Priorities for economic revival
By Sheikh Javaid, Chairman
EPZs Investors' Council
May 08 - 21, 2000
There is a famous proverb in English, which says, "Journey of a
thousand miles begins with one step". Obviously a movement has to be initiated to
accomplish an assignment or a project. Muslims of the Sub-Continent achieved independence
after a very long and historic movement through hardship and sacrifice in the history of
modern world.
The international community observed the largest migration and mass
massacre in first half of the last century. It is true, that Muslims of the region were
finally successful in establishing a homeland for themselves separate from Hindus of
undivided India. The Hindus used to hold power and economy for themselves and did not want
to share these privileges with Muslims. It is also true that by Pakistan's coming into
being, Muslims also achieved the liberty of performing their religious obligations and
activities freely. But unfortunately, soon after independence, majority of the people of
this country forgot their objectives and commitment for which they had experienced
considerable sufferings.
Most of the politicians, traders, feudal-lords and public servants
etc., got involved in activities, which could bring them prosperity alright, but at the
cost of national interest. The desire for becoming rich, overnight, gave birth to numerous
social as well as public crimes. The nation as a whole soon became ignorant of the basic
ideology and gradually lost the precious sense of national spirit. Lavishness,
extravagance and abuse of power became the order of the day. An atmosphere of
discrimination among common, as well as discouragement to the able was widely observed in
every walk of life. This resulted in hatred and enmity amongst different sects instead of
promoting a healthy brotherhood and friendly environment, which is a pre-requisite for a
proud nation.
The policies framed by so-called 'experts' for a newly born country did
not match the local resources, conditions and requirements. Moreover, much dependence was
observed on short-term policies and adhocism. Nevertheless, the country's economy
witnessed the ever-changing governments coupled with inconsistent policies during last
half century. This added fuel to the fire. Both economy and stability of the country
received severe setback.
Generally speaking, a country is known either as an importer or an
exporter of certain products or produce. In our case, we export items like Cement, Sugar
etc., in the industrial sector while Raw- Cotton and Vegetables in the agriculture sector
for some years. However, it is disappointing that we have to import the same items in the
following years because of the poor planning and mismanagement.
How can a country's economy prosper if still larger import bill has to
be paid on same commodities? The gap between imports and exports of the country is
widening to an alarming situation. The problem is that we lack to have a goal before us.
Unless we have a target to achieve with firm determination as a nation, we cannot plan the
course of our efforts and development of a mechanism for the achievement thereof. After
all, we have to take One step to begin our Journey to the destiny. Nonetheless, that One
step should be positive, visible and in the right direction too.
The following areas require immediate attention of the people at the
helm of the affairs, which I, as a patriotic Pakistani have tried to highlight the
Priorities For Economic Revival, through this article. Both problems and their possible
solutions are humbly stated which will help speak our actions louder than words.
Education
We have entered into the new millennium hand-in-hand with illiteracy
and poverty. After 52 years of independence, our literacy rate has rather dropped what to
say of making any progress in the area. It is a matter of dis-appointment that we are
spending only 3% of our National Income in this vital field which should have been at
least 10% even in this critical economic scenario. It is an established fact that without
awareness and knowledge we cannot keep a pace with the ever-flying time, nor we can face
the challenges of the modern world. The last century witnessed remarkable inventions and
discoveries such as exploring the Moon, development of Computer and of course certain
genius Theories etc. The credit of these remarkable achievements goes to various countries
of the world whereas; we have entered into the new century without any notable
contribution at our end. On the contrary, it is sad to note that in this era of
unbelievable inventions and discoveries, we are only preparing our new generation for
repairing Radio and TV to meet both ends. Much has been said and written on this burning
issue of the country but we should be ashamed of ourselves for turning our schools into
stables. Are we not being cruel by keeping horses at places where our children should be
for gaining knowledge? The Chief of the Consular services at US Consulate General, said in
a seminar recently, and I quote " Start Now-Teach All". Unquote, the situation
in education sector has worsened to the extent that we are being asked by the foreigners
to rectify condition in this area. It is a matter of great concern that since
independence, every government announced lot of facilities and incentives for the
betterment of education personnel and institutions but unfortunately no significant
improvement in the conditions of education related people and organizations was observed.
