Telenor Company Profile
Telenor PK is a wholly owned subsidiary of Telenor Group, a Norwegian company. The Telenor group operates in 11 markets across Europe and Asia and in additionally 19 markets through its 31.67 per cent ownership in VimpelCom Ltd. Telenor Group is among the largest mobile operators in the world with over 140 million mobile subscriptions (Q4 2011) and a workforce of 30,000. Telenor started out as a public company in 1855 and builds on more than 155 years of telecom experience. A Telenor is a global company it is always looking to expand in to untapped markets or where oppuruntities are available for expansion.
Telenor acquired a license for providing GSM services in Pakistan in April 2004, and launched its services commercially in Karachi, Islamabad, and Rawalpindi on 15 March 2005; it expanded its services to Lahore, Faisalabad and Hyderabad on 23 March 2005. Telenor Pakistan’s Corporate Headquarters are in Karachi, with regional offices in Peshawar, Lahore, Faisalabad, Multan, Hyderabad and Islamabad. On 28 January 2005, Telenor established its first call centre in Karachi.
TELENOR TOOK ADVANTAGE OF GRADUATES IN KARACHI BY OPENING ITS CALL CENTRE IN A CITY WITH HIGH LEVEL OF GRADUATES.
As of January 2012, Telenor Pakistan had a reported subscriber base of 28.47 million, and a SIM market share of 24%. On October 2012, Telenor officially declared to have the customer base of 30 million.
Competitors
Its main competitors are Warid (UAE), Mobilink (Egypt), Zong (China), Ufone (PTCL/UAE). All these companies are foreign investments; excluding Ufone which is part owned by PTCL.
Telenor’s advantage over its competitors is gained by offering consumers greater value than competitors. Telenor strategy is to gain more and more competitive advantages. It also uses these competitive advantages well enough for its promotions. Currently Telenor is enjoying the following competitive advantages:- Lowest overall call rates Value added Services (VAS) Call block service Corporate wing
Telenor face many challenges with the ever growing needs of telecommunication. It must remain profitable with the decreasing economic situation in Pakistan. It must grow as well in these dark times if it has to remain in the market. Telenor faces very strong competition from its competitors. It must offer lowest rates with better quality service. New features and services should be introduced to make its customers loyal, happy and satisfied.

Barrier to entry
Barrier to entry, are obstacles that make it difficult to enter a given market. The term can refer to hindrances a firm faces in trying to enter a market or industry - such as government regulation, or a large, established firm taking advantage of economies of scale - or those an individual faces in trying to gain entrance to a profession - such as education or licensing requirements.
Because barriers to entry protect incumbent firms and restrict competition in a market, they can contribute to distortionary prices. The existence of monopolies or market power is often aided by barriers to entry.
High barrier to entry and high exit barrier, Telenor
Patents -Giving the firm the legal protection to produce a patented product for a number of years (see below)
Limit Pricing -Firms may adopt predatory pricing policies by lowering prices to a level that would force any new entrants to operate at a loss
Cost advantages -Lower costs, perhaps through experience of being in the market for some time, allows the existing monopolist to cut prices and win price wars
Advertising and marketing -Developing consumer loyalty by establishing branded products can make successful entry into the market by new firms much more expensive. This is particularly important in markets such as cosmetics, confectionery and the motor car industry.
Research and Development expenditure-Heavy spending on research and development can act as a strong deterrent to potential entrants to an industry. Clearly much R&D spending goes on developing new products (see patents above) but there are also important spill-over effects which allow firms to improve their production processes and reduce unit costs. This makes the existing firms more competitive in the market and gives them a structural advantage over potential rival firms.
Presence of sunk costs -Some industries have very high start-up costs or a high ratio of fixed to variable costs. Some of these costs might be unrecoverable if an entrant opts to leave the market. This acts as a disincentive to enter the industry.
International trade restrictions -Trade restrictions such as tariffs and quotas should also be considered as a barrier to the entry of international competition in protected domestic markets.
Sunk Costs-Sunk Costs are costs that cannot be recovered if a business’s decides to leave an industry Examples include: " Capital inputs that are specific to a particular industry and which have little or no resale value " Money spent on advertising / marketing / research which cannot be carried forward into another market or industry When sunk costs are high, a market becomes less contestable. High sunk costs (including exit costs) act as a barrier to entry of new firms (they risk making huge losses if they decide to leave a market).

Pest Analysis
PEST stands for Political, Economical, Social & Technological factors of the external macro-environment. A PEST analysis is an analysis of the external macro-environment that affect all firms, Such external factors usually are beyond the firm’s control and sometimes present themselves as threats. Many macro-environmental factors are country specific and a PEST analysis will need to be performed for all countries of interest.
Political Factors
Political factors are basically to what degree the government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads). Furthermore, governments have great influence on the health, education, and infrastructure of a nation.
