The PFBA Director Finance Mr. Riaz Siddiqui presented the sixth set of audited accounts for the year ended December 31, 2019 as a corporate entity registered with the Securities & Exchange Commission of Pakistan (SECP) under Section 42 of the Companies act, 2017 limited by guarantee.e.
Mr. Raiz Siddiqui explained that the Accounts for 2019 were straightforward and there were no questionable amounts under the various heads, which were questionable. Net income generated from holding the Trade Performance Awards amounted to Rs 1.20 Million and yearend balance sheet footings stood at Rs 3.40 Million.
He however cautioned the members that going forward we can see a strain on our balance sheet if timely corrective measures are not taken e.g. imperative we increase our membership numbers, as there was depletion in the membership in 2018-19. He rightly pointed out that member subscription are main source of liquidity and attrition of members needed to be stemmed ASAP. He further pointed out that present membership stood at 110 down from 164 three years ago.
Director Finance further pointed out that from next year i.e. 2020, PFBA will relocate to new premises consequent to PFBA’S Lease expiry in December 2019. New and decent premises have been identified on Khayaban-e-Nishat, DHA Phase 6. The rent is Rs 1.20 million per annum. This expense will certainly burn a hole in PFBA’S profitability but we will renegotiate the rent with the landlord well before the lease expiry date as rentals have depreciated following the lockdowns, retrenchment etc.
Before presenting the annual report Mr. Jamil Hamdani, Chairman/CEO welcomed the members on sixth AGM of PFBA in difficult circumstances resulting in the resorting to the Zoom application for video conferencing. This demonstrates our determination to fulfill the constitutional requirement as mandated by the Regulator namely SECP.
As always, the Chairman/CEO talked about the economy. He said that the present government would be completing its 2 years in office in a couple of months. The Economic challenges before it were/are daunting. Pakistan was facing a critical economic situation characterized by high budget and current account deficit. The country faced aggravating structural problems: limited mobilization of internal fiscal resources, lack of diversification in economy, weak competitively, unattractive business climate, energy crisis, and lack of willingness on the part of the Government to competently and courageously restructure the public sector companies (SOE’S) which were a strain on the exchequer.
He added that the rapid deterioration of external balance led to a collapse of foreign exchange reserves and increased our dependence on foreign lenders. The total debt increased to a staggering 78% of GDP in 2018-19. The external debt reached 36.9 % of GDP at the end of 2018-19 fiscal year. After 5.5 % in 2017-18, the growth in GDP slowed down to 3.3 % in 2018-19, the lowest since 2009-10. It was expected to be 2.4 % in 2019-20 if the Covid-19 crisis had not happened. By the time the fiscal year comes to an end, we just might end up having a negative growth rate. The slowing down of the economy, accompanied by high inflation are not good signs for our struggling economic environment. Inflation is projected at 11.4 % in 2019-20 after 7.3 % in 2018-19 and 3.9 % in 2017-18.
He further added that Pakistan’s economy has always been considered vulnerable to all shocks whether natural disasters, regional tensions, rise in oil prices etc. This time the shock has come in the shape of Covid-19 pandemic. The Covid-19 pandemic is expected to have a far-reaching negative impact for Pakistan’s economy. The number of people living below the poverty line might get doubled to 125 million from the existing figure of 50/60 million. According to Pakistan Institute of Development Economics, the number of unemployed because of Covid-19 might be standing at 19 to 20 million. The tax collection is negatively affected, resulting in huge revenue losses. Before the Covid-19 crisis, we were in an Economic Recovery mode. Now we are in a Disaster Management mode.
Owing to time constraints, the Chairman addressed the main objective of PFBA as a bilateral business forum--, which is the promotion of trade and investment between France and Pakistan. Before the Covid-19 crisis adversely impacted our activities since March 2020, we maintained our usual schedule. PFBA held its 3rd Trade Awards ceremony on November 29, 2019, with His Excellency Mr. Marc Barety, the Ambassador of France to Pakistan as the Chief Guest, and Mr. Mehmood Bhatti French Designer from Paris, who came specially to Pakistan for the occasion, as Guest of Honor.
More recently, he mentioned that as a CEO of PFBA he participated on 12th May 2020 (as a reticent observer), in a Video-conference with MEDEF (The French Business Confederation), Embassy of Pakistan in France and the Economic Department of the Embassy of France in Pakistan; for discussing the trade and business scenarios between Pakistan and France in the context of Covid-19 crisis in both countries. The conference concluded that both countries should continue to strive for the identification of trade, business and investment opportunities between Pakistan and France in order to develop the bilateral economic relations by adapting ourselves to the changed situation.
In the question / answer session the Deputy Chairman/ Deputy CEO Mr. Saeed Alawalla asked the Chairman to elaborate on the May 12, 2020 MEDEF video conference. The Chairman responded that as he was a silent attendee (not as a participant) he will request H.E. the Ambassador to dwell on this particular during his address.
In his address, H.E. Marc Barety expressed his satisfaction that the PFBA had kept up with its tradition of acknowledging the performance of the leading exporters and importers from our two countries. Mr. Ambassador pointed out that despite a decrease in the volume of the bilateral trade last year; it was still crossing the symbolic threshold of one billion Euros. He said that that the Trade Awards ceremony was a testimony to the role-played by the PFBA in promoting the trade between Pakistan and France. He further said that the Embassy of France in Pakistan would continue to extend its full cooperation to PFBA for promoting and enhancing economic and commercial relations between the two friendly countries.
The Ambassador said the balance of trade between France and Pakistan was in favor of the latter. This gap can only be narrowed if Pakistan was to improve and broad base the quantum of its value added export products besides the traditional home textiles, leather goods, sports goods and surgical instruments. The French market is highly sophisticated and will import only the best products. Therefore, if Pakistan wishes to penetrate the fastidious French buyers then it is imperative it improves the value added ‘end product’ to entice the French buyer. It is an established norm that quality determines price and if the quality is superior, the buyer has no hesitation in buying that product. Should this happen and for sure it can happen because the Pakistani exporter has the willingness and capacity to bring about the much needed change resulting in the trade gap between France & Pakistan to narrow and boost our trade figures.
He further added that MEDEF international delegation that came to Pakistan April last year gave the encouraging signal concerning the development of economic and trade relations between France and Pakistan.
With regard to the MEDEF International Webinar conducted on May 12, 2020, the Ambassador pointed out the fact that both sides have taken many positive initiatives, but their implementation has been impeded by the COVID 19 pandemic. He further added that to boost the business climate in France, following the devastation by COVID-19, The French Government has given an impetus to the domestic economy by injecting Euro 110 billion in the economy (nearly 5 percent of GDP, including liquidity measures).
To wrap up the meeting the PFBA Deputy Chairman \ Deputy CEO Mr. Saeed Allawala presented a vote of thanks with special gratitude to H.E Mr. Marc BARETY and Mr. Didier TALPAIN for their support towards PFBA and conveyed his best wishes for their future.