Amir Bakhat Azam Cable Industry New Age Cables
17 Tariq Iqbal Mughal Trade Delegation Mughal Steel Mill Pvt Ltd
18 Mian Farooq Ahmad Pipe Industry Jamal Pipe Industry
19 Ms Qaisra Zulfiqar Women Entrepreneur Al Aziz Paper Mill
20 Mian Muhammad Sanaullah WAPDA Dispute Resolution National Pipe
21 M. Waseem Asharaf Rice Export Waseem Traders
22 Sheikh Abdul Hafeez District Government S. Abdul Ghafoor & Sons
23 Imtiaz Asharaf Aulakh Social Welfare Aulakh Commission Shop
24 Syed Abid Shah Education Philanthropist
25 Ali Abbas Chemical Yarn RN Rayon
26 Mohammad Rashid Open end Industry Model Spinning
27 Lala Abdul Waheed Health Usman Traders
28 Khalid Zaman Toor Rice Research Crystal International
29 Malik Mohammad Yusaf Sales Tax InterPack
30 Shehzad Ali Nagina R & D / NGOs Mandiali Paper Mill
31 Abid Mehmood Butt Building H.M. builders
32 Amir Bakhat Azam Environment New Age Cables
33 Ch Mohammad Arif Law & Order Ch Stone Crushing
34 Amjad Nazir Butt Chamber News Al Madina Trading Co
35 Suhail Iqbal Mian Membership Growth Muhammad Iqbal Hussain & Brothers
36 Manzoor Ul Haq Malik Liaison Industrial Option
37 Kamran Khan Pulp & Paper Flying Paper Mill
38 Ch. Mohammad Sadiq Business Dispute Resolving Insha Industries
39 Khalid Taj Sui Gas+ CNG Taj International
40 Mian Shahabul Khan Court Matters Qadria Board
41 Malik Mudassar Public Relation Falcon Packages
42 Khawaja Tariq Packaging( Tin Corrugation ) Ayub Packages
43 Aamir Match Industry Fazal Match Industry
44 Muhammad Younas Shoe Industry Rightway International
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Industrial Option December 2008 | industrialoption.com
Event
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Industrial Option December 2008 | industrialoption.com
Event
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Industrial Option December 2008 | industrialoption.com
Event
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Industrial Option December 2008 | industrialoption.com
Felicitation
Welcome
Sheikhupura Chamber of Commerce & Industry wel-
comes all Chambers, Trade Organizations, associa-
tions on the completion of successful elections and
to those at winning end. SCCI hopes for a better busi-
ness and Industrial Cooperation as it is important to
working in cohesion for the growth and development
of Pakistan.
SCCI office-bearers felicitate Mian Muhammad Idris of Sitara
Chemicals Industries Ltd. as Chairman Standing Committee on
Industry in FPCCI
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Industrial Option December 2008 | industrialoption.com
The Islamic festival of Eid Al-Adha, or On the tenth of Dhul Hijjah, pilgrims in a camel. The more beloved and dear the
“Festival of Sacrifice” follows close on the Mina, Saudi Arabia, sacrifice an animal for animal is to its owner, the more meaning-
heels of the first Eid festival of the year, the sake of Allah. On the same day, Mus- ful will be its sacrifice.
“Eid Al-Fitr”. lims elsewhere in the world celebrate the
festival of Eid Al-Adha, in which those who This animal should be taken care of, fed
The Arabic word “Adha” means “sacri- can afford to, also sacrifice an animal to well, respected (it should not be harmed,
fice”, having its root in the word “duha”, gain Allah’s pleasure, embodying the sacri- or ridiculed in any manner) and nurtured
which also means “light” or “illumina- fice made by Prophet Abraham [peace be until the time of sacrifice. Alternatively, if
tion”. upon him] when he was ordered by Allah the Muslim can not afford a separate ram
in his dream to sacrifice his son Ismael or goat for himself (or herself), scholars
After Ramadan, the month of Shawwaal [peace be upon him], to which he com- have allowed 7 Muslims to share in one
ensues, in which most Muslims fast 6 days. plied. His spirit of unflinching submission cow.
This month is followed by Dhul Qa’dah, to Allah is epitomized every year as Mus-
which is the month in which most of the lims indulge in a similar sacrifice. Gain knowledge of the sacrifice rit-
Muslims who intend to perform Hajj, ual:
start their preparations for the trip, and Eid Al-Adha is celebrated in more or less
eventually reach Saudi Arabia. After the the same way as Eid Al-Fitr, except that an Muslims should be well-aware of the cor-
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Industrial Option December 2008 | industrialoption.com
- The sacrifice should be performed dur- it is cut up, it will remain in the veins in- done in the home verandah or courtyard,
ing the day-time, not at night. side the meat, thus rendering the meat or in a neighborhood ground. In Muslim
“haraam” for consumption. countries, animals are slaughtered every-
- The knife to be used to cut the animal’s where, from the roads to the streets. In
throat should be very sharp, so much so - For larger animals such as cows and non-Muslim majority countries, however,
that the least amount of force or pres- camels, only expert butchers should try animals can only be sacrificed at designat-
sure is needed to slice the animal’s jugular to slaughter them on Eid Al-Adha, and ed places, with prior permission.