After Pakistan was created in 1947, there was only one provider of Telecom services in the country under the name of the T&T (Telephone & Telegraph). In 1990 Pakistan realized that it is becoming very difficult to provide Telecommunication services in the country by its own. So Pakistan signed agreement with WTO (World trade organization) according to which a set of regulation has to be formed to provide services in the country, promote both local as well as foreign competition in the market at very competitive prices so that investor has some acceptable margins of earning. To abide by the contract government of Pakistan then established Pakistan Telecommunication Corporation (PTC) to provide services in the country. In order to promote the Telecommunication services in Pakistan the government of Pakistan has passed ordinance in 1996 under which PTA (Pakistan Telecommunication Authority) was formed. PTA is a regulatory department for all the Telecommunication operations and services across the country (Haroon 2004).similarly Deregulation of Telecommunication sector was introduced in 2003 and licenses for wireless local loop (WLL), Long distance International (LDI) were granted to different foreign and local companies. First cellular policy was introduced in 2004 according to which two foreign companies Warid from UAE and Telenor from Norway have been granted licenses to enter Pakistan market.

Economic factors
Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy.
Economic Factors affecting Telenor are directly controlled and influenced by financial institutions like State bank of Pakistan. State bank helps the industry by giving good economic foundations and also is able to provide financial aid in times of crisis.
Economic conditions in Pakistan’s telecommunication are directly influenced by the government as the PTA, Pakistan Telecommunication Authority, is a government institution.
It can be said that the economic situation in Pakistan is not very good. Companies such as Telenor are affected by rising inflation which devalues profits and also increases costs. Customers of Telenor will also be affected as rising inflation will lower there disposable income.
Taxes on the telecommunications industry have hampered growth of Telenor and also have made services much more expensive for customers. Pakistani government has one of the highest tax rates on its telecommunications industry in the world.
Social Factors
Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labour). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers).
Social factors dictate the telecommunications industry. Pakistani people believe in close relations with friends and family and this has led to the growth of companies such as Telenor. One of the main social factors affecting Telenor is that the Pakistani population is rising day by day. This in turn means that companies such as Telenor will be able offer their services to a growing population. Another social factor affecting Telenor is that there is quite a large number of Pakistanis living abroad, sms, calls and interacting through the internet with friends and family living abroad is seen as the only viable route of communications.
Technological factors
Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation.
Technological changes in the Pakistan telecommunication have meant companies such as Telenor are able to provide services that were not previously available to its customers. Telenor has taken advantage of its 3G licence by introducing superfast internet; other companies have fallen behind Telenor as its parent company is a leading 3G provider in Europe. Technological changes keep costs down for Telenor and as such they are able to pass these savings on to customers.
Environmental factors
Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.
Legal Factors
Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.
Internal and external
The organizational environment plays a major role in assessing the performance of the company as it takes in inputs and distributes outputs. There are many internal and external factors that affect the overall environment of the organization. The internal factors include the structure of organization, chain of command; people, technology, organizational culture and ethics and management philosophy. The external factors are in two parts; direct external environment and indirect external environment. Direct external factors include customers, suppliers, competitors and government regulators. Indirect external factors include politics, economy, religion, socio-culture and technology. All these factors have been discussed in detail in this report.

Telenor Environment Policy
Telenor environment policy commits it to improving energy efficiency, reducing waste and increasing reuse and recycling. Telenor is committed to sustainable business practices and policies relating to environment protection. It works with environmental organizations to reduce carbon footprints. Telenor promotes the use of operational practices that reduce the environmental burden associated with company's operations. The company also supports innovative developments in products and services that can offer environmental and social benefits. The company is concerned about the environment and the impact of climate change. It provides products that can help customers reduce their carbon footprint. The company is also working to recycle and reuse old phones and network equipment, alongside cutting back on paper. The company follows Waste Electrical and Electronic Equipment (WEEE) regulations regarding discharging and recycling its equipment. Green purchasing is encouraged and suppliers are asked to provide products with a reduced environmental impact.

Strengths Telenor's strength is its global scale.Telenor is one of the Most Trusted Service Brand in Pakistan. "excellent signal strength" Diversified geographical portfolio with strong mobile telecommunications operations in Europe, the Middle East, Africa, Asia Pacific and to some extent the US Network infrastructure Leading presence in emerging markets such as PK Large customer base | Weaknesses Negative return on assets (ROA) underperform key competitors like AT&T, BT Group, Deutsche Telecom PK business not nearly as strong as European/rest of the world operations 80% of its business is generate EU | Opportunities Diversification Use of advanced technologyNew markets | Threats Highly competitive market Still lags behind major competitors in PKExtremely high penetration rates in key European marketsEuropean Union regulation on cross-border cell phone usage by customers Expansion and Europe concentration vulnerable to EU recessionary situation |
Porter’s five forces
Buyer power
The bargaining power of buyers in the telecommunications industry is high due to the cutthroat competition and lack of differentiated products. The strong buyer power effectively reduces the cost prices in the industry though not to the level of its competitors. As such, Telenor will keep making reasonable profits compared to its competitors.
