report
Another attack on rights

Human rights violations in the past, including acts of torture and extrajudicial killings, remained unpunished during 2010-2011
By Waqar Gillani
Zarteef Afridi is no more — a human rights activist in the tribal belt along the Pak-Afghan border was shot dead last week by some extremist groups allegedly. He had been receiving threats from the extremists for the past many months. 


A step towards energy efficiency

The goal is to save over 45 MW of installed capacity and the associated annual operational costs for 115.5 GWh over the coming years
By Jazib Zahir
Haji Shad Muhammad is a 49-year old who owns 60 acres of land in Peshawar. His dream of providing quality education to his children rests on his ability to extract copious quantities of crops from this finite resource. Such a dream can only be realised if he is able to pump out enough irrigation water from below the surface of the earth to satiate the crops. But the water table in the area has steadily receded till it is over 300 feet beneath the surface. The pump Shad uses as part of his tubewell setup has continued to guzzle expensive electricity yet its output has tapered off. 


interest
An unhealthy trend

Unusual banking spread is one of the reasons of the stalled industrial and business growth in the country
By Tahir Ali
The huge banking/rate spread — the difference between the average rates of returns on deposits and the average rate of interest on loans — in the country may have helped increase the incomes of banks but it surely is one of the biggest reasons of the stalled industrial/business growth and below capacity production in industries that result in increased joblessness. It also leads to less saving, less investment and unjust income distribution.


Tackling traffic
Developing countries have started seriously dealing with traffic jams, will Pakistan follow?
By Alauddin Masood
After an interlude stretching over a little less than two decades, a bus service in the public sector has been launched in the provincial metropolis of Lahore for providing, as stated by Chief Minister Shahbaz Sharif, comfortable and affordable transport facilities to the people. 


commerce

Trade agreements, a result card

Pakistan has to cover a lot of ground on the road to bilateral trade competitiveness
By Hussain H. Zaidi
Bilateral and regional trade agreements — collectively called preferential trading arrangements (PTAs) — are arguably the most remarkable characteristic of international trade. Between 1950 and 1990, about 70 PTAs were in force. By 2010, the number had increased to 300. With the exception of Mongolia, all members of the World Trade Organisation (WTO) are a signatory to at least one bilateral or regional trading arrangement. 


realisation

Better late than never

This 16 December we are as absorbed in talk about conspiracies against our holy land as we were forty years ago when Bangladesh came into being
By Aasim Sajjad Akhtar
I am writing this column on 16 December, forty years to the day since the surrender of Pakistani forces in Dhaka and the formal christening of the state of Bangladesh. It is striking that there has been virtually no discussion this year — let alone organised events — on what Pakistanis like to call ‘Suqoot-e-Dhaka’. Presumably, this is because we are preoccupied with other more important concerns, such as Memogate and the president’s (temporary) sojourn in Dubai. Whatever the reasons, the silence of our intelligentsia and political elite on what has to be one of the most significant events of the post WWII period is deafening.


Together for a cause
We need to harness social capital for a people’s centric development and governance of development
By Shahzada Irfan Ahmed
The capital city of Islamabad was beaming with activity last week as it was house to multiple conferences attended by delegates in a large number. To name a few, they were the envoys’ moot, Pakistan Institute of Development Economics (PIDE) conference and the Sustainable Development Policy Institute’s (SPDI’s) annual event called Sustainable Development Conference. 

   


  

 

report
Another attack on rights
Human rights violations in the past, including acts of torture and extrajudicial killings, remained unpunished during 2010-2011
By Waqar Gillani

Zarteef Afridi is no more — a human rights activist in the tribal belt along the Pak-Afghan border was shot dead last week by some extremist groups allegedly. He had been receiving threats from the extremists for the past many months.

Zarteef had at least 20 years of experience of working with Human Rights Commission of Pakistan (HRCP) in Khyber Agency. A tireless human rights defender, Zarteef dedicated his life to promoting human rights, tolerance and peace in a region beset with conflict.

Repeated threats to his life had failed to deter him from his work. Zarteef, survived by four daughters and two sons, was well known because of his tremendous efforts for education, peace and women rights. He was instrumental in organising a local jirga this year where he urged the elders to struggle against extremists.

He was one of the very few people in the area who went with their whole family, including women, to cast vote in the general elections, an area where women rights are denied.

A few months ago, he had managed to arrange as many as three million rupees in Peshawar for the education of displaced children of Khyber Agency who were living in refugee camps in Peshawar. Zarteef is one of the latest sad incidents where human rights defenders have been targeted.

The annual observatory report (2011) for the protection of human rights defenders titled, “Steadfast in Protest” jointly compiled by International Federation for Human Rights (FIDH) and World Organisation Against Torture (OMCT), reveals that the interferences and attempts to criminalise and repress human rights defenders in many parts of the world were one of the most prominent features of attempt to control civil society.

“The interference into the right to peaceful assembly in different regions of the world remained a particularly serious challenge throughout the year,” the report summery reads. The “control” approach manifests itself in the legal framework and judicial practice in all regions of the world covered by this report.

