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The economic achievements would be meaningful only when its benefits start reaching to the poor
By AMANULLAH BASHAR
Aug 18 - 24, 2003
The definition of a free country has been described by somebody who says "In a free country there is much clamor, with little sufferings, in a despotic state there is little complaint, with much grievance". If this saying is taken as true, Pakistan seems to be on top of the list of the free countries around the world because every body is clamoring and raising accusing finger all the times.
Whether it is print media or the electronic media network, all of them are full of noise, mostly over different issues. It is, however, unfortunate that most of these complaints do not translate the grievance of the people, instead the issues being raised by the representatives of the people within or outside the assembly are mostly serving the party interest. People cast their votes in their favor of different parties in the hope to get their problems resolved and hardships are redressed. The innocent people usually pin high hopes that their representatives in the assembly would do something concrete for a large population of educated but unemployed youth, they would do something for bringing down the electricity charges at an affordable level. The exorbitant and unrealistic price of electricity in Pakistan is the nastiest problem of the day. It is back breaking burden for the honest consumers while it is instrumental in forcing a large segment of the population for power theft reflected in the huge line losses of the utility companies in the country. A free for all situations persists in the education sector where people belonging to middle class of the society cannot think about quality education for their children because of unaffordable price of education. There are attractive slogans that education and health is the right of every child, but the ground reality is that even the cost of the uniform of so called educational institutions has gone beyond the reach of the common man.
Instead of raising a strong and serious voice of concern over these issues, our representatives are more concerned about party interests, LFO, uniform of the president and declaration of Friday as weekly holiday.
With this background, people of Pakistan celebrated the 57th Independence Day with renewed hopes that the days will come when their social, political and economic problems will be resolved.
It is torturous to see that the poor who are the real builders of this country are still desperately want greater access to land and water, basic services of health care, education and jobs. Their standard of living is the same either they are living in the urban or rural areas. They are extremely vulnerable as they lack access to political power and justice especially the women folk who are really worse off in the whole scheme of deprivation. These comments have been made in the National Report on Pakistan Participatory Assessment, released by Planning Commission. The report recommends more investment in the private sector, human capital and in public works programs. It also favors minimum wages policy. Highlighting the views of the poor, the report says that the policies are wrong. Nobody listens to the poor. The policies that are developed without participation of the people from the grassroot level make situation even worse. There are still a huge number of families without any shelter on their heads; hence there was an urgent need for land reforms in Pakistan.
Javed Sadiq Malik, Secretary Planning Commission while expressing his observations on ignoring views of the poor while making policies, said that Planning Commission has directed all its members to stay three days a month in farms and fields for interaction with the common people. They would also make a monthly report that would be made public. The meetings of the ECNEC and NEC will be held twice a year, which would also improve monitoring of the development spending. National Resource base on which livelihood in rural areas depend is dwindling quickly. There is deforestation, decrease in livestock heads and shrinking landholding. Poor are especially vulnerable to a range of negative trends, shocks and seasonal variations. Inflation, unemployment, water resource de-gradation are increasing bride price, abuse of women, crime, conflict and drug addiction. There is much evidence that government safety nets program like Zakat and Baitul Mal, or drought relief do not reach the poor and where these funds reach up to the poor, the size of the transfer is too small. The report also highlights local government under devolution plan, which has one of the main responsibilities to provide health care facilities. Health care spending was considered as the prime reason for pushing people into poverty.
It is the general opinion of the less fortunate segment of the society that employment is the main route to get out of poverty. Bonded and child labor, exploitation of women at work places and unfair condition of employment contribute to poverty significantly.
The poor in Sindh, attribute their sufferings to robbery, theft, violence and murder which increasing the sense of insecurity. They are demanding access to justice especially women must be given greater access to justice. What a society where the innocent but poor people are praying for access to justice. It is too late now. More than half a century has gone into the past. No further delay in dispensing the justice.