Supplier power
Telenor’s suppliers have a high bargaining power since the company operates with greater margins compared to its competitors. As a leader in the market, the market share is large meaning that it can easily absorb any price increments from the suppliers more than its competitors can. As such,
Threat of substitutes
Telenor faces a considerable threat for products and services. The landline and CDMA services are fast declining while broadband services are fast becoming common. Video conferencing, VOPI such as Skype, Google Talk and Yahoo Messenger, email and social networking have emerged as substitutes to mobile services. However, due to the strong buyer power and effective economies of scale, Telenor does not need to pass down the costs attributed to substitution to consumers
Threat of entrants
The threat of fresh market entrants is low because of barriers to entry. Companies wishing to enter the market must pay huge licensing fees coupled by spectrum availability and regulatory issues attached to the industry. Similarly, the costs of setting up network infrastructure are high, and the rapidly changing technology make is difficult for new entrants to cope. However, Telenor can cope with this by maintaining high-level efficiency of its services to unrivalled heights.

Industry rivalry
Telenor faces extremely high rivalry from its competitors due to the low call rate prices charged by its closest competitors. Similarly, the competitors constantly provide innovative products and services to the customers, which mean that Telenor has to provide the same to its customers.
Ease of Doing Business
The World Bank recognized Pakistan, 107th rank in Ease of Doing Business, while the 98th rank in starting a business in the world, in its annual 'Doing Business' report.
The Ease of Doing Business index is meant to measure regulations directly affecting businesses. A nation's ranking on the index is based on the average of 10 sub-indices:1. Starting a business - Procedures, time, cost and minimum capital to open a new business2. Dealing with licenses - Procedures, time and cost of business inspections and licensing (construction industry)3. Hiring and firing workers - Difficulty of hiring index, rigidity of hours of index, difficulty of firing index, hiring cost and firing cost4. Registering property - Procedures, time and cost to register commercial real estate5. Getting credit - Strength of legal rights index, depth of credit information index6. Protecting investors - Indices on the extent of disclosure, extent of director liability and ease of shareholder suits7. Paying taxes - Number of taxes paid, hours per year spent preparing tax returns and total tax payable as share of gross profit8. Trading across borders - Number of documents, number of signatures and time necessary to export and import9. Enforcing contracts - Procedures, time and cost to enforce a debt contract10. Closing a business - Time and cost to close down a business, and recovery rate
Interest Rates
The effect of a change in interest rates will depend on several factors, such as:
• The amount that a business has borrowed and on what terms• The cash balances that a business holds• Whether the business operates in markets where demand is sensitive to changes in interest rates
Let’s look at the third factor listed above to examine the implications a little more closely.
Consider the example of households and consumers who like to pay for their goods and services using borrowing such as credit cards or a bank overdraft or loan. Also think about households who have substantial balances outstanding on a mortgage used to finance a house purchase.
An increase in interest rates will mean that the cost of borrowing rises.
Globalisation
Globalisation is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture.[2][3] Put in simple terms, globalization refers to processes that promote world-wide exchanges of national and cultural resources. Advances in transportation and telecommunications infrastructure, including the rise of the Internet, are major factors in globalization, generating further interdependence of economic and cultural activities. “Globalisation has changed the way we work. Virtual teams, mobile employees, and all of those working from home require constant access to Internet and business information. Modern business requires linking of employees, suppliers, partners and clients, irrespective of the organisation size and location.” Telenor has the above view. Globalisation for a company such as Telenor means connecting people from different locations around the world. Telenor has bought something different to the Pakistan telecommunications market which no other competitor of theirs has, the will to link people across the globe for as cheap as possible.
Demographic Features of Pakistan
Urdu, Punjabi, Sindhi, Pashto, Balochi, Saraiki and others
Islam 75-90% Sunni, 10-20% Shia with Hindu, Sikh and Christian minorities
Pakistan's estimated population in 2010 is over 170 million making it the world's sixth most-populous country, behind Brazil and ahead of Russia. During 1950-2008, Pakistan's urban population expanded over sevenfold, while the total population increased by over fourfold. In the past, the country's population had a relatively high growth rate that has, however, been moderated by declining fertility and birth rates. The population growth rate now stands at 1.6%.
Dramatic social changes have led to rapid urbanization and the emergence of megacities. During 1990-2003, Pakistan sustained its historical lead as the second most urbanized nation in South Asia with city dwellers making up 36% of its population. Furthermore, 50% of Pakistanis now reside in towns of 5,000 people or more.
Pakistan has a multicultural and multi-ethnic society and hosts one of the largest refugee populations in the world as well as a young population.
TNC/MNC
A multinational corporation (MNC) or multinational enterprise (MNE) is a corporation that is registered in more than one country or that has operations in more than one country. It is a large corporation which both produces and sells goods or services in various countries. It can also be referred to as an international corporation. They play an important role in globalization. Arguably, the first multinational business organization was the Knights Templar, founded in 1120.After that came the British East India Company in 1600 and then the Dutch East India Company, founded March 20, 1602, which would become the largest company in the world for nearly 200 years.
Multinational corporations are important factors in the processes of globalization. National and local governments often compete against one another to attract MNC facilities, with the expectation of increased tax revenue, employment, and economic activity. To compete, political powers push towards greater autonomy for corporations, or both. MNCs play an important role in developing the economies of developing countries like investing in these countries provide market to the MNC but provide employment, choice of multi goods etc.