In 2011, human rights defenders were killed, subjected to assaults and threats. Such killings and assaults were not limited to a particular continent or region. HRCP launched this report in Pakistan, highlighting the problems faced by human rights defenders, especially in Pakistan. In Pakistan, the province of Balochistan and northern tribal area are the biggest security risk for activists and journalists

Throughout 2010 and the beginning of 2011, the government failed to provide a safe and enabling environment for human rights activists, who continued to be victims of killings and abductions, in particular, in areas that fall outside of its effective control, such as the provinces of Balochistan and Khyber Pakhtunkhwa.

Perpetrators of violations against human rights defenders were rarely brought to justice, and impunity remained widespread throughout the country. Extra judicial killings and enforced disappearances remained rampant, particularly in Balochistan, creating an extremely high-risk environment for human rights activists.

The judicial process in both the Supreme Court and high courts is unnecessarily lengthy, contributing to a feeling of impunity. A high number of cases of enforced disappearances remained unresolved. Torture remained widespread this year, with security forces and other law enforcement agencies enjoying almost complete lack of accountability. Acts of torture committed in military custody or in detention centres run by the intelligence services were also endemic. Conditions of detention remained poor in all parts of the country.

Members of religious minorities remained particularly vulnerable. In particular, members of the Ahmadiyah religious minority faced threats, discrimination and violent attacks, as illustrated by the attack of two Ahmadi mosques on May 28, 2010, killing at least 70 members of the community. The Shia community was also victim of targeted killings, particularly in Balochistan.

In January and March 2011 respectively, the governor of the Punjab province and the Federal Minister for Minority Affairs were assassinated for opposing the blasphemy law. The UN High Commissioner for Human Rights noted that these high-profile killings were “symptomatic of pervasive violence against religious minorities in Pakistan and a lack of protection for their places of worship”.

Freedom of expression remained under attack by both government and non-state actors. Reportedly, 20 journalists and media workers were killed in 2010, making Pakistan one of the deadliest countries for journalists in the world. Widespread impunity surrounded the killing of journalists and other media workers, as reportedly not a single conviction was obtained during 2010 for killings of journalists.

Human rights activists also continued facing threats and attacks from non-state actors in Balochistan and the Khyber Pakhtunkhwa (KP) province. NGOs working in the health and education sectors, or those seeking to promote human rights, were often branded as “promoting obscenity” or “undermining Islam”. In addition, international organisations were required to seek “No Objection Certificates” (NoC) from the government, which hampered their freedom of movement outside Quetta in Balochistan, as well as in parts of the Federally Administered Tribal Areas (FATA).

Incidents of targeted killing and abduction for ransom forced international humanitarian NGOs to curtail their activities in Balochistan and the KP province as several of them closed down their offices or reduced fieldwork to prevent harm to their staff. On February 18, 2010, unidentified armed men abducted four employees of the international humanitarian NGO Mercy Corps in the Shankai area of Qilla Saifullah district, Balochistan, on their way to the main regional office of Mercy Corps in Pakistan. The abducted team members were working with local district health officials in Balochistan to implement health programmes.

HRCP Secretary General, I A Rehman, demands a certain mechanism of security for activists and journalists working on human rights issues, especially in the conflict-hit areas. “At least 40 percent journalists have left FATA because of security risk,” he says, adding, “There is no liberty and security in the country.” In 2011, till now, 16 journalists have been killed and many human rights defenders have ‘disappeared’.

Inadequate public security and lack of a conducive environment for human rights defenders continued to significantly impact the work of activists throughout the region (Afghanistan, India, Pakistan, Nepal, Sri Lanka, and Thailand).

Past and present human rights violations, including acts of torture, ill-treatment and extrajudicial killings, remained unpunished during 2010-2011, while public confidence and trust in the judiciary continued to erode in most Asian countries throughout the reporting period (Cambodia, Iran, Malaysia, Viet Nam).

“It is time to establish enabling domestic legal frameworks for human rights defenders, to undertake a systematic overhaul and repeal of legislation that unduly limits civil society and human rights defenders and, importantly, guarantee accountability for assaults on human rights defenders. More than that, however, it is vital to strengthen public repudiation of attacks on human rights defenders and move human rights defenders back into the centre of society,” the report says.

 

vaqargillani@gmail.com

 

A step towards energy efficiency
The goal is to save over 45 MW of installed capacity and the associated annual operational costs for 115.5 GWh over the coming years
By Jazib Zahir

Haji Shad Muhammad is a 49-year old who owns 60 acres of land in Peshawar. His dream of providing quality education to his children rests on his ability to extract copious quantities of crops from this finite resource. Such a dream can only be realised if he is able to pump out enough irrigation water from below the surface of the earth to satiate the crops. But the water table in the area has steadily receded till it is over 300 feet beneath the surface. The pump Shad uses as part of his tubewell setup has continued to guzzle expensive electricity yet its output has tapered off.

Shad was contacted by two field agents who conducted a rigorous audit of his pump and reported that the efficiency of the device was a pathetic 39.9 percent. Under the guidance of these agents, Shad was supplied with a higher performance motor pump set, starter panel and capacitor. The efficiency of the system surged to 55.5 percent and wheat, cotton and sugar-cane blossomed on the land. Shad has seen his annual income increase by Rs84,000.