As far as the economic picture of the country was concerned it appears to be rosy and has taken a turnaround. People at the helm of affairs claim that the country has achieved the status of economic independence. As far as sovereign credibility and the financial health of the country were concerned, it is in a position to get out of the IMF regime. According to Finance Minister Shaukat Aziz, Pakistan would do away with the IMF program by next year. Pakistan is in a position to pay the advance installment of debt repayment in addition to the current dues. This is certainly an economic feat of the managers and deserves appreciation. It is the achievement which the country cannot even dream in the past, said a financial expert. It is a matter of great satisfaction that the macro economic indicators have continuously registered a progressive trend during the last three years. Pakistan's economy was in a takeoff stage as manifested in the sharp rise in the real estate business, and year's best performance of Karachi Stock Exchange in Asia throughout. It is, however, important to keep in mind that Pakistan's thrust must be not only on the progress of the economy but to make it robust and sustainable to bear any economic shocks and withstand the external factors that could distract the economy from the path of progress. However, despite the situation in Iraq and Afghanistan and tension mounting relations with India in the past one and half year there was no negative bearing on the course of economic progress in the country. Currently, Pakistan is striving for issuing of Asian Bonds and participating in the Bond Market development not only in the domestic market but in other countries with the cooperation of Thailand and other economies. Pakistan was also considering chipping in some amount in the Asian Bond Fund which was established in June this year.
There was, however, the need for an integrated approach to reap the fruits of the Bond initiative by involving Asean, Asean+3, ECO and most importantly the region of South Asia.
It will not be out of place to mention that country's financial reserves have crossed the mark of $11 billion; the exports crossed the unprecedented mark of $11 billion at the end of the last financial year. The textile sector, the mainstay of the national economy also performed extremely well and contributed over 67 per cent of the total export proceeds.
At present, the main focus of the government is textile related industry, its modernization and quality products so that the country could enhance its textile exports. Working on these lines, the economic planners are making efforts to gear up textile industry as the engine of exports and that is the reason Pakistan is focusing on the textile industry. In the face of forthcoming WTO regime, the textile industry has to prepare itself to produce world class products to capture more and more markets in the world.
In a bid to find new markets for Pakistani products, the Ministry of Commerce has decided to establish a marketing corporation comprising professionals with an assignment to search for new markets. In this connection, the government withdrawn the marketing function from the Export Promotion Bureau (EPB).
Consequently, EPB has been separated from the ware-housing plan, and professional companies in respective countries would be selected to create storage facility for exporters. In return, the EPB would be assigned a new job of disseminating WTO awareness among exporters. A new department will also be added to the EPB fold with an assignment to provide guidance on imports.
For product up-gradation, the government has created a fund to the tune of Rs7.5 billion which would be spent on development of products, with equal equity from the State Bank and private sector. Funding would also be sought from multinational agencies for joint ventures in various export-oriented industries.
In a bid to improve social compliance of export-oriented industries compulsory under WTO regime, 12 major industrial zones have been selected for improving infrastructure and environment emphasized under the new trade regime. The development work will be done under the concept of corporate equity with the government and the private sector sharing cost of the project.
The stable exchange rate and financial discipline maintained by the central bank of the country also greatly helped in restoring the confidence of the overseas Pakistanis who remitted over $4.23 billion during the previous financial year. According to official figures, Pakistan received the highest ever amount of home remittances during the previous financial year. Never before in the history of Pakistan, had the country received more than $2.88 billion as remittances.
The home remittances during the fiscal 2002-03 amounted to $4,236.85 million as against $2,389.05 million during fiscal 2001-02, depicting an increase of 77.34 per cent. The amount includes cash flows, encashment of FEBCs and FCBCs, Hajj remittances and remittances from Iraq-Kuwait war victims. Out of the total remittances received during the last fiscal, workers remittances contributed $4,107.88 million as against $2,299.62 million in 2001-02 showing an increase of 78.63 per cent.
The export target for the current financial year has been set at $12.1 billion which seems well within reach in view of the growing market accessibility especially in the European market, aggressive marketing campaign launched by the export promotion bureau for the new markets and increase in the export surplus as well as in the list of exportable items. Since the import target has been fixed at $12.8 billion, the trade deficit for the current fiscal year is projected at $700 million. However, the trade and industry was of the opinion that instead of a trade deficit, the year end may experience a trade surplus.