Conflict of laws is a set of procedural rules that determines which legal system and which jurisdiction's applies to a given dispute.
The term conflict of laws itself originates from situations where the ultimate outcome of a legal dispute depended upon which law applied, and the common law courts manner of resolving the conflict between those laws. In civil law, lawyers and legal scholars refer to conflict of laws as private international law. Private international law has no real connection with public international law, and is instead a feature of local law which varies from country to country.
The three branches of conflict of laws are: Jurisdiction – whether the forum court has the power to resolve the dispute at hand Choice of law – the law which is being applied to resolve the dispute Foreign judgments – the ability to recognize and enforce a judgment from an external forum within the jurisdiction of the adjudicating forum.
Kyoto Protocol
The Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) is an international treaty that sets binding obligations on industrialised countries to reduce emissions of greenhouse gases. The UNFCCC is an environmental treaty with the goal of preventing "dangerous" anthropogenic (i.e., human-induced) interference of the climate system.191 countries (all UN members, except Andorra, Canada, South Sudan and the United States), as well as the European Union are Parties to the Protocol. The United States signed but did not ratify the Protocol and Canada withdrew from it in 2011.The Protocol was adopted by Parties to the UNFCCC in 1997, and entered into force in 2005.
Developing countries such as Pakistan, do not have binding targets under the Kyoto Protocol, but are still committed under the treaty to reduce their emissions. Actions taken by developed and developing countries to reduce emissions include support for renewable energy, improving energy efficiency, and reducing deforestation. Under the Protocol, emissions of developing countries are allowed to grow in accordance with their development needs.
Cancun Conference
The 2010 United Nations Climate Change Conference was held in Cancún, Mexico, from 29 November to 10 December 2010.[1] The conference is officially referred to as the 16th session of the Conference of the Parties (COP 16) to the United Nations Framework Convention on Climate Change (UNFCCC) and the 6th session of the Conference of the Parties serving as the meeting of the Parties (CMP 6) to the Kyoto Protocol. In addition, the two permanent subsidiary bodies of the UNFCCC – the Subsidiary Body for Scientific and Technological Advice (SBSTA) and the Subsidiary Body for Implementation (SBI)– held their 33rd sessions. The 2009 United Nations Climate Change Conference extended the mandates of the two temporary subsidiary bodies, the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP) and the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (AWG-LCA), and they met as well.
Intellectual property infringements
An intellectual property infringement is the infringement or violation of an intellectual property right. There are several types of intellectual property rights, such as copyrights, patents, and trademarks. Therefore, an intellectual property infringement may for instance be a Copyright infringement, Patent infringement, Trademark infringement
Techniques to detect (or deter) intellectual property infringement include:
Fictitious entry, such as: Fictitious dictionary entry. An example is Esquivalience included in the New Oxford American Dictionary (NOAD) Trap street, a fictitious street included on a map for the purpose of "trapping" potential copyright violators of the map Watermarking
Pakistan Legal System
Pakistan is an Islamic republic. Islam is the state religion, and the Constitution requires that laws be consistent with Islam. The country has an area of 310,527 square miles and a population of 170 million. Official figures on religious demography, based on the most recent census taken in 1998, showed that approximately 97 percent of the population was Muslim. The majority of Muslims in the country are Sunni, with a Shi'a minority ranging between 10 to 20 percent.
The Penal Code incorporates a number of Islamic law (Shari'a) provisions. The judicial system encompasses several different court systems with overlapping and sometimes competing jurisdictions that reflect differences in civil, criminal, and Islamic jurisprudence. The Federal Shari'a Court and the Shari'a bench of the Supreme Court serve as appellate courts for certain convictions in criminal court under the Hudood Ordinances; judges and attorneys in these courts must be Muslim. The federal Shari'a court may overturn any legislation judged to be inconsistent with the tenets of Islam. In March 2005, however, the Supreme Court Chief Justice ruled that the Federal Shari'a Court had no jurisdiction to review a decision by a provincial high court even if the Federal Shari'a Court should have had initial appellate jurisdiction.
The legal system is derived from English common law and is based on the much-amended 1973 constitution and Islamic law (sharia). The Supreme Court, provincial high courts, and other courts have jurisdiction over criminal and civil issues. The president appoints the Supreme Court's chief justice and formally approves other Supreme Court justices as well as provincial high court judges on the advice of the chief justice. The Supreme Court has original, appellate, and advisory jurisdiction, and high courts have original and appellate jurisdiction. The Federal Shariat Court determines whether laws are consistent with Islamic injunctions. Special courts and tribunals hear particular types of cases, such as drugs, commerce, and terrorism. Pakistan's penal code has limited jurisdiction in tribal areas, where law is largely derived from tribal customs.
The law of one price
The law of one price is an economic law stated as: "In an efficient market, all identical goods must have only one price."
The law also need not apply if buyers have less than perfect information about where to find the lowest price. In this case, sellers face a tradeoff between the frequency and the profitability of their sales. That is, firms may be indifferent between posting a high price (thus selling infrequently, because most consumers will search for a lower one) and a low price (at which they will sell more often, but earn less profit per sale).
