News flash for the Filthy Rich of Pakistan

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Question -Why has Pak economy never taken off in 63 years? Answer -We don’t encourage the culture of entrepreneurship and venture capitalism in our economy By Fareeha Qayoom

Question -Why has Pak economy never taken off in 63 years? Answer -We don’t encourage the culture of entrepreneurship and venture capitalism in our economy

By Fareeha Qayoom

A

dnan (my younger bro) thinks there is loads of rich folk hiding in the woodwork in Pakistan. I always take the opposite view on this issue because a) I like to play the devil’s advocate,  b) I like to debate and may take the opposite view even if I personally don’t agree with it for the sake of argument!, (Yes, I like to be difficult and contrary!) and c) because I don’t see the so-called rich folk flaunting their hard-earned wealth on the roads, in the shops or indeed in the local economy – my point, our rich folk might be rich on our terms but they are only the middle class when compared with the world’s international standards of wealth or with the seriously wealthy folk in the developed countries. We have only Mian Muhammad Mansha – the one and only documented wealthy Pakistani that made the grade internationally (Forbes list) and that too for the first time in year 2010! (Most Pakistani rich unlike him, like to keep a low profile – probably to evade taxes and needy relatives!) By the way, India (1947-present) has dozens; one in the top ten of the world – need I say more?

Caffè Latte at Gloria Jeans
Photo by ak37
Adnan usually points to the SUV’s, BMW’s, and Mercedes Benz etc on our roads to support his view, I point to various Honda and Corolla cars to support mine. Most so-called rich folk might have three to four Honda or Corolla’s on the roads, or couple of four-wheel drive jeeps and one luxury car hidden somewhere in the garage but the fact remains the majority of middle class drives Honda-like or Corolla-like cars in the developed countries, or buys clothes from stores like Selfridges, Zara, Next, Mother Care, Gap, Macy’s or Bloomingdales or regularly eats at international food chains equivalent of or like Gloria Jeans Coffees, Subway, Hardees, KFC, McDonald’s, Dunkin Donuts etc in their economies for that matter!

Not that I am knocking Adnan’s theory. Our seriously rich folk are either a) hidden in the woodwork or b) they are seriously lazy or c) they are not actually seriously rich – it’s a facade. You decide.

Most rich folk in the developed world make their money work for them; they invest in new ventures, have this hedge fund going here, that mutual fund over there, might have ten fund managers working for them investing here, there and everywhere, managing and multiplying their wealth or have their fingers in diverse financial pies spanning industries, however, our rich on the other hand, can only siphon off their spare cash and keep it hidden in foreign bank accounts!

Living off your interest doesn’t multiply your wealth (it only keeps your capital safe) – Ask any economist! – making smart investments on timely innovations multiplies wealth (Remember the original Levi’s Strauss? He didn’t invent Jeans. He invested in the guy who invented Jeans! :))  which the banks do with your money all the time – (they can also afford to write off a few bad investments – that’s the nature of risk – mostly they bet on sure thing after due diligence and hedge their risk by lending against securities and collateral). I don’t see any venture capitalism, or serious entrepreneurship going on in our part of the world. In fact, our so-called entrepreneurs actively seek out the young innovative and creative minds and either a) grind their brilliance into dust or b) help them make their minds up to migrate to greener pastures – yes, you guessed it, USA, Canada, Australia, or Europe – this is popularly termed as ‘brain drain’ – our best minds run away to help the developed world’s financiers multiply their wealth while we keep lamenting on our lack of skilled people!; or c) help them become merely mediocre to survive in this economy.