Shad is not the only one experiencing a fairy-tale ending. There are over 1,550 such success stories across Pakistan with many more to come. Credit for this transformation goes to the Tubewell Efficiency Improvement Program (TWEIP) funded by USAID. It is one of six initiatives announced by American Secretary of State Hillary Clinton in October 2009 to mitigate Pakistan’s gaping power shortage that is rapidly exceeding 5,000 MW.

The programme targets the improvement of energy efficiency in the agricultural sector which contributes a fifth of our GDP. Pakistan remains the fourth largest consumer of underground water for irrigation purposes in the world. Any attempt to better manage underground water thus has potentially high impact on the economy.

“When you scrutinise the life cycle of a pump, you realise that your capital expenditure is trivial relative to the operational and maintenance cost which is about 84 percent of the total,” explains Omer Malik who is heading up the project. “Yet, consumers only focus on the capital expenditure when making their purchasing decision, neglecting the savings available by picking an efficient product.”

TWEIP adds value by arranging field visits that result in accurate audits of the performance of existing tubewell infrastructure. It has also forged partnerships with several quality pump providers, including KSB, MAK, Peco, Flo Pak, Victoria, Peco and HMA that are committed to providing state-of-the art pumps that deliver efficiency enhancements of 20 percent or more without compromising on the quantity of water output. TWEIP also facilitates the process of obtaining these expensive pumps.

Under the existing scheme, the consumers pay just 50 percent upon purchase while the remaining amount is covered by TWEIP upon the understanding that the pump supplier will guarantee the agreed upon performance parameters. This subsidy helps to allay the cost of a major capital expenditure which will allow the consumer to reap benefits for many years to come.

TWEIP is in the process of launching a major nationwide advertising campaign under the banner of “Bijli Pani Week”. A special two-episode docu-drama is being telecast on both Sunday 18th and 25th December on major television channels. The protagonist of this drama is the Brand Ambassador Mr. Karmu who will demonstrate the social and economic benefits of such a programme through a powerful narrative.

In addition to the visual media, “Bijli Pani Week” involves the distribution of informational brochures, kiosks, wall paintings and utility bill advertising. The objective is to reach out to consumers who can benefit from the product but are not aware of it.

It is expected that following this awareness building stage, interested consumers may get in touch with the programme agents by phone. The agents will build a relationship with interested parties and help them navigate through the steps involved in getting their outdated equipment replaced. “The purpose of this campaign is to introduce the concept of energy efficiency and allow people to take ownership of this concept,” explains Samia Mehdi, who is managing Communications and Outreach for the group. “The marketing campaigns have been designed to show rather than tell people how energy savings can be achieved.”

The Tubewell Efficiency Program is described as a demand side energy management programme since it reduces peak energy consumption. It is estimated that the success of the programme to date has saved our nation 10.5 MW of installed power capacity which translates into some $12 million dollars that can be spent on an alternative cause.

But the programme is positioned to result in even more cost savings as its footprint expands. The goal is to save over 45 MW of installed capacity and the associated annual operational costs for 115.5 GWh over the coming years. With feasible alternative energy solutions like solar tubewells still a pipe dream, perhaps this is the infrastructure to invest in today to reap rich dividends tomorrow.

 

   

 

interest
An unhealthy trend
Unusual banking spread is one of the reasons of the stalled industrial and business growth in the country
By Tahir Ali

The huge banking/rate spread — the difference between the average rates of returns on deposits and the average rate of interest on loans — in the country may have helped increase the incomes of banks but it surely is one of the biggest reasons of the stalled industrial/business growth and below capacity production in industries that result in increased joblessness. It also leads to less saving, less investment and unjust income distribution.

Despite enhanced net income — after tax income of banks which was minus Rs2.8bn in 2000 rose to Rs54.5bn by 2009 — banks are reluctant to increase the rates of return on deposits as high rate spread is also one of the main tools of profitability for banks.

According to a bank manager at the national bank, who wished not to be named, the average deposit rate is 5 percent against 15 percent average rate of interest in the country.

While the average rate spread is around 3-5 percent in most countries, it is much higher in Pakistan. According to the SBP data, it was 4.63 per cent in June 2003 but increased to 8.90 percent in July, 2011, which means that the lending rate is greater by that extent from the rate of deposits.

If high rate-spread indicates lack of efficiency and competitiveness in the banking system on the one hand, it also signifies the failure of regulatory authority — the State bank of Pakistan.

The SBP, which is authorised under the SBP Act, the Banking Companies Ordinance and some other laws to make sure that banks do not exploit the depositors or the borrowers and earn profits through legitimate business practices, needs to review the existing rate spread and bring it down to a normal range.

Successive SBP governors, including Dr Muhammad Yaqoob and Shamshad Akhtar, while acknowledging that depositors were getting negative returns, had also urged large banks to increase the return on deposits or the State Bank would intervene to get results.