Ethical Issues
In the past years, the multi-faceted problems made it almost impossible for indigenous industries to undertake social activities in developing countries. However, corporate social responsibility (CSR) research has blossomed in this new millennium. This is due to the increasing concern expressed by policy makers and individual bodies about corporate social responsibility and the pressure exerted on organizations to demonstrate high ethical standards. This project is very important because Pakistan may need a new code of conduct, laws and regulations and multi-stakeholder agreements and private voluntary initiatives as new businesses are beginning to emerge into our system. Telecommunication industry is a typical example of a fast growing industry within our system. It is therefore imperative that we acknowledge the significance of their corporate contribution to the societies and the nation, for this foresight to be smart and articulate.
Corruption
Chairman PTA, who is already facing Rs. 50 billion cases in the Supreme Court has his name on the Exit Control List (ECL) as per PAC’s recommendations.
Committee which was chaired by Muhammad Idrees Khan Safi inquired from the representative of the IT Ministry including Secretary IT – Farooq Awan and Head of Universal Service Fund (USF) Riaz Ashraf Siddique about the mismanagement and favoritism in the awarding of telecom contracts to various firms. On which Farooq Awan replied that it is the responsibility of PTA and not the ministry to verify the credibility of telecom firms before a contract is awarded to them. When Riaz Ashraf was asked about certain USF projects including Noshky-Mastang and Ziarat he took the same stance and told that although, USF is an independent organization that is meant to extend the telecom related services to the areas where operators don’t reach but it is the duty of PTA to check the credibility of any telecom company before it is allowed to take part in the process of awarding contract.
According to details released by NAB, national exchequer was being deprived of Rs. 47 billion in terms of tax evasion by five cellular companies including NTC, Ufone, Telenor, Mobilink and Warid.
Corruption in Pakistan is widespread, particularly in the government and lower levels of police forces. The country has had a consistently poor ranking at the Transparency International's Corruption Perceptions Index with scores of 2.5 in 2011, 2.3 in 2010, and 2.5 in 2009 out of 10. In 2011, Pakistan ranked 134 on the index with 42 countries ranking worse.In 2012, Pakistan's ranking dropped even further from 134 to 139, making Pakistan the 34th most corrupt country in the world, tied with Azerbaijan, Kenya, Nepal, and Nigeria.
According to the 2002 study, 99% of 256 respondents reported facing corruption of taxation. Furthermore, 32% of respondents reported paying bribes to have their tax assessment lowered, and nearly 14% reported receiving fictitious tax assessments until a bribe was paid.
Safety Laws
There is no independent legislation on occupational safety and health issues in Pakistan. The main law, which governs these issues, is the Chapter 3 of Factories Act, 1934. All the provinces, under this act, have devised Factories Rules. The Hazardous Occupations Rules, 1963 under the authority of Factories Act is another relevant legislation. These rules not only specify some hazardous occupations but also authorize the Chief Inspector of Factories to declare any other process as hazardous.
The other related laws are:
• Dock Laborers Act, 1934
• Mines Act, 1923
• Workmen Compensation Act, 1923
• Provincial Employees Social Security Ordinance, 1965
• West Pakistan Shops and Establishments Ordinance, 1969
• Boilers and Pressure Vessels Ordinance, 2002

Pakistan Standard Industrial Classification
In Pakistan, industrial classifications have for long been in use in the industrial censuses and surveys, labour statistics, population censuses, national income estimates, etc. However, a wide variety of industrial classifications were used by 2the various organizations entrusted with the task of collection of statistical data in various censuses, surveys etc. and the need to evolve a common industrial classification which could be used by different agencies became extremely important. While attempts were made in the past in several cases to bring them in line with the framework of the ISIC, these had produced different versions of different details depending on the nature of the respective needs. The Federal Bureau of Statistics (FBS), which is responsible for setting up of statistical standards, took up the task of evolving a standard industrial classification in early 1970 with the objective to uniquely define each economic activity for promoting uniformity and comparability in the presentation of statistical data collected by Federal and Provincial Governments as well as private sector organizations. Pakistan Standard Industrial Classification (PSIC) 1970 was developed in line with International Standard Industrial Classification - ISIC 2. Till 2006, Pakistan had been using PSIC 1970.
Market Structure
Oligopoly is a market structure in which the number of sellers is small. Oligopoly requires strategic thinking, unlike perfect competition, monopoly, and monopolistic competition.
• Under perfect competition, monopoly, and monopolistic competition, a seller faces a well-defined demand curve for its output, and should choose the quantity where MR=MC. The seller does not worry about how other sellers will react, because either the seller is negligibly small, or already a monopoly.
• Under oligopoly, a seller is big enough to affect the market. You must respond to your rivals’ choices, but your rivals are responding to your choices. In oligopoly markets, there is a tension between cooperation and self-interest. If all the firms limit their output, the price is high, but then firms have an incentive to expand output. The techniques of game theory are used to solve for the equilibrium of an oligopoly market.
Monopoly Laws
The Competition Commission of Pakistan (CCP) is an independent quasi-regulatory, quasi-judicial body that helps ensure healthy competition between companies for the benefit of the economy.