vein, so it feels the least amount of pain should be booked well in advance. It has
when its skin is thus cut. been noted that when inexperienced peo- If, for some valid reason, the sacrifice can
ple try to slaughter these large animals not be performed on 10th Dhul Hijjah, it
- The knife should not be shown to the themselves (as expert butchers are very may be performed on the 11th or 12th
animal, but the latter should be fed well busy on this Eid), the latter get scared and (the days of stay in Mina for the pilgrims
and laid down facing the direction of the become difficult to tie down and subdue, in Saudi Arabia). The reward will diminish
“Qiblah” (Muslim direction of prayer - at times dashing off, causing injuries and with each passing day, though.
the Ka’ba) in Makkah. harm.
Eat from the meat:
- The person who will perform the sac- Go for Eid prayer after the Fajr
rifice should be well-versed in their job, prayer: A variety of delicious meat dishes await
and should not hurt the animal by clumsily the Muslims on Eid Al-Adha! No sooner
jabbing away at the latter’s throat with a This prayer is performed exactly the than the meat reaches the kitchen, that
blunt knife, causing pain and fear. The one same way as for Eid Al-Fitr. The entire the appetizing aroma of mouth-watering
performing the sacrifice should be swift household awakens early and takes a full delicacies starts wafting from it.
and deft. He should say “Bismillah Allahu bath or ghusl, putting on new clothes and
Akbar” before slicing the animal’s throat. proceeding to the Eidgah or open prayer- The recipe served immediately for break-
The owner of the animal should recite ground, for the early-morning Eid prayer. ing the short 10th Dhul Hijjah morning
the following dua (invocation) before the The whole family should attend this fast, is “kaleji” (roasted mutton or beef
sacrifice (translation): prayer, reciting the following “takbeer” all liver) with naan-bread or paratha.
the way:
“Indeed I turn my face towards The One For lunch and dinner, main courses of
Who originated the heavens and the Allahu Akbar Allahu Akbar - Allah is the mutton biryani, pulao, beef nihari, qorma,
earth; upon the way of Abraham, the un- Greatest, Allah is the Greatest! and shami kababs are extremely popular
swerving one, and I’m not of those who in the Indo-Pak region.
commit shirk [polytheism]. Indeed my Laa ilaaha illallaahu Allahu Akbar - There
salah, my sacrifice, my living and my dying is no god except Allah, Allah is the Great- Gift meat to relatives and neigh-
is for Allah, the Sustainer of the worlds. est! bors:
There is no associate with Him, and so I
have been commanded, and I am from the Allahu Akbar wa lillaahil Hamd - Allah is Muslims send fresh meat to neighbors,
ones who submit. O Allah! (This sacrifice) the Greatest and for Allah is The Praise! relatives and friends as a sign of sharing
is from me, for You.” The Eid prayer is a couple of units or and caring throughout the three days of
rak’ah’s, followed by a sermon, or khut- Eid Al-Adha.
- The animal dies due to loss of blood.The bah, by the imam (in some schools of ju-
blood should be allowed to drain com- risprudence, the sermon precedes the Eid Give meat to the poor and needy:
pletely from its body before it is skinned, prayer).
disembowelled and chopped. This takes It would not be an exaggeration to say
a good half-hour or so. The test to see The one major aspect of this Eid is not to that in most developing Muslim countries,
whether the animal’s blood has drained eat anything on 10th Dhul Hijjah until the the poor Muslim populace gets to each
is to touch the animal’s body; if it is still meat of the sacrificial animal is cooked, meat just once a year - on Eid Al-Adha.
warm, it means the blood has not drained and to partake from it as the first morsel The spirit of charity runs high as every
completely. of food for the day. The Prophet Muham- Muslim who sacrifices an animal is ea-
mad [may peace and blessings of Allah be ger to share their meat with their poor
- It is absolutely forbidden to start skin- upon him] would thus fast from morning brethren. Some better-off families go as
ning and cutting the animal when it is till the sacrifice, and break his fast with far as dedicating several animals solely for
still alive or writhing. Some butchers, es- the meat of the animal. This fast is not feeding the poor and hungry on the three
pecially the amateur ones, who want to compulsory; it is a sunnah of the Prophet days of Eid.
make the maximum amount of money on Muhammad [may peace and blessings of
Eid Al-Adha by slaughtering as many ani- Allah be upon him], and is thus highly rec- It is heartening to witness the spirit of
mals as possible, commit grave errors in ommended. sharing and giving on this Eid, as no Mus-
the process of slaughter. They should not lim goes hungry during the tiring but joy-
be allowed by the animal-owners to thus Perform the animal sacrifice as soon ous days of Eid Al-Adha!
abuse the animal. Moreover, it is imper- as possible after returning home
missible for Muslims to consume blood from Eid prayer:
in any form. If the blood has not drained After the family returns home, the ani-
from the animal’s body completely before mals should be sacrificed. This can be
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Industrial Option December 2008 | industrialoption.com
Dilemma
Dissection of Pakistan
?
Public worried for their economic survival
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http://www.scci.net.pk