SYNERGIZING ECONOMIES OF INDIA AND PAKISTAN
Perception about Pakistan needed to be changed in India
By KHALIL AHMED
Jan 09 - 22, 2006
Amin Hashwani, President India-Pakistan CEOs Business Forum has observed that Pakistanis are neither terrorists nor extremists, therefore, there is a need for a systematic campaign emphasizing the change of perception about Pakistan across the world to effectively counter the propaganda of the vested interest tarnishing the image of Pakistan.
Hashwani was delivering his key note address at a joint conference jointly organized by SZABIST Karachi and Delhi School of Economics on "Synergizing the Pakistani and the Indian Economies" at SZABIST last week.
He added that the perception about Pakistan needed to be changed in India. Indians are our brothers and we need to cooperate with each other for peace, prosperity and better trade ties. He praised the role of present government for its efforts to harmonize the otherwise strained relationship with India and other countries in the world.
Hashwani was of the view that there are so many serious trade barriers which we need to highlight and both Pakistan and India need to remove them at the earliest to bring lasting prosperity for the poverty ridden people in the region.
The delegation's next destination is Larkana where they intend to visit Moen-jo-Daro, which is frequented by hundreds of foreigners every year and is one of the world's most famous historical places.
It may be mentioned that an Indian student-delegation accompanied by two faculty members, Dr Shreekant Gupta and Hemanshu Kumar of Delhi School of Economics, had come to Pakistan on December 24, 2005 for almost a month long tour.
The entourage of 22 guests from India, 20 students and two faculty members, reached Lahore, the initial destination of their tour to our country.
Hemanshu Kumar told PAGE that everyone had treated the delegation with utmost hospitality wherever they went. He thanked all the organisations viz. LUMS, SZABIST, International Islamic University Islamabad, Higher Education Commission, SPDC, Pakistan India People's Forum for Peace and Democracy, World Wide Life Fund, SANDEE, Airblue and the Pakistan Youth Hostel Association, which were instrumental for the successful tour.
While Amin Hashwani, President India-Pakistan CEOs Business Forum, chaired the conference; those who addressed the conference included Dr. Shreekant Gupta from Delhi School of Economics India, Dr Asad Saeed from CSSR Karachi and Dr. Kaiser Bengali from SZABIST.
Hemanshu Kumar thanked the Pakistani nation for the warm hospitality extended to the delegation. He introduced Delhi School of Economics to the conference participants. DSE, India was conceived in 1948 as a centre for higher learning and research in the social sciences. It has grown through the years to become the premier institute in India for advanced study and research in economics. The Delhi School of Economics building was inaugurated on January 18, 1956 by the then Prime Minister Pandit Jawaharlal Nehru, who was also the first President of the Delhi School of Economics Society. The School has under its wings, in addition to the Department of Economics, the departments of Sociology and Geography. Dr. Amartya Sen, a former faculty member, was conferred the Nobel Prize in Economics in 1998.
Manmohan Singh, the Prime Minister of India, and Amartya Sen are the honorary professors of the School at present. The school publishes a refereed biannual journal, the Indian Economic Review, which integrates the research of several economists.
Dr. Javaid Laghari, Vice President and Project Director SZABIST, and Azra Maqsood, the Deputy Dirctor SZABIST, welcomed the Indian guests.
Speaking on the occasion, Dr Asad Saeed, who had an opportunity to visit India recently to explore avenues for friendly trade ties, remarked that the trade volume between Pakistan and India does not reflect the actual potential of the two countries. Currently, it is estimated at around $800 million, which was almost half of the amount a couple of years ago.
There is up to worth $2 billion informal trade between Pakistan and India, which includes smuggling and trade through a third country. Both Pakistani and Indian economies were protectionist economies but at present Pakistan is no more a protectionist economy. It is now an open economy. Trading with other countries is good. Both Pakistan and India trade with other countries so why don't they trade with each other. Pakistan imports 40% of the goods which India exports. Potential for trade between the two countries is $5.2 billion so the steps should be taken to capitalize on the opportunity.
There are similar demand profiles and the tastes are also almost similar. India's official position reveals that it has no problems in trading with Pakistan. In 1979, India issued a notice to have trade with Pakistan but Pakistan did not reciprocate. There are informal trade barriers. Visa restrictions, level of distrust, and Hindu & Muslim religious outfits are some of the barriers.