The Commission prohibits abuse of a dominant position in the market, certain types of anti-competitive agreements, and deceptive market practices. It also reviews mergers of undertakings that could result in a significant lessening of competition. Combined with its advocacy efforts, the Commission seeks to promote voluntary compliance and develop a ‘competition culture’ in the economy.
The Competition Commission of Pakistan (CCP) was established on 2 October 2007 under the Competition Ordinance, 2007, which was repromulgated in November 2009. Major aim of this Ordinance was to provide for a legal framework to create a business environment based on healthy competition for improving economic efficiency, developing competitiveness and protecting consumers from anti-competitive practices.
Prior to the Competition Ordinance, 2007, Pakistan had an anti-monopoly law namely ‘Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance’ (MRTPO) 1970. The Monopoly Control Authority (MCA) was the organization to administer this Law. In the fast changing global and national economic environment, the MRTPO, 1970 was inadequate to address competition issues effectively. This was because:
i) the 1970’s law was out of date for a modernizing and rapidly transforming market economy; ii) due to several limitations in the law, the MCA was not able to meet the expectations of businesses and the consumers at large; iii) the first generation reforms that liberalized the economy and encouraged the private sector required a competition policy framework that could promote and protect competition and innovation.

Part 2
What are BRIC countries?
The BRIC countries label refers to a select group of four large, developing countries (Brazil, Russia, India and China). The four BRIC countries are distinguished from a host of other promising emerging markets by their demographic and economic potential to rank among the world’s largest and most influential economies in the 21st century (and by having a reasonable chance of realizing that potential). Together, the four original BRIC countries comprise more than 2.8 billion people or 40 per cent of the world’s population, cover more than a quarter of the world’s land area over three continents, and account for more than 25 per cent of global GDP.
Why the BRIC are Important
The BRIC are both the fastest growing and largest emerging markets economies. They account for almost three billion people, or just under half of the total population of the world. In recent times, the BRIC have also contributed to the majority of world GDP growth.
According to various economists projections, it is only a matter of time before China becomes the biggest economy in the world - sometime between 2030 and 2050 seems the consensus. In fact, Goldman Sachs believe that by 2050 these will be the most important economies, relegating the US to fifth place.
By 2020, all of the BRIC should be in the top 10 largest economies of the world. The undisputed heavyweight, though, will be China, also the largest the creditor in the world.
Apart from their growth characteristics, the BRIC countries frankly have little in common. They are primarily an investment category now, although there may some political and economic alliances that develop from that grouping. If they do, it is likely to be temporary - once China has assumed its rightful place, it may have no need for these alliances. A G2 of China and the US may be more important for it unless the 2050 predictions do come true.
In 2008, the BRIC countries had a summit and analysts believed that they were seeking to 'convert their growing economic clout into political power'.
These analysts believe that by working together, the BRIC countries can carve out the future economic order between themselves. They believe that China can dominate in manufactured goods, India in services, and Russia and Brazil in raw material supplies.
By working together, they can effectively counter the entrenched interests and organisational structures of the west. In reality, right now, relations with the US, the EU and bilaterally are more important, but it is worth watching developments between BRIC nations to see if these notions start to become entrenched in active co-operation.
For some years reforms and greater openness have increased the global economic significance of the BRIC countries. These countries still have strong growth potential, especially in view of their large, young populations. The key challenge faced by the BRIC countries will be to maintain robust and sustainable growth in order to reduce the gap in living standards to the mature market economies. However, it is hardly realistic to believe in a smooth extended catching-up process without major fluctuations. In the course of time the BRIC countries will have to face some
HIV/AIDS AND ECONOMIC DEVELOPMENT The prevalence of HIV/AIDS will be a growing challenge for the BRIC countries. Although the incidence of the disease as a percentage of the BRIC populations is still modest compared to southern Africa, the absolute figures are high. According to UNAIDS estimates 5.1 million people in India were infected with HIV/AIDS at the end of 2003. This is more than any other country apart from South Africa. In Brazil, Russia and China, respectively 0.7, 0.9 and 0.8 million people were estimated to be infected at the end of 2003. These estimates are, however, subject to considerable uncertainty. The National Intelligence Council expects that up to 2010 the number of infected people will increase many times over. India is thus expected to have 20-25 million infected people (more than any other country), China 10-15 million and Russia 5-8 million. This will correspond to infection rates of approximately 3-6 per cent in Russia, approximately 2 per cent in India and approximately 1 per cent of the population in China. For Russia the consequences are stated to be an accelerated reduction of the population and approximately 0.5 percentage point lower annual growth from 2010 and 1 percentage point lower annual growth from 2020. For India and China the effect is assessed to be smaller due to the lower infection rate. The Asian Development Bank (2004) calculates growth consequences for Thailand, where the HIV/AIDS infection rate of approximately 1.8 per cent is comparable with India and China in 2010, if the spread of the disease is not checked. It is estimated that annual growth in 1990-2015 will be 0.65 percentage point lower. On an accumulated basis this will mean that GDP per capita will be approximately 15 per cent lower in 2015. 153 major challenges and history tells us that not all countries are equally successful at tackling these challenges. The challenge they all face includes ensuring sustainability at a high growth rate, reducing the rural/urban income gap and maintaining macroeconomic stability. Reforms of the financial sector in order to better handle rising capital flows and mobilise domestic savings into productive investments will also be important. The BRIC countries share a number of common characteristics, but there are also important differences. Brazil will face the major challenge of opening up its economy and creating a larger domestic savings pool to finance investments. In Russia, the challenge is to reduce the economy’s dependence on oil and to fight corruption, while in India the key challenges are greater openness, better education and improved infrastructure. In China, ongoing reforms of state-owned enterprises and banks will take high priority.
