RECONSTRUCTION OPPORTUNITY ZONES
TARIQ AHMED SAEEDI (email@example.com)
May 11 - 17, 2009
For coming days and years, Pakistan and Afghanistan will remain duo important place on earth to which interests of energy seeking leading economies attach tightly because of Pak-Afghan geographical strategic location that provides terrestrial transit to natural resources-rich Central Asian Republics on one side and sea route to reclusive African and Sub-Saharan markets on the other. At least, it is reflected in the exuberant march of world in helping the two in steering out of social and economic woes through enchanting financial grants or non-monetary sustenance.
In a recent news report, Dr. Babar Awan, Minister for Parliamentary Affairs claimed that Pakistan would receive $20 billion as aids from friendly countries. Over $5bn has already been pledged in Japan-hosted conference. There are many other country specific relevancies of long border sharing neighbourhoods, yet in any of the assumptions, distinctive geography predominates. Now, when US President Barak Obama sees Pakistan holds fragile governance system due also to economic weaknesses....he must come forward to help Pakistan cure its malaise and shore up strategic partnership with one of the world biggest economies and expedite materialization of claims of support beyond security and military parameters. Government of Pakistan has expressed repeatedly that it lost economic activities worth $35 billion because of militancy and insurgency that were fanned owing to War on Terrorism.
Many industrial analysts in Pakistan welcomed reappearing news stories about US preferential trade programmes in far-flung Pakistan's border regions and Afghanistan as good sign for economic building. Reconstruction Opportunity Zones (ROZs) programmes will make Pakistani exports more price competitive by permitting goods duty-free entry to US market. Former US president Bush in his visit to Pakistan in March 2006 said in a press conference that (former) Pakistani President Pervaiz Musharraf's vision of ROZ would encourage vital economic development. Until now, ROZ legislation is pending in US congress for final approval. This remains a farsighted idea to develop trade zones in which manufactured products will have duty free access in market of United States of America.
US Trade Representative Ron Kirk reportedly said that there were requirements of certain structural changes such as in Pakistan and Afghanistan Transit Trade Agreement prior to implementing ROZ programme. Has this not taken enough time? There is no approval from US congress even after three years. What we are seeing is fast materialization of ideas of mowing down militants and terrorists instead of wiping out causes that both previous and incumbent governments in US realized was possible through economic vitality and prosperity and better education.
ROZ programme proposal envisaged some designated areas in Pakistan that includes FATA, NWFP, Azad Jammu and Kashmir, and 100 miles of Balochistan province measured from Pak-Afghan border, and all areas of Afghanistan. From these areas, manufactured goods will enter in US market duty-free. However, three product categories have preferential entitlements e.g. 4,910 non-textile goods from Pakistan, 3,474 non-textile goods from Pakistan, and textile products and apparel subject to application of rules. According to the programme, all GSP and GSP plus products will remain duty free for 15 years until 2023 irrespective of whether GSP is extended or not. In zones, there will be no restrictions over destinations of importing raw materials.
Singed in 2003, US-Pak Trade & Investment Agreement has failed to take off yet. Identical US preferential trade programmes developed for Israel, Jordan, and Egypt have been very successful in economic growth. In fact, in Jordan, that is a male-dominant country and where female workers have small proportion in overall employment, an unusual social change appeared following the functioning of Quality Industrial Zones. Not only representation of female workers increased but also zones' women labours happened to be breadwinners of their households. In addition, QIZ programmes proved more advantageous than free trade agreements for both Jordan and Egypt as FTA did not eliminate tariffs completely whereas QIZ did. US had withdrawn FTA with Egypt. Seventy five percent of Jordanian goods (mainly textile and apparel) enter US market under QIZ programme. Indeed, apparel industry dominates 99.9% of total QIZ exports. In 1996, US congress authorized QIZ programmes under which goods were jointly to be produced by Israel and Jordan or Egypt. Material and processing were stipulated to be owned 20% in Israel, Jordan and Egypt; 15% in either US, Israel, Gaza Strip/West Bank; and 65% in anywhere in the world.
ROZ will become an opportunity for realigning and strengthening Pak-Afghan and Pak-US trade relations. It will create job opportunities for people. It has also been widely accepted that without changing demographic and psychographic conditions it would be near impossible to make use of geography two countries stood on. Social changes are to be brought in to the mindset of people living in the vicinity and made them swear off perennial xenophobia that was historically developed and that made them inadaptable to foreign interventions. Forced changes will be more preposterous than long lasting. Only making the people realized the economic vitality and prosperity because of these interferences will produce desirable results. Genuinely, economic assistances should be ensured to be transferable to the ground level. Mainly besieged with multiple warlords Afghanistan teeters along the line of economic disintegration directing its major population towards neighbouring country to earn livelihoods through cross-border trade. Tribal culture imbibed in them doctrine which is sometimes contradictory to the statutory orders of the state. Sharing the border or having geographical proximity remote upcountry areas of Pakistan have smack of it. Problem is not because of eccentricity of particular community's life style, but it is when this set of values put up shields against dynamics that suggest public welfare and development.