According to one estimate, interest rate in Pakistan is highest in the region. With business and industries already hit hard by terrorism and energy shortage, lending rates need to be brought down to a single digit to save them from bankruptcy, encourage private loans demand and spur economic growth in the country.

But if the banks reduce the rate of interest on loans but simultaneously cut down the deposit rates as well or increase both the rates of interests and rates of return on deposits by the same amount, the spread rate will practically remain high. So, any effort to slash the spread not only requires cutting down the lending rate but also increasing rates on deposits.

Despite inflation of around three percent, the United States decreased interest rates to almost zero percent and the European Union to just above one percent to push growth and create jobs.

High rate of interest, the main factor for huge rate spread on the back of small returns on deposits, is one of the main reasons for the rising loan defaults, below capacity working of industries, job cuts and surging non-performing loans calculated at Rs630bn in September 2011.

The high cost of funds is not only leading to industrial closures and defaults, the government, taking huge loans from commercial banks, is also drastically affected by the trend and is compelled to slash development funds, increasingly rely on borrowing and printing of new currency to meet its fiscal needs.

The difference in the interest rate being paid by the government for the domestic and external loans will illustrate the point. At the current rate of interest (14-15 percent), the government’s debt servicing costs stand at $10bn on domestic loans of$80bn. Conversely, it has to spend only around $2bn on external loans of $61bn given at an average rate of three per cent.

It is worth asking that when some local entrepreneurs in Mardan could offer as much as 50 percent net profit per annum through their investment schemes, why banks can’t increase the amount of profit on deposits for the depositors, the lifeline of the banking system in any society?

“One thought that privatisation of banks would entail better services at reduced cost for most of the customers, but it has, conversely, made banking costlier, exploitative and anti-poor,” argues a lecturer of economics, wishing anonymity.

“Commercial banks are earning huge sums of money due to high interest rate on the one hand and giving less profit on deposits on the other. Why would people go for depositing their money in banks when they could reap comparatively higher returns on their savings by spending them in real assets like investment in real estates, transport and other businesses?,” he asks.

While the banks have reduced rate of returns and increased lending rates to augment their financial gains, the poor consumers have been the real losers. High rate of inflation of over 15 percent per year for the last several years has aggravated the problem.

Depositors receive negative returns on savings when the rate of return on savings is less than the rate of inflation. For example, if consumers are given 5 percent of returns on their savings and inflation rate is 15 percent, savers will annually lose 10 percent of the purchasing power of their bank deposits.0

Commercial banks, both public and private, are believed to have deprived the depositors of around Rs1100 billion profit during the last 10 years by only avoiding the inflation rate formula of 2001 applied to fix the profit rate, says a report.

The absence of a genuine investment opportunities or ignorance thereof on part of the people notwithstanding, people have but to keep their savings in these less attractive bank accounts.

Quite a few people in the country, under the urge to avoid Riba (fixed return on savings) keep their savings in current accounts with no interests thereon. But banks are free to use their amounts any way they want and even earn money over these amounts by lending it to others.

According to a news report, bank deposits increased by 269 percent from 2001 to 2010, bank assets by 268 percent whereas growth in pre-tax profit has been 9,991 percent. He said banks earned Rs1.1 billion in 2001 which rose to Rs111bn in 2010 but the real average rate of return (minus rate of inflation) which was 3 per cent positive in 2001 came down to minus 6.5 percent in 2010.

Apparently, depositors are deprived of their due profit share because of the policy of writing off loans to the influential.

Banks, apparently, are more interested in interest profit than affording genuine and high rewarding investment chances to their consumers. And why would the banks increase the deposit rates and decrease interest on loans in the backdrop of excessive government borrowing which could help it overcome the low demand from the private sector.

“Loan defaults, frequent withdrawal by the deposit holders from their accounts, less fixed deposits, concessional loans, high rate of inflation and incessant devaluation of currency etc hinder banks from decreasing the spread,” says the manager.

Low-cost loans are opposed for reasons that they trigger inflation that’s why the SBP followed a tight monetary policy that kept the policy rate high. But the question is did this policy succeed? Could inflation be controlled and economy improved?

 

Tackling traffic
Developing countries have started seriously dealing with traffic jams, will Pakistan follow?
By Alauddin Masood

After an interlude stretching over a little less than two decades, a bus service in the public sector has been launched in the provincial metropolis of Lahore for providing, as stated by Chief Minister Shahbaz Sharif, comfortable and affordable transport facilities to the people.

Modern CNG buses have been imported from a leading Chinese company for this project. The provincial government of Punjab has also entered into an agreement with another company for importing 575 new buses. Besides Lahore, these buses would be used for providing transport facilities in other big cities of the province. In addition to new buses, some 300 old buses are being refurbished and about 75 refurbished vehicles would start plying, on various routes, in Lahore by the end of the current month, reports say.

Introduction of efficient, comfortable, affordable and dependable mass transit infrastructure in major urban centres can minimise the difficulties and risks faced by road users. A simple example can illustrate how good mass transit systems can eliminate traffic chaos. Let us say a minor traffic jam in the morning consists of 60 cars at a signal and each car has on average two people in it, so there are a total of 120 people traveling in 60 cars. On the other hand, three large buses can accommodate about 120 people on seats alone and take up a maximum area of only 18 cars. This means that the same road which shrinks in the presence of 60 cars can be more than enough even if these 120 people travel on three or four different buses.

