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Economic Revival of Pakistan By Establishing New Export Processing Zones

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By Sheikh Javaid, Chairman-EPZIC
Dec 27, 1999 - Jan 02, 2000

Like any patriotic Pakistani, at this hour of economic crises, I feel that it is my earnest duty to submit a few suggestions and highlight certain issues which require immediate attention in the larger interest of our beloved motherland. However, I would like to restrict myself to Exports, through Export Processing Zones in the country.

Foreign Exchange earnings and Foreign Investments are of paramount importance for any country, especially for a country with limited resources, low per capita income and high rate of population increase per annum. To achieve this objective a number of countries in the world have set-up units of Export Processing Zones. Another important objective in establishment of an EPZ by a developing country, is the transfer of Hi-Tech. These units also provide Job Openings and therefore play a vital role in the area of employment in the respective countries.

Most of the EPZ units in the world are functioning satisfactorily and are instrumental for raising Foreign Exchange Earnings and Investments, beside attracting Hi-Tech thus creating Job Opportunities for their labour. The EPZ units in our region are also playing an important role and examples can be quoted of Jabel Ali (UAE), India, Sri Lanka and even Bangladesh.

In the year 1998, the then government announced the scheme for establishment of New EPZs in other cities of the country. These include Sialkot, Risalpur, Lahore, Faisalabad, Gwader etc. The two units launched recently at Sialkot and Risalpur could not attract any Foreign Investment. The negative response of the foreigners may be due to the following considerations:

A) Inconsistent Government policies in the past.

B) Location of EPZ being far away from Sea Ports.

C) Inadequate Air-Travel facilities available.

D) Insignificant geographical location for marketing of finished goods.

In my humble opinion, the Export Processing Zones should be first set-up at Sea Ports and not at other cities of the country. The fast and true results can only be achieved at Sea Ports. As such it is proposed that New Epz Units be established at Gwader, Ormara and if possible at Pasni, in the province of Balochistan.

This will, at one hand, be useful for our beloved motherland and beneficial for development of the province of Balchistan on the other. There is no need to explain the strategic geographical situation of Gwader being located in between Karachi and UAE through the Sultanate of Oman and Iran on one hand and at a door-step of Central Asian States (CAS) on the other. Moreover, Ports in Balochistan could be safer from defence point of view as well.

Supporting the proposal, I would like to add that Foreign Investment along-with HiTech could be attracted at Gwader and Ormara being Port Cities with access and exposure to CAS world. The port of Gwader can serve as a " Regional Hub" with the recent Geo-political developments in the region.

The port when developed, will be in a position to cater to the requirements of the trade between UAE, Oman, Saudi Arabia, Qatar besides serving as a Gateway to the land locked countries of Central Asia.

It is an established fact that sea transportation is the cheapest mode of transportation in the world. It is a competitive world and a producer or a manufacturer has to be cost conscious. As such a Foreign Investor will obviously feel more comfortable by setting-up an industrial unit at or near the sea port. Moreover, arrival and dispatch of goods between two countries can be more organized at a port city rather than being at far flung areas.

As far as Gwader is concerned following can be quoted as plus points:

A) There is already a Mini Port (Fish Harbour) with the capacity to handle ocean vessel upto 1000MT.

B) The Deep Water Port and Export Processing Zone can be developed simultaneously.

C) An area of covering 100 hectares of land has already been earmarked for establishment of EPZ while another 4000 hectares have been reserved for Industrial Zone.

D) Recently a ferry service to and from Karachi, Gwader and UAE has been announced. It is hoped that travelling facilities will be improved in the area.

E) Gwader is also enjoying the status of International Airport as air service has been extended upto Oman.

F) Road links to Karachi and Highway Projects have also been planned for access to Pakistani cities and CAS.