I strongly feel that an unsatisfied teacher cannot produce a brilliant Pakistani.
Moreover, for the last 52 years we have been spending billions of rupees on constructing
new school buildings. People of Pakistan are unable to understand as to why the schools
can not be established in the buildings of mosques, which by the grace of Almightv Allah
exist in thousands in number countrywide. Is there any harm using 'Baitullah' in spreading
education to our nation? Time between 'Fajr and Zuhr prayers' can be managed easily for
the purpose thus saving billions to our treasury in the light of recent historical
judgement of the honorable. Supreme Court, a 'Riba Free' banking system should be
developed. A considerable number of personnel will be required to run these interest free
banking units in the country. The mosque educational institutions can play a significant
role in producing graduates educated in a religious environment groomed to establish and
promote interest free banking beside regular education. Some other suggestions for the
betterment in the area of education are.
a) Compulsory education upto middle class.
b) Implementation of common syllabus throughout the country in order to
eliminate 'class discrimination'.
c) Replacement of backward system of yearly examination with 'Semester
System' which is followed internationally.
d) Management of every government institution by Board of Directors
which includes two members from the private sector. In a recent statement the Chief
Executive of Pakistan General Pervez Musharraf has very generously announced funding of an
additional amount of Rs. 7.0 billion for revival of economy of the country. This handsome
amount is of course a great sacrifice by our Armed Forces for their fellow countrymen I
appeal to the Chief Executive that orders be issued that at least 50% of this amount
should be spent on education alone.
Kalabagh Dam
Lot has been said on this vital issue of national bearing. The project
is of paramount importance for the good of common of our country especially in the present
critical economic scenario. Much to our regret that the matter has been made controversial
and propagated as such by a lobby which does not like Pakistan to prosper. The propaganda
has unfortunately influenced the innocent minds of a section of patriotic Pakistanis in
the province of Sindh and NWFP. According to technical reports however, the Dam when
operative will benefit all the four provinces of the country. As a result of negative
interpretation, the project has been delayed considerably. On the other hand, the current
water levels at both Mangla and Tarbela Dams have dropped to an alarming point.
Nevertheless, even with the normal levels, the existing Dams are insufficient for
irrigation and power generation of which the country is facing an acute scarcity. Today,
water and power are the two essential raw materials for Agriculture & Industry. It is
therefore essential that consensus over this issue is obtained without further loss of
time and the Kalabagh Dam be initiated and completed immediately. The civil governments
could not succeed in overcoming the opposition on this subject. However, the present
regime has resources to accomplish this Project of National importance. The dream of
Self-reliance in the field of agriculture cannot come true without it. So following the
famous Phrase 'Now or Never ', it is urged upon the authorities to proceed to the target
with the devotion it has to its credit.
Development in Balochistan
Balochistan is a great province of Pakistan and a land of ancient
civilization. It has been neglected since independence of our beloved country. The
province of Balochistan is the largest in area and smallest in population. The vast and
barren land of the province should have been utilized for setting-up Industrial Units long
before. On the contrary, our policy makers were busy establishing industries on fertile
and Agriculture-based lands in the province of Sindh and Punjab. As a result of this,
industrial waste, chemicals and other environment-pollution destroyed a considerable area
of land. This could have been used for improvement in agricultural progress instead of
waste of precious agricultural land itself by setting-up industrial units there. These
agricultural lands are already facing the threat of water-logging beside other calamities.