Despite being a capital territory and a newly-built city, even Islamabad lacks proper public transport system. Non-availability of efficient and dependable public transport compels the people to use private vehicles. As a result, the number of cars has been growing in the country, which is neither good for the environment nor recommendable in terms of financial expenditures and heavy drain on the country’s precious foreign exchange resources.

To minimise traffic hazards, the developed countries focus on building and developing mass transit systems and adopting policies that discourage people to bring their cars on roads during peak traffic hours. Even many developing countries have successfully followed the more advanced countries of the world to solve the problems of traffic jams and environment degradation.

One may quote here the example of Brazil and Colombia, which have turned their two main cities into model cities for effective public transportation. The success of these cities in overcoming traffic jams and making road journey safer and easier is now being copied by many other developing countries.

For instance, till the end of the 20th century, the traffic situation in Bogota (Colombia) was not different from the one obtaining in Pakistan. However, when Enrique Peñalosa became mayor of Bogotá in 1998, he asked a question that is changing the way the global community now thinks about cities: “In Bogotá, where 85 percent of the people do not use cars for their daily transport, is it fair that cars occupy most of the space on the streets?”

The answers he came up with have reshaped Bogotá, home to seven million people, into a city so easy to negotiate by public transportation that people actually voted in favour of outlawing cars in the city, during rush hour, by 2015. In just a few short years, the metropolis has become a success story that enlightened city fathers around the world are now aiming to copy.

For decades Bogotá was inundated by urban problems typical of a major city in a developing country. Pollution from cars and buses shrouded the city, much of it trapped by the surrounding mountains. The city’s population boomed — more than 140,000 people move to Bogotá each year. About half of them immigrated from the countryside, many displaced by Colombia’s civil strife. Rampant crime and corruption had hampered past reform efforts. Rising incomes led to more cars (about 70,000 new cars hit the roads in Bogota every year) and more gridlock.

After taking office, Peñalosa implemented a number of measures designed to make living in the city easier. He built schools, paved roads, ran sewers to poor neighbourhoods, repaired parks, and instituted policies to restrict automobiles. At first, he was almost impeached for getting cars off sidewalks. But Peñalosa pressed ahead with his transportation reforms.

And as the city became easier to navigate, support for his efforts grew. The city built 70 miles of bicycle routes and prohibited entry of cars in several streets, converting them into pedestrian malls. More drastically, the city began to restrict car use during rush hours, banning each car in the city from the downtown area two days a week, based on the license plate number. The results were dramatic: the average commute time dropped by 21 minutes, and pollution reduced significantly.

And then came the TransMilenio. The city had been debating a multi-billion dollar subway system for decades. But, Peñalosa decided to copy the significantly cheaper r apid transit bus system that had turned Curitiba (Brazil) into a model city for effective public transportation. With an initial expenditure of $350 million, 38 kilometer TransMilenio system was up and running in less than two years. The buses, running in separate lanes down the center of the city’s main arteries, are able to carry 780,000 people a day at an average speed of 26 kilometers per hour — considerably outpacing cars and private buses. Estimates have found that the system saves people an average of 300 hours of commuting time annually.

Unlike expensive subways or elevated trains, the TransMilenio runs at a profit. And the city plans to add a number of new lines to the system by 2015, so that 85 percent of residents live within 500 meters of a bus station.

Now, it is not only easier to travel around Bogotá, Peñalosa’s reforms have helped make the city considerably safer. Since 1998, crime rates have also dropped dramatically.

Since the growth of population in cities has outpaced all attempts to provide for roads, mass transit and other forms of public transport, the transformation in Bogotá is providing important cues for other cities around the world. There are about 300 cities in the developing world with populations of more than a million. These cities are not only saddled with the problem of how to move their people around, but also how to reduce transport generated air pollution.

Peñalosa could succeed in Bogotá by focusing on improving the lot of people, not their cars. But a majority of the mega cities in the developing world, including Pakistan, continue to face the problem because their resources are being used to help the affluent avoid traffic jams rather than mobilizing the entire population and help people save hundreds of commuting hours annually and the country’s precious foreign exchange, which is being spent on the import of petrol and diesel.

 

The writer is a freelance columnist based at Islamabad.

alauddinmasood@gmail.com

 

commerce
Trade agreements, a result card
Pakistan has to cover a lot of ground on the road to bilateral trade competitiveness
By Hussain H. Zaidi

Bilateral and regional trade agreements — collectively called preferential trading arrangements (PTAs) — are arguably the most remarkable characteristic of international trade. Between 1950 and 1990, about 70 PTAs were in force. By 2010, the number had increased to 300. With the exception of Mongolia, all members of the World Trade Organisation (WTO) are a signatory to at least one bilateral or regional trading arrangement.

At present, Pakistan is a member of quite a few PTAs both regional and bilateral. The regional PTAs of Pakistan are the South Asian Free Trade Agreement (Safta) and ECO Trade Agreement (Ecota). The bilateral PTAs of Pakistan include FTAs with China, Malaysia, and Sri Lanka and preferential trade agreements with Iran and Mauritius.