Water resources from Dasht River Head and Mirani Dam can be achieved beside Desalination Plants etc. Power generation, can however, be achieved through WAPDA Plant at Pasni. For further requirements, the private sector itself can achieve power generation. In view of above, one can visualize the swift development of infrastructure at a place like Gwader followed by establishment of Industrial Zone and EPZ there.

The writer has visited Gwader twice and is of firm opinion that development of Gwader Port and establishment of an Export Processing Zone there can bring about a revolution in our country's economy beside bringing a positive change in the existing conditions of this neglected province of our country. The poor of Balochistan will also see the fruits of their patience and sacrifices spreaded over years. Again the province of Balochistan is full of mineral resources. Unfortunately, no concrete steps have been taken in the past to develop and exploit these natural resources. If we succeed in attracting foreign investment and transfer of Hi-tech, the task of development of mineral resources can also be accelerated which will obviously give a boost to country's economy with passage of time. At present, fishing is playing a vital role in local economy, though modern technique in the area of catching, preservation and export of fish lacks. Here again, with the development in other fields of economical activities, improvement in working style and technique will follow, thus bringing betterment in the overall conditions of local inhabitants. Fish exports can earn a huge foreign exchange. Development of fishery and establishment of fish industry will play an important role in providing employment to communities along the coastline around Gwader.

The land of oldest civilization should be exposed to today's modern world. The beautiful city of Gwader with its surroundings i.e. the East and the West Bays and mountains on the sea side offer a very pleasant natural outlook and deserves a better status than existing. The city providing shelter to around 50,000 people today, may grow to accommodate a population of 5 lacs in ten years' time.

If properly planned, constructed and managed scientifically by sincere and devoted people, the EPZ project in the province of Balochistan can even supersede the one, which is existing today. The international community will be attracted with an environment gifted with virgin sand, unpolluted seashore, and a vast barren land in the province with exposure to the commercial world.

The early revival of our country's economy demands reconstruction of the present EPZ unit at Karachi and establishment of 2nd EPZ unit at Gwader and / or Ormara.

The writer has exchanged views with various government officials on the subject and also had an opportunity of a detailed meeting with one of the chief ministers of Balochistan a few years back. The undersigned also submitted a working paper on "Developing Ports & EPZ Units" to the past regime but it appears that vested interests did not like the idea and did-away with the suggestion by shifting the direction of the policy makers towards area of lesser importance in other parts of the country as compared to Gwader and Ormara.

The interaction of businessmen at various forums also supported the idea and majority of businessmen and industrialists were enthusiastic and optimistic about the success of an Industrial Export Processing Zone in the province of Balochistan. The largest province of our country in area and smallest in population has the capacity to absorb people and investment.

Last but not the least, the people of Karachi in general and business community in particular are also concerned about the conditions prevailing in the city specially in the area of law and order.

The local investor is also looking for another place for further investment. If provided an opportunity the local business community of Karachi will also like to invest in Industrial & Trading Units at Gwader. Beside anticipating fast industrial development in Balouchistan, we will be serving the cause of improvement of civic conditions prevailing in the city of Karachi by minimizing corruption, Congestion and crime to a great extent. As a result of construction of deep-sea port at Gwader, the two major objectives could be achieved simultaneously, namely, check on law and order situation in Karachi as well as on ever increasing traffic of goods and people from one province to another. Our imports for the province of Punjab and NWFP and even for interior Sindh will pass through Balochistan without entering the already over-crowded roads of Karachi. Similarly, exports from all provinces of the country will have direct access to the sea port. The Karachi/Gwader and Gwader / Ratto-Dairo highway will pass through Turbat, Khuzdar and Shahdad Kot. Moreover, improvement of Gwader / Quetta road will result in reducing about 200 km of distance. With the initiative of present government, Gwader will InshaAllah soon emerge as a model sea port having a model export processing zone by all international Standards.

I therefore propose that a Committee be established which could prepare recommendations and proposals for improvement of conditions at the existing Ports/Epz Unit and establishment of New Ports/Epz Units in Pakistan.