In order to facilitate exporters, the government is planning to establish more export processing zones in different parts of the country besides giving the status of export cities to various categories of exportable items in Karachi, Lahore, Sialkot, Gujrat, Guranwala and Faisalabad.
It is, however, worth mention that the policy of setting up export processing zones has not produced tangible results during last two decades. It has come to notice that instead earning foreign exchange for the country, these non-tariff areas generally identified as export processing zones are misused by the corrupt and the goods imported duty free are smuggled in to the tariff areas of the country. Karachi Export Processing Zones is the worst example of such cases of corruption. Initially, the Karachi Export Processing Zone was established to attract foreign investors and a huge land spread of 1000 acres was spared for the purpose. Initially some investors from different countries shown their interest in the project and some of them also set up their industrial units. However, almost all foreign investors have gradually disappeared from Karachi Export Processing Zone and now it is run by the Pakistani traders and industrialist. The Karachi Zone still have a land of over 500 acres waiting for the investors. The ideal location of the zone deserves its utilization for some better purpose instead of allowing it to be misused by the inefficient and the people working purely for personal gains.
The capital market which is said to be the barometer of the economy has created history. Recently, the Karachi Stock Exchange made history when the KSE 100-share index breached the barrier of 4000 points. The factors behind this surprising performance were said to be the massive buying triggered by a galore of higher dividends and some other positive developments on the corporate front. Both the index and the market capitalization stood at their career-best level, signaling the continuation of the Bull Run in the remaining part of the financial year. One of the analysts from a security company was of the view that the real growth of the capital market was still in the store. He said that the market has the capacity to take the index even more than 5000 points in near future, however, the government's positive economic policies, and the supervisory role of the SECP played an important role in restoring the confidence of the investors.
Despite offering much attractive incentives and policies friendly to the investors, the volume of investment does not translate the investment potential the country has. Pakistan could attract some $700 million foreign investment during financial year 2002-03. That investment too was directed towards particular areas of investment and lacks diversification. Most of the investment was attracted by the energy sector while the remaining portion went to the credit of the textile sector. A critical look on the whole situation identifies following irritants in the way of flow of foreign investment to Pakistan. Besides taking note of the comments made by the World Bank recently the police and the judiciary in Pakistan were corrupt and do not deliver the responsibility it is suppose to. Comments from US were also carrying the same message. Unless the country was made free of corruption the investment neither from abroad nor within the country will flow at a massive scale. Besides the ugly face of corruption, the hopeless quality of the infrastructure facilities and the exorbitant price of utilities are the real irritants to the investment.
A leading textile industrialist has rightly pointed out that investment from domestic resources plays even more significant in the growth of the economy as compared to the foreign investment. It is the satisfied local investor who provides ground and recommendation to attract the foreign investors. "Unless the local investors were made satisfied, the foreign investment may not start coming in at the desired level," said industrialists. Every day a number of officials from different agencies visit the industrial units not for official purposes but for personal benefits and this is an open secret known to every body. "We have become habitual to overlook these elements that are now deeply routed in all corners of the society."
Despite the fact that the people as well as leaders of India and Pakistan have publicly admitted on many occasions that war that is the science of destruction has stalled economic growth of the two countries. Unless the issue of Kashmir was resolved, the people from both sides will continue to suffer from economic constraints.
It is of course a positive sign that both sides are expressing their willingness to resolve the issue through dialogue. President General Musharraf, has on many occasion declared in unequivocal terms the resolve of Pakistan to enter into bilateral talks with India at any place, at any time and at any level. President Musharraf has also offer India for ceasefire on Line of Control (LoC) recently. However, that offer was rejected by the Indian leaders for the reasons best known to them. However, the blunt response on the part of Indian leaders was widely condemned. Even the leader of Indian delegation Laloo Parasad has said that they would be lodging a strong protest against Indian government for rejecting the offer made by the President of Pakistan.