In addition to Pakistan, Safta consists of India, Sri Lanka, Bangladesh, the Maldives, Nepal, Bhutan and Afghanistan. The agreement, which came into force on January 1, 2006 provides that members will reduce their tariffs between 0 and 5 percent by December 31, 2015 on all traded goods except those placed in their sensitive lists.

The products placed on the sensitive list are exempted from tariff reduction. Safta is yet to come of age as intra-Saarc trade accounts for less than 5 percent of the global trade of the eight member countries. In 2011, Pakistan’s total trade with Safta countries was $3.49 billion, including exports of $1.61 billion and imports of $1.88 billion, which accounts for merely 5.36 percent of Pakistan’s global trade.

The major reason for low intra-Safta trade is the low volume of trade between Pakistan and India, the largest economies and trading nations in the region. Though formal Pak-India trade (the two countries have informal trade of more than $3 billion a year) has increased from $236 million in 2001-2002 to $2 billion in 2010-11, it still constitutes less than 1 percent of the global trade of the two countries.

India maintains high tariffs and non-tariff barriers on products of export interest to Pakistan. More than any other factor, the volatile character of Pak-India political relations makes one skeptical about the success of Safta. The recent decision of Pakistan to grant MFN status to India is a welcome move and if implemented may prove instrumental in pushing up the bilateral and intra Saarc trade.

Ecota was signed in 2003 by five out of 10 countries of the ECO region namely Pakistan, Iran, Turkey, Afghanistan and Tajikistan. It provides that members shall bring down tariffs on nearly 80 percent of traded goods in eight years. However, tariff preferences under Ecota have yet to take effect even after passage of eight years.

Intra-ECO trade accounts for only 7 percent of the total trade of the members. In 2011, Pakistan’s total trade with ECO countries was $4.42 billion, including exports of $3.43 billion and imports of 0.992 billion, which accounts for only 6.78 percent of Pakistan’s global trade. Besides, only two countries i.e., Iran and Afghanistan account for 83 percent of Pakistan’s total trade with ECO countries.

On bilateral level, Pakistan has inked FTAs with China (operational since July 1, 2007 building on an Early Harvest Programme (EHP) of January 2006), Sri Lanka (operational since June 2005), and Malaysia (operational since January 2008). Pakistan has also PTAs with Iran (operational since September 2006), and Mauritius (operational since November 2007).

In the wake of EHP/FTA with China, Pakistan’s exports have more than quadrupled from $354 million in 2004-05 to $ 1.63 billion in 2010-11. During the same period, Pakistan’s imports from China have more than tripled from $1.84 billion to $ 5.78 billion. The total Pak-China bilateral trade has reached $7.42 billion, which constitutes 11.4 percent of Pakistan’s global trade.

In the wake of FTA with Sri Lanka, Pakistan’s exports have more than doubled from $156 million in 2004-05 to $332 million in 2010-11. During the same period, Pakistan’s imports from Sri Lanka have increased from $45 million to $57 million by 27 percent. The total Pak-Sri Lanka bilateral trade has reached $389 million, which constitutes only 0.6 percent of Pakistan’s global trade.

Pakistan’s exports to Malaysia have gone up from $124.4 million in 2008-09 to $165.7 million in 2010-11 by 33 percent. During the same period, Pakistan’s imports from Malaysia have increased from $1.6 billion to $2.5 billion by 56 per cent. The total Pak-Malaysia bilateral trade has reached $389 million, which constitutes 4 percent of Pakistan’s global trade.

Pak-Iran PTA has been marginally instrumental in pushing up Pakistan’s exports from $147 million in 2004-05 to US$ 162 million in 2010-11 by 10 percent. However, during the same period, Pakistan’s imports from Iran have increased from $ 242 million to $ 572 million by 136 percent. The total Pak-Iran bilateral trade has reached $734.3 million, which constitutes only 1 percent of Pakistan’s global trade.

In the wake of PTA with Mauritius, Pakistan’s exports have gone down from $42.5 million in 2007-08 to $ 35 million in 2010-11 by 17 percent. During the same period, Pakistan’s imports from Mauritius have increased from $ 0.4 million to $3.7 million. The total Pak-Mauritius bilateral trade has reached $38.6 million, which constitutes only 0.06 per cent of Pakistan’s global trade.

Thus, though on the whole Pakistan’s bilateral PTAs have contributed to increase in exports, imports have also gone up and in case of Malaysia and Iran by a much higher margin. Besides, the cumulative share of Pakistan’s PTA partners in the country’s trade is only 29 percent, which means more than two-thirds of Pakistan’s trade is still conducted on MFN basis, i.e. with countries with which it does not have a bilateral or regional trading arrangement.

One may, therefore, draw the conclusion that PTAs have not benefited Pakistan either because RTAs (Safta and ECO), of which Pakistan is a member, are not vibrant or because of supply-side constraints, exporters have not been able to make ample use of the enhanced market access.