We cannot atford to have a 'Fertile Crescent' in this part of the world. We have been
gifted with a vast land in Balochistan to establish industry without the hazard of
damaging valuable crops. I would further suggest that a '5 year Tax Holiday' be announced
for the new industrial units in Balochistan so that the local as well as foreign investors
are attracted to invest here. Secondly, we must concentrate on early completion of the
deep-sea port at Gwader. The project, like many others, has also passed through
controversies resulting delay in implementation. The lobby, which is creating hurdles in
establishment of permanent peace in Afghanistan, is the same, which does not like Gwader
to emerge as a commercially viable Port in the region. It is said that history of Pakistan
would have been different if a deep-seaport was completed at Gwader immediately after its
association with Pakistan and even the debacle of East Pakistan would not have happened.
An early completion of a commercially developed deep-water port in Balochistan is the need
of the hour. Beside serving the country, Gwader port will cater to the requirements of the
whole region covering Iran, Saudi Arabia, UAE, Sultanate of Oman and the Central Asian
States (CAS) thus giving a boost to the national economy. Moreover, the Karachi/Gwader and
Gwader/Ratto Dairo highway when developed and upgraded will pass through Turbat, Khuzdar
and Shahdad Kot. This would provide much easier transportation of goods and people between
the provinces of Pakistan. It would be interesting to note that improvement of
Gwader/Quetta road will result in reducing about 200 KM of distance. This would again be
an added attraction to the local as well as foreign industrial investors planning to
invest in the province of Balochistan. Exploration of Mineral Resources and establishment
of Fisheries and Fish Industry should also be given proper attention. Again, with the
establishment of Livestock Farming, the self-sufficiency in meat requirement of the
country will be achieved beside export to neighbouring rich countries. The province in
question already enjoys a lead in fruit production and produces over 50% of the country's
total crop of apricots, grapes, apple, dates and almonds. As soon as polishing, grading
and packing facilities are improved, the province can become a significant foreign
exchange earner. Recently, a Saudi firm has decided to invest about 60 million US dollars
for setting-up an export oriented unit for producing food grains and vegetables in
Balochistan in Naseerabad Division. Similarly, other regional and international investors
can be invited to invest in the province I am sure that if we are be able to take these
measures, the poor of Balochistan will also see the fruits of their sacrifices spreaded
over years.
Reconstruction of Export Processing Zones Authority
(EPZA)
We all know that maintenance of an existing unit is more important than
construction of a new one. It is a tragedy that the bureaucracy in Pakistan has always
been interested in setting-up new organizations/institutions whereas no proper attention
has ever been given to Re-construction and/or maintainance of the existing ones. That is
why the number of sick units in our country has been increasing day by day. The
authorities simply forgot the famous idiom 'a bird in the hand is worth two in the bush'.
Export Processing Zones Authority was established about two decades
ago. The first unit was launched at Karachi, which is called Karachi Export Processing
Zone (KEPZ). The prime objectives for setting-up the EPZ were.
a) To invite foreign Investment.
b) Foreign Exchange Earnings.
c) Transfer of Hi-tech. and
d) To create job openings for local labour. In anticipating
achievements in above objectives, huge investment was made in the shape of development of
infrastructure and related essentials. An attractive package of incentives was also framed
and offered to investors. Unfortunately, majority of these objectives could not be
achieved, mainly because of mismanagement, corruption and abuse of incentives by a few. As
a result, even an area of about 500 acres only could not be utilized in full in twenty
years' time. Due to the situation at KEPZ, some of the investors including overseas
Pakistanis, soon realized the conditions and gave a halt to their operations, closed their
factories and said good-bye to KEPZ. A few genuine investors are however, still working
and are trying their level best to give boost to this declining unit. In fact they are the
ones whose efforts have kept KEPZ still alive. The miserable conditions at KEPZ have also
been reported by print-media from time to time. In short, KEPZ has not been able to prove
itself as a model EPZ. KEPZ is not only becoming economically un-viable but has also
become a reason for lack of interest by foreign investments at other proposed EPZs in
different parts of the country. Circles of Trade & Industry suggest that a gross
Re-construction of EPZA be initiated to avoid a complete collapse of the Unit. There is
also a suggestion that each EPZ unit be managed by a Managing Director and not by the
Chairman directly, like other State owned enterprises. This will obviously help the
management make quick decisions in the larger interest of EPZ and would of course help the
Chairman discharging his responsibilities at the same time. I suggest the concerned
authorities to constitute an Advisory Council within the Ministrv of Industries,
comprising of members from private sector who should be responsible for Re-construction of
KEPZ. The proposed council should also be inducted for establishing new EPZ units in the
country. The second EPZ unit however, is suggested to be developed at Gwader for a number
of reasons. Gwader's Seaport, Airport and its peculiar geographical situation are salient
attractions for the prospective investors.