There are some non-tariff barriers such as the requirement of political and security clearance, sampling, customs inspection etc. but the Indians argue that none of them are directed against Pakistan. Trading with Pakistan is a concern in Northern India rather than in the Southern India. There are procedural problems, not policy problems for trade according to the Indian officials. Pakistan's official position says that Pakistan cannot open up trade with India unless Kashmir issue is resolved. Some auto assemblers don't want normalization of trade between Pakistan and India. The biggest market for the Indian tyres is Pakistan. Textile sector of Pakistan wants to have trade with India. France and Germany have had disputes for hundreds of years. If they have resolved their difference, why can't Pakistan and India? According to Dr Asad, businessmen, military and extremist religious parties are responsible for our poor relations with India. Business lobbies should push up for expediting trade between Pakistan and India. Economies synergize when trade increases.
Dr. Shreekant Gupta, senior faculty member Delhi School of Economics India, began his presentation by inviting Pakistani faculty members and students to visit India. He eulogized the efforts put into making the delegation feel at home. His remarked: "We should often visit each other so that the climate of misunderstanding and distrust may not develop. We should synergize in a different way; what can civil societies do? In my view civil societies matter a lot and they play a vital role. In my opinion civil societies comprise media, NGOs, citizens' actions, judiciary, etc".
Dr. Shreekant Gupta gave presentation on two topics. The topic of his first presentation was "The impact of public disclosure of environmental performance on financial performance: evidence from India".
The following points were derived from his presentation.
A growing body of research shows that capital markets react to environmental news and thus create incentives for pollution control. We conducted an event study to examine the impact of green rating of pulp and paper, automobile and chlor alkali firms on their stock prices. Capital markets should react because environmental performance is correlated with overall efficiency, because it may invite greater scrutiny by community, media, judiciary etc. and because it may become a reason for loss of reputation, goodwill, sales etc.
The Centre for Science and Environment (CSE), a leading Indian environmental NGO, evaluates the environmental performance of various industrial sectors. This Green Rating Project (GRP) relies heavily on voluntary disclosure of information by firms. The information for the project is acquired through structured surveys and fieldwork and is reviewed and vetted by technical experts. The uniqueness of GRP is that this is the first time anywhere in the developing world environmental performance rating of industrial firms which is being undertaken by an NGO and that information on the environmental performance of companies is being made available to the public. In an efficient capital market, stock prices on any day fully reflect available information about the present value of the stream of profits that a firm is expected to earn in the future. Provision of new information about environmental performance of a firm may cause abnormal changes in its stock price if the information is expected to affect profitability. This is the basis for application of event study methodology to examine the reaction of capital market to environmental news.
Concluding his presentation Dr. Gupta said that the market generally penalized environmentally unfriendly behaviour. There was further evidence of the important role that capital markets could play in environmental management, particularly in developing countries where environmental monitoring and enforcement are weak. He expressed his gratification by saying that the firms seemed to respond to the ratings.
The second topic of Dr. Shreekant Gupta's presentation was "The South Asian network for development and enviromental economics". The member countries of this network are Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. There are over 1600 members on the list of this network. There are several institutional members, 30 research associates, resource people, advisors across South Asia, and around 250 trained people. Management and advisory committee comprises Partha Dasgupta from Economics Dept, Cambridge, UK, Shanta Devarajan from the World Bank, Karl Goran Maler from Beijer Institute, Sweden, Enamul Haque from East West University, Bangladesh, Rehana Siddiqui from PIDE Pakistan and Jeff Vincent from UCSD USA.
The work of the network is to provide research support, offer training in Environmental Economics and support institutional academic exchanges and peer networking. The network seeks to i-strengthen the ability of researchers in South Asia to undertake research on the economics of environmental and natural resource problems, ii-support the growth of rigorous policy-relevant literature on economic development, poverty and environmental change, iii-support the development of environmental and natural resource economics in teaching/research institutions and iv-facilitate dialogue among economists, other social and natural science thinkers, practitioners, and policy makers on environment and natural resource concerns.
The third speaker was Dr. Kaiser Bengali from SZABIST. The topic of his presentation was "Why is dealing with inequality important?" His remarks are as follows.
Both Pakistan and India need to address the issue of inequality. Poverty cannot be alleviated by simply having high economic growth. There is high economic growth in India but millions are living below the poverty line. There are people who are able to wear shoes and there are hundreds if not thousands who cannot afford a pair of shoes. By inequality we are sowing the seeds of conflict. There should be a balanced society because a balanced society gives a balanced economy.