This underscores that preferential or even duty free market access cannot be of much use in driving up exports significantly unless the supply-side situation is improved. Pakistan has to broaden and upgrade its industrial base, which means moving up the value chain from low technology and low value added products as well as pushing up its overall competitiveness. It may be mentioned that Pakistan occupies a low ranking on the Global Competitiveness Index: 118 out of 142 countries, which means the country has to cover a lot of ground on the road to competitiveness.

 

hussainhzaidi@gmail.com

 

   

realisation
Better late than never
This 16 December we are as absorbed in talk about conspiracies against our holy land as we were forty years ago when Bangladesh came into being
By Aasim Sajjad Akhtar

I am writing this column on 16 December, forty years to the day since the surrender of Pakistani forces in Dhaka and the formal christening of the state of Bangladesh. It is striking that there has been virtually no discussion this year — let alone organised events — on what Pakistanis like to call ‘Suqoot-e-Dhaka’. Presumably, this is because we are preoccupied with other more important concerns, such as Memogate and the president’s (temporary) sojourn in Dubai. Whatever the reasons, the silence of our intelligentsia and political elite on what has to be one of the most significant events of the post WWII period is deafening.

In contrast, preparations for the fortieth anniversary of independence have been ongoing for some months in Bangladesh. It is true that all the people of the Indian subcontinent waged a struggle for freedom from British rule, and, in this sense alone, 1947 represents the culmination of the anti-colonial movement. But whether we like it or not, Bangladeshis will always look on the period between 1947 and 1971 as one of gestation before they achieved their final national liberation. For them, Pakistan was exposed as a lie very soon after the British departure, a new colonialism which was in many ways more insidious than the Raj.

What was experienced by those who lived in what we called east Pakistan is now no longer subject to serious dispute, at least as far as serious historians are concerned. There has been some debate in recent times about the accuracy of accounts of Pakistani army atrocities during the nine month civil war, and the reciprocal violence of the local population against non-Bengalis. It is important to reach a consensus on these brutal facts for the sake of posterity. But I am wary of those amongst us in Pakistan making a meal of the ‘misrepresentation’ of facts vis a vis 1971 — for 24 years prior to the eventual secession of the eastern wing, Bengalis were subject to systematic discrimination and occasional violence. While the violence against non-Bengalis in period March-December 1971 must be acknowledged, the far greater violence (structural and physical) perpetrated by the Pakistani state is the most important fact of all.

And this is why 16 December should be such an important day to us, at least as important as all the other days on which we pat ourselves on the back for being proud and independent country. To designate this day as the ‘Suqoot-e-Dhaka’ is an exercise in denial; what we should be doing is trying to understand, and teach our children, why it is that Pakistan is the only example in history of a majority (53 percent) seceding from a minority (47 percent).

It is, indeed, staggering that so few of us Pakistanis know very much about what happened in 1971 or about the relationship between Karachi/Islamabad and Dhaka in the 24 years between 1947 and 1971. We have satisfied ourselves with a series of caricatures and a plethora of selective evidence. Perhaps most damningly, many (then west) Pakistanis had very little exposure to the Bengali way of life, and, therefore, were content in the knowledge that the stereotypes peddled by the official propaganda machine were an appropriate reflection of Bengali society.

The parallels with the contemporary estrangement of the Baloch people are remarkable. A large majority of Pakistanis have never been to Balochistan and have very little grasp of what constitutes daily life for an ordinary person in that province. Indeed, many of us still do not realise that the term Balochi is used to refer to the culture and language of the Baloch people — that is, it is not correct to speak of Balochi people. Additionally, Baloch society is widely believed to be tribal, which is only partially true, and increasingly less so with urbanisation and the emergence of an educated and quite assertive middle-class. Perhaps the most unfortunate similarity in the way we perceive the Baloch and how we used to perceive the Bengali people is the association of both movements for autonomy/rights with India.

If there is one thing that we have been taught about 1971, and which remains our abiding memory of the secession of east Pakistan, it is that India fomented the ‘break-up’ of Pakistan. I must emphasise again how our official narrative of mourning and grief is so different from the narrative of national liberation proferred by Bangladeshis. The latter will acknowledge that India had a role in bringing the war to an end, but it is sheer madness to claim or even imply that those who fought against the Pakistani army in that war were all Indian agents or worse to ignore that more than two decades of neglect and outright exploitation preceded the very decision to take on the Pakistani state.

The same perverse thinking afflicts us when it comes to Balochistan. Presumably, the only explanation for the insurgency that rages across many parts of the province is India’s depraved desire to dismember Pakistan. There is no question that the Baloch people — or at least a segment of Baloch society — is genuinely aggrieved by the action of the Pakistani state, and military in particular. Indeed, it is easy to make India the bogeyman because this means that we are not forced to think about the alienation of our very own people from the state that is supposed to represent them.

What really troubles me, however, is the suspicion with which ordinary Baloch — like Bengalis before them — are viewed in the heartlands of Pakistan. It seems to me that racist attitudes run quite deep in our society, and that some of the polemic that was employed by the colonial state has been internalised quite deeply by many within society. So, for example, some Pakistanis clearly believe that they are more loyal, or martial, or even better Muslims, than others. Let us not forget that General Ayub Khan openly declared that Bengalis were prone to being disloyal because their ‘Muslimness’ was suspect, or to put it differently, that they were still under the influence of Hinduism.