What are CIVETS countries?
The CIVETS countries are six favoured emerging markets countries - Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. These countries are favoured for several reasons, such as "a diverse and dynamic economy" and "a young, growing population"
The term "Civets" – Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa – was pioneered by former HSBC chief executive Michael Geoghegan last year, and brings together a group of emerging markets tipped as the next big bet for growth. The Civets – the acronym forms the name of a small nocturnal mammal – follows on from another group of emerging nations known as the "Brics": Brazil, Russia, India and China. They are spread widely around the world but do share a number of similarities, notably young populations. Their economies are also perceived to have relatively sophisticated financial systems and to not be overly reliant on any one sector.
HSBC Global Asset Management rolled out the first Civets investment fund earlier this year.
COLOMBIA- Already a key target for foreign investment, analysts hail Colombia's pro-business government, which has been reinvesting oil revenues in infrastructure. Colombia is the third largest exporter of oil to the US.
The country's main industries apart from oil are textiles, food processing, clothing, footwear, beverages, chemicals, cement, gold, coal and emeralds. Its economy grew 4.3% in 2010, compared with 2.8% for the US.Its population of almost 45 million is made up of 27% 0-14 year-olds and 67% 15-64 year-olds, giving it a median age of 28, compared with 40 for the US and UK.
Growth in 2010 4.3% Median age 28

INDONESIA- According to managers of the Civets fund at HSBC, Indonesia's primary attraction is its 'vast pool of educated manpower, giving it the lowest unit labour costs in the Asia-Pacific region'. They add: "The government is ambitious to emerge as a credible manufacturing hub and now has the ability to deliver infrastructure improvements more rapidly."
With an estimated population of 245.6 million, Indonesia is the fourth most populous country in the world. Almost half the economy is industrial.
Growth in 2010 6.1% Median age 28.2
VIETNAM- Vietnam has already been targeted as a potentially profitable new manufacturing hub in Asia, with foreign firms and investors focusing on its relatively low labour costs in particular. Its economy is 41% industrial.
But some analysts have raised concerns about its uncertain outlook for interest rates and inflationary pressures, and the country continues to pursue a fast-growth policy. Downgrading Vietnam earlier this year, Standard & Poor's warned that its banking system was vulnerable to shocks and raised concerns about bad debts.
Growth in 2010 6.8% Median age 27.8
EGYPT- Egypt's fast-growing ports on the Mediterranean and the Red Sea, joined by the Suez canal, are seen as potentially important trade hubs to connect Europe and Africa. The fund managers at HSBC believe the turmoil of the Arab spring, which tore through Egypt earlier this year, will not have a lasting effect on growth.
'While the country has endured recent unrest, which could slow growth in the short term, once the political situation has settled down, we believe Egypt will regain its growth trajectory,' they say.
Growth in 2010 5.1% Median age 24.3
TURKEY- Turkey spent the last decade reforming its economy and democracy. In 2005 it began accession talks with the European Union and already benefits from strong trade and investment relations with the EU. In 2010 agriculture made up roughly 10% of the economy, industry 27% and services 64%.
Growth in 2010 8.2% Median age 28.5
SOUTH AFRICA- The most developed country in Africa, foreign investors have long been attracted to South Africa's rich natural resources, in particular gold. But the country had the slowest growth of all the Civets last year and has suffered unemployment of 25%.
There are concerns that South Africa is recovering more slowly than its neighbours. The latest World Economic Outlook from the International Monetary Fund noted: 'A surge in unemployment, high household debt, low capacity utilisation, the slowdown in advanced economies, and substantial real exchange-rate appreciation are making for a hesitant recovery.'
The IMF is forecasting growth of 3.4% in 2011 and 3.6% in 2012. Still, that compares favourably with the IMF's 2012 outlook for US growth, put at 1.8%, and the UK, at 1.6%.

Growth in 2010 2.8% Median age 25
What is the G20?
The Group of Twenty (G20) is the premier forum for international cooperation on the most important issues of the global economic and financial agenda.

The objectives of the G20 refer to:
1. Policy coordination between its members in order to achieve global economic stability, sustainable growth;2. Promoting financial regulations that reduce risks and prevent future financial crises;3. Modernizing international financial architecture.
The G20 brings together finance ministers and central bank governors from 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States of America plus the European Union, which is represented by the President of the European Council and by Head of the European Central Bank.
The G20 meetings are attended by the World Bank President, the the Managing Director of the International Monetary Fund (IMF) and the President of the World Bank, the chairs of the International Monetary and Financial Committee and Development Committee of the IMF and World Bank in addition to the 19 countries and the EU. Sometimes, other countries such as Spain and Netherlands that are among the world’s largest economies too are invited.