Such a determined resolve should also come from across the border if the Indian leadership really serious to alleviate poverty from that country responsible to feed a huge population of one billion plus.
The open conflicts between Pakistan and India were viewed with serious concern at a recently held seminar which was inaugurated by President Pervez Musharraf in Islamabad. The speakers recorded their serious concern over what they called pervasive instability in South Asia region, particularly due to strained relations between the two countries. Inamul Haq, former minister of state for foreign affairs capsule in "strategic terms" was the worry of international community over the possibility of resort to nuclear weapons by either side if a real conflict breaks out. Some speakers voiced their concern over onward proliferation and radioactive material or nuclear weapons falling into undesirable hands. The seminar was also attended by the experts from China, Japan, Russia, Germany, UK, USA, Bangladesh, Sri Lanka, Nepal and India.
Since the creation of Pakistan and India in 1947, the two countries had three wars on Kashmir dispute and added to the hardships of the people. In fact the solution of the issue lies in the strong and selfless political will instead of using the issue for political gains. People in the other parts of the world are coming closer to each other to work together for their economic goals. More than 14 countries in Europe have set an example of co-existence by removing all border, visa, currency barriers and have become a single eurozone to achieve better living standards for their people.
There are talks that both India and Pakistan are very close to the solution of Kashmir issue and the present exchange of delegations are the steps in that direction. After the visit of Pakistani political leaders to India, the Indians have also responded in the same spirit by sending a large delegation of parliamentarians, journalists and prominent people from other walks of life.
Recently, a 59-member Indian delegation of parliamentarians and journalists visited Pakistan to participate in a peace conference at Islamabad. Prominent among the visiting delegation were the former chief minister of Bihar Laloo Parashad Yadav and Ram Jethmalani, Chairman of Indian Kashmir Committee and member parliament. While leaving for home, the members of the visiting delegation expressed high hopes for peace and cordial relations between India and Pakistan. "We have strong hopes for peace. The countries should continue to talk for peace. We brought the message of love and peace and are grateful to Pakistan treating us well, said Laloo Parasad. During our stay here, we felt like being in our own country. We want Pakistan and India to united and work for the development of their people."
The visiting Indian delegates had meetings with President Musharraf, Prime Minister Jamali and other politicians. The visiting Indians observed that the crux of the talks was that we are poor nations and cannot afford war because that would devastate us, Laloo observed and added that Prime Minister Vajpayee has also stated that he wants to stop and settle the issue of cross-border extremism through dialogue. The visit has boosted hopes for peace. People of both the countries want peace in the region so that the two countries could progress. Almost all Indian political parties are also in favor of peace. It is important to note that the visiting Indian delegates also had talks with political leaders and agreed to talk on a party-to-party basis to end differences between the two nations. Laloo was of the view that the ongoing visits of leaders from both sides would succeed in building confidence and help overcome the problems between Pakistan and India. Another group of 14 Pakistani parliamentarians, mostly from PPP and PML (N) also decided to pay a one-day visit to India on the occasion of Independence Day. This visit was the part of the various peace moves initiated both at the government and the people to people level, to promote harmony and cordial relations between the two countries.
I.A. Rehman, Director, Human Rights Commission of Pakistan said that in view of the confidence building measures initiated recently, it was decided by the people for peace, a forum of peace activities, political workers and NGOs that a delegation of Pakistani parliamentarians cross into India and stay overnight at Amritsar. Pakistani parliamentarians visiting India were those carrying passports with special SAARC stickers, (a facility that enables them to visit all the seven SAARC countries without any hindrance).
It is said that coming events cast their shadows before. It appears that the days ahead must be full of events. The events of peace and progress both on political and economic fronts. Not only the concerned parties but the world power have started realizing the potential danger of the Kashmir conflict hence all the relevant parties seem to have prepared for a peaceful solution of the dispute in their own interest.
Realization of the problem means that half of the battle is won. The country is getting stronger day by day on the economic front. However, the economic achievements would be meaningful only when its benefits start reaching to the poor.