Tourism
Tourism is yet another sector, which has not been given due attention
since independence. People who travel internationally know as to how much foreign exchange
is being earned by the western world and even by the Far Eastern countries like Malaysia,
Singapore, Thailand, Hong Kong etc., in the field of tourism. No doubt, world is full of
natural beauty. But people including myself who have travelled a lot within the country
beside travelling abroad will agree with me for claiming some of the landscapes and scenic
points of Pakistan as much better than any place in the world. These spots if developed
properly, can fetch huge amount of foreign exchange from tourists. The famous Kaghan
Valley, Gilgit, Chitral Valley, Kafirstan and areas surrounding Silk Route are really gift
of Allah to the mankind beside Murree, Nathia Gali, Patriata and other hill-stations in
the region. These God gifted areas can play a vital role in earning foreign exchange
provided modern amenities are developed and made available to the visitors. It is a matter
of deep concern for every Pakistani that after more than half a century of independence,
we have not been able to provide the basic facilities i.e. Gas, Electricity, Roads,
telephone etc., to some of these most beautiful tourist attractions in Pakistan. The work
of development of tourism should be initiated without further delay. Tourism development
is not just constructing an un-manned 'rest-house' or running just an old fashioned
restaurant at Far-flung areas. People of Pakistan are surprised as to why significant
improvement in this vital field has not been achieved when millions have been claimed for
expenditure by the concerned department every year. Time has come that the people who have
been given responsibilities by the government must work sincerely and steps taken by them
in the area of tourism development should be visible even by a common Pakistani. Another
suggestion is to develop Parks in the country. These include Amusement Safari and Theme
Parks. Such parks are also successfully operating in Hong Kong, Singapore, Thailand and
even in India. International community should be invited to invest in this sector who can
bring technology and finance on 'Build Own and Operate' or similar attractive terms. I
suggest that the barren lands lying idle in the provinces of Balochistan and Sindh be
converted into revenue earning projects by establishing these parks in the country. This
again, is an area where investments can bring considerable returns including foreign
exchange for Pakistan
Micro Credit Scheme / Bank for the Poor
The present government has reportedly announced a plan to float a
financial scheme to help the poor. It is a thought in the right direction but as far as
its modus operandi is concerned, I would rather opine that establishment of a full-fledged
bank would cost too much. As an alternative, branches of National Bank of Pakistan, which
are spreaded country wide, should be used for the purpose. Provision of a separate counter
within the branch can deliver the goods It is worth mentioning here that the previous
governments launched certain schemes such as 'Loans for the youth, 'Prime Minister's
Public Transport Scheme' etc., etc. The history of Micro Credit Schemes is as old as 1970
onwards. However, due to improper management, the schemes failed soon after their
commencement for obvious reasons. It is therefore needed that before implementing the
proposed 'Bank for the Poor', detailed and authenticated feasibility report be obtained.
All loans should be released strictly on merit. This will ensure secured financing unlike
in the past when loans were granted against fictitious and exaggerated values of
Guarantees and Securities.