Majority of our rich folk might buy excessive real estate, dabble in currencies, or buy a few imported luxury cars, designer clothes, exotic vacations, foreign education and shop till they drop but by and large, all this behavior just tells you that either a) they have visions of grandeur or b) they like living beyond their means or c) they are living off borrowed wealth (ill-gotten gains acquired through corruption!) or d) they are second or third-generation wastrels and living off the wealth made by the first generation! People in the business of making money don’t behave like that. They behave like Mian Mansha. Unfortunately, we don’t have enough Mian Mansha-like people willing or able to pull this economy through its boot straps. We need entrepreneurs and venture capitalists. Hello, are you listening? ■

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Fareeha Qayoom
Fareeha Qayoom
Publisher and editor-in-chief of Tkfr.com and former print editions of The Knit-Xtyle Fashion Review (tkfr), a trade newsletter for the textile and apparel industry of Pakistan. In short, Publisher, editor, and a blogger. In addition, she has served as Managing Editor of MIT Technology Review Pakistan, print and web editions (2015-16). Total of 7 editions were published under her leadership by ITU, Punjab's first public technology university under the license of MIT Technology Review (USA). She has also managed Value Mag in the same capacity, a real estate and lifestyle magazine for Value TV - 2008-9. Published freelancer for The News on Sunday 1994-96. Fareeha has over 21 years of solid management experience – of managing brands (like Harley Davidson, Munsingwear, Chaps, Chaps Ralph Lauren etc.,), Retailers (like Target, Mervyns, Kohl's, Marks and Spencer etc.,), customers (VPs, Product Managers, Unit Managers, and Buyers), and products (apparel - woven, knits, men's, women's, children's, Print and online publishing units), projects, teams, and processes, information, content, and data, staff, vendors, and time. Versatile and adaptable with international exposure, communication and language skills (oral and written), and a consistent track record of achieving company targets and objectives, plus a MA in Political Science from Punjab University, a MSc in Economics from La Salle University, Louisiana, USA, and a BA in Economics from Kinnaird College for Women.

9 Comments

  1. More Reading?

    Who are the ten richest people in Pakistan?
    1 – Mian Muhammad Mansha Yaha Pakistan
    Ranking: 1 Worth: £1.25b ($2.5billion) Industry: Businessman
    Mansha has around 40 companies on board. Mansha, who owns the Muslim Commercial Bank is also setting up a $ 17m paper mill. He is one of the richest Pakistanis around. Nishat Group was country’s 15th richest family in 1970, 6th in 1990 and Number 1 in 1997. Mansha is on the board of nearly 50 companies. He is deemed to have made investments in many bourses, currency and metal exchanges both within and outside Pakistan . He could have bought the United Bank too, but then who doesn’t have adversaries. Nishat Group comprises of textiles, cement, leasing, insurance and management companies. If Mansha was bitten by Bhutto’s nationalization stint of 1970, his friends think he was compensated by Nawaz Sharif’s denationalization programme to a very good effect. There is no stopping Mansha and he is still on the move.
    Nishat group assets are $4.4Billion. He is sometimes even regarded as the richest Pakistani around by his friends claiming he does not “show it off”.

    http://wiki.answers.com/Q/Who_are_the_ten_richest_people_in_Pakistan

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  2. Friday, April 2, 2010
    Top 30 Richest Pakistanis List 2010
    Top 30 Richest People of Pakistan List of 2010
    Here is a list of richest people of Pakistan including individuals and families. It is a very hard task to arrange an exact list of richest Pakistanis, as many rich Pakistanis don’t want to disclose their assets. Here we are giving the names of only those Pakistani’s who have declared their incomes and assets to the Government of Pakistan. This list includes many well known business tycoons, industrialists and Politicians.

    http://khula-raaz.blogspot.com/2010/04/top-30-richest-pakistanis-list-2010.html

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  3. The Top 20 Billionaires in the World
    http://finance.yahoo.com/career-work/article/109029/worlds-billionaires-2010

    TOP TEN RICHEST PEOPLE IN THE WORLD 2010
    http://www.richestpersons.net/top-ten-richest-people-in-the-world-2010/

    Top 10 Richest People on Earth in 2010
    This Year Forbes released new list of richest people in the world and if you like to know who is on the top 10 of chart, I can give you the information. Here`s 10 richest people in the world in 2010 according to Forbes…
    http://www.richestpersons.net/top-10-richest-people-on-earth-in-2010/

    Forbes list of billionaires
    http://en.wikipedia.org/wiki/Forbes_list_of_billionaires

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  4. more on Venture Capitalism….?