The G20 represents:
 75% of the world population
 80% of international trade
 90% of the global economy
In addition :
 All five permanent members of the UN Security Council (China, France, Russia, UK and USA) are G20 members. All these countries also hold nuclear power status.
 India, a nuclear power not member to the Non-Proliferation Treaty (NPT) is also a G20 member while countries like Pakistan, North Korea, Israel and Iran –countries that are not officially nuclear powers – are not.
 Within the G20 Russia claims to represent not just its own Federation but the former Soviet states as well. While its population and economic influence are indecline, Russia still contends to maintain, albeit partially, its status as a superpower with its vast geography, nuclear power, space technology and energy resources.
 The only country representing Africa in the G20 is South Africa.
 Each Latin American country in the G20 represents the region’s different aspects. Mexico is a member of the NAFTA alongside the US and Canada. Brazil, while an economic giant, cannot exert its sole leadership in the region as a Portuguese speaking country. And as for Argentina, it assumes the leader status among Spanish speaking South American countries.
 There are three countries with prededominantley Muslim population and very different political regimes: Saudi Arabia, Indonesia and Turkey.
INTERNATIONAL TRADE
 The EU sustains its leadership in international trade both in terms of imports and exports. Its share in international trade, however, decreases every year.
 Germany is the economic leader within the EU.
 USA follows the EU, ranking second.
 Although China is lagging behind, its share in international trade increases every year. More significantly, it is en route to becoming the world leader in exports and currently a close contender to both the EU and USA
G20 Critic the G20 excludes more than four-fifths of the world’s countries, causing some critics (and excluded countries) to denounce it as unrepresentative and therefore insufficiently legitimate. And because having enough of the right actors at the table is a prerequisite for effective global coordination, these same critics contend that this lack of representative legitimacy also undermines the G20’s effectiveness. At the same time, the informal structure of the G20, with a rotating chair and no permanent secretariat, means that agendas are determined each year by the chair and so can swing widely, and formal mechanisms to monitor follow-through on countries’ public commitments are weak.
To address these perceived governance challenges, some G20 members (Korea, France, and Brazil, among others) are pushing for a permanent secretariat and formal criteria for membership selection. In this view the G20 should be institutionalized to ensure continuity and follow-through on the implementation of global commitments, and to cement the group’s legitimacy and prominence as a global forum. Likewise, some members and non-members are eager to expand the group to include more countries. On the other hand, some G20 members (including the U.S.) argue that the body should remain nimble, with no heavy bureaucratic secretariat and with a narrowly defined and focused agenda, to reduce coordination challenges and make quick responses in times of crisis possible. As the UN amply illustrates, there is a significant trade-off between inclusive membership and the ability of an international body to come to quick, decisive and meaningful consensus.
Yet fundamentally both camps miss the boat. The main constraint on the G20’s effectiveness is not whether other countries are included — the existent group already represents 90 percent of global GDP, 80 percent of world trade and 65 percent of the global population, including key emerging economies like China and Brazil. This is far more inclusive and representative than the G8, which the G20 has largely displaced, and more than adequate to make agreements to act collectively credible and effective. Nor does the group’s efficacy depend on whether the G20 sticks to financial issues narrowly conceived or expands its remit to address other fundamental global challenges that have failed to see cooperative solutions emerge in other forums. The issues on the G20’s burgeoning agenda are critical global problems, and solutions may indeed be fundamental to sustainable, balanced and inclusive growth in the long term.
The main threat to the G20’s effectiveness is its lack of domestic legitimacy within member countries. The group is widely perceived by the public as transnational elites hatching plans behind closed doors in insulated centers of power. Without genuine ex ante engagement to build trust and support with diverse domestic constituencies — labor, business, civil society, and the members of parliaments and congresses that purportedly represent these different interests — leaders will never have the space within the G20 to negotiate meaningful agreements. Finance ministers and heads of state now come to the table with their hands tied, their positions determined in advance by their governments and a formal script that precludes meaningful and creative compromises. And the problem only increases once leaders leave summits to return home. Bound internationally by public commitments, but without the ability to get those agendas enacted at home, the effective implementation of commitments is even weaker than the ability of leaders to forge meaningful agreements in the first place.
To increase its legitimacy — and ultimately its effectiveness — the G20 needs to improve transparency and accountability to the diverse constituencies that are ultimately impacted by the deals leaders cut behind closed doors in Cannes and Los Cabos. Baby steps in this direction have already been taken: The Mexican government is now tweeting about its G20 preparations, and there are parallel consultative groups for business (the “B20”) and labor (the “L20”). Yet engagement and consultation need to go beyond social media and high-level conferences. The G20 as a body, and G20 member countries individually, need to develop stronger mechanisms to seek meaningful input and build consensus from the global public that ultimately must live with the consequences of leaders’ choices and trade-offs. Ultimately, the G20 will only continue to matter if it can prove itself capable of effectively confronting the threats most existential to people’s livelihoods. In this, leaders and finance ministers require us all as partners.