    Venture Capital
    http://en.wikipedia.org/wiki/Venture_capital

    National Venture Capital Association
    http://www.nvca.org/

    Top 100 Venture Capital firms
    Entrepreneurs were the big winners in 2007, receiving more than $7 billion in venture capital a quarter for four straight quarters–a phenomenon not seen since 2001. Venture capitalists invested $29.4 billion in 3,813 deals in 2007, a 10.8 percent increase in dollars and a 5 percent increase in deal volume over 2006.
    http://www.entrepreneur.com/vc100

    So You Want to Be a Venture Capitalist
    By GARY RIVLIN
    Published: May 22, 2005

    Menlo Park, Calif.

    BY all rights Stewart Alsop should have been a terrific venture capitalist. So why did Mr. Alsop, long considered a cyber-prophet among technology leaders, wash out in a profession in which he seemed predestined to succeed?
    http://www.nytimes.com/2005/05/22/business/yourmoney/22venture.html

    How does venture capital work?
    Wh­en you start a new business, you need money to get it off the ground. You need the money to rent or purchase space for the business, furniture and equipment, supplies, etc. You also need money to pay employees. There are several places where you can get the money that a new business needs:
    http://money.howstuffworks.com/question398.htm

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  5. more on entrepreneurship?

    Entrepreneurship
    From Wikipedia, the free encyclopedia
    http://en.wikipedia.org/wiki/Entrepreneurship

    Free online resource on entrepreneurship on the net
    http://www.entrepreneurship.org/

    entrepreneurship in Pakistan – a research
    http://www.pide.org.pk/pdf/Seminar/Seminar93.pdf
    http://ideas.repec.org/p/pid/wpaper/200729.html

    on-line resource
    http://www.zeromillion.com/

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  6. Tycoon Dick blasts Australia’s ‘appalling and greedy’ super wealthy
    December 21, 2010 – 12:18PM

    Australia’s “appalling and greedy” super-wealthy people have come under fire for refusing to donate 20 per cent of their income to charity this Christmas.

    Bank bosses have particularly raised the ire of businessman Dick Smith, who two weeks ago wrote to the chief executives of the nation’s Big Four financial institutions urging them to give away a fifth of their income.

    http://www.smh.com.au/national/tycoon-dick-blasts-australias–appalling-and-greedy-super-wealthy-20101221-193q1.html

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  7. […] a total night­mare for women bal­anc­ing their bud­gets or maybe my brother is right – Pak­istan has a lot of rich folks hid­den in the wood­work?! What do you think?:)

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  8. Innovation is the secret of economic success
    Only by encouraging new ideas and industries can we ensure our future prosperity.

    By George Osborne and Eric Schmidt 8:05PM GMT 03 Nov 2010

    226 Comments

    When we first met, about four years ago in America, we both had certain prejudices. One of us thought that everyone who worked in Silicon Valley had to be under 40, wear trainers and be better at forming relationships with computers than humans. The other thought that everyone who was a Conservative had to be over 40, wear only suits and be socially illiberal. We soon got to know each other and discovered that while we were both wrong about the stereotypes, we did share one bias: a passionate commitment to innovation.

    http://www.telegraph.co.uk/finance/economics/8108802/Innovation-is-the-secret-of-economic-success.html

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  9. Mian Muhammad Mansha: Pakistan’s richest man speaks
    Interview by Ismat Sarah Mangla, contributorMarch 11, 2011: 7:13 AM ET

    FORTUNE — Social and political turmoil tops the headlines coming out of Pakistan. But for billionaire Mian Muhammad Mansha, the untold story lies in the country’s rich, untapped business opportunities. He should know: Widely regarded as Pakistan’s wealthiest man, Mansha, 64, has built a vast and diverse empire, beginning with a single textile mill. Today his Nishat Group, Pakistan’s largest business conglomerate and private employer, with $2.1 billion in sales, encompasses banking, cement, textiles, and energy. The following are edited excerpts from a January interview with Fortune in his Lahore offices and, later, by phone.

    http://money.cnn.com/2011/03/10/news/international/mian_muhammad_mansha_pakistan.fortune/index.htm

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