This 16 December we are as absorbed in talk about conspiracies against our holy land as we were forty years ago when Bangladesh came into being as an independent state. It would appear, sadly, as if very little has changed. And indeed very little will change until and unless the young people who will shape this country’s future in years to come are exposed to the real facts about 16 December, and the years leading up to that day. We cannot continue to decry history as a conspiracy against an incorruptible Pakistan. We must own up to the reality of what Pakistan is if we are to make Pakistan into what it should be.

 

Together for a cause
We need to harness social capital for a people’s centric development and governance of development
By Shahzada Irfan Ahmed

The capital city of Islamabad was beaming with activity last week as it was house to multiple conferences attended by delegates in a large number. To name a few, they were the envoys’ moot, Pakistan Institute of Development Economics (PIDE) conference and the Sustainable Development Policy Institute’s (SPDI’s) annual event called Sustainable Development Conference.

While the first two were meant for comparatively selected audience, the third one invited participants in hordes. The conference agenda was comprehensive and lucrative enough to attract people from different groups and backgrounds. There were intellectuals, development practitioners, communities and policy-makers working in or on South Asian issues, students, academia, legislators, authors and so on.

Titled, “Redefining Paradigms of Sustainable Development in South Asia,” aimed to critically challenge the paradigm of sustainable development. “Even if the paradigm is not dead, it has largely failed to deliver on most counts”, says SDPI Executive Director Dr Abid Qaiyum Suleri. He says the aim of this year’s Sustainable Development Conference (SDC) was to analyse how the celebrated concept of sustainable development could not be implemented in letter and spirit in the areas of environment, human development, economy, eradication of poverty, gender rights, governance, food security, peace and conflict, and energy, etc.

Explaining the point, he says the fast-changing global scenario where Europe and the US are facing recession, China confronting fall in economic growth rate for the first time and inflation taking over, energy crisis worsening and all cherished models of growth failing the need for correcting our direction is the foremost.

Suleri opines the dilemma is that the countries once praised for their sustainable development initiatives are fighting for the survival of the present generation. “How will they plan for the needs of the coming generations is still a question. Nobody is clear what will happen in times to follow,” he adds.

It is very likely that traditional export markets for South Asia go for protectionism and countries start limiting flow of goods coming from there through different measures. Similarly, there is a need to know what programme will the world follow once the 2015 deadline for achieving Millennium Development Goals (MDGs) lapses. There were several similar questions that emerged during the conference.

Suleri shares with TNS that the SDCs aim at finding questions like what worked, what didn’t, what would and so on. This conference also defined next year’s agenda for research for SDPI. Over the years, media has emerged as a research partner as it no longer simply reports proceedings. The media analyses situations and on many an occasion help us locate areas where research is needed.

Another major event of the conference was the Qawali Night. The organizers say they suggested this event for the reason that it historically binds different South Asian communities and the mystic poetry recited their calls of love for the mankind irrespective of the cast, creed and religion.

The 30 sessions held at the conference were equally interesting and it was very difficult for the participants to decide which of the concurrent sessions they are going to attend. A lot of attendants were seen hurrying from one conference room to the other and then returning to the previous one to listen to impressive speakers.

Some of the topics discussed there included: Livelihood Options in Conflict-Affected Situations, Governance Challenge: Is There a Way Out?, Literature in South Asia, Building Bridges through Fact and Fiction, Revisiting Poverty Debate: Alternative Ways for Conceptualisation, Measurement and Targeting, Security and Development: The Geo-politics of China-Pakistan-India Relationship, Re-imaging South Asian Security, Climate Change: Readapting Forest Management in South Asia and Bioenergy and Sustainability: Exploring Renewable Energy Alternatives in South Asia. Development beyond the Millennium Development Goals (MDGs), Redefining Governance through Social Accountability in South Asia, 18th Amendment and Devolution, Indus River Watershed: Adapting, Mitigating, and Sustaining the Social-Ecological Change and Climate Change Concerns and their Possible Impact on South Asian Countries were other intriguing issues that attracted a large audience.

A couple of students shared with TNS that participants in this conference helped them find answers to many questions they had in their minds. They felt that being an independent forum, free of any political or other influence, allows them to ask questions which very few think-tanks would allow. The availability of so many great minds under one roof is a unique opportunity that they get only once in a year, they add.

Shafqat Munir, Editor Infochange and Advisor for SDPI, says that live web-streaming has been used for the first time for SDC. The idea of web TV was the brainchild of SDPI executive editor Dr Suleri and he put up a team for this purpose. This time over 1300 people watched the proceedings of the conference live, including discussions and interviews conducted on the sidelines of the conference.

Shafqat says this has been a successful experience and liked by donors, scholars and the audience all over the globe. Web TV streaming is no doubt a highly cost-effective venture and more participatory.

The participants who joined us through web-streaming were able to benefit from the gathering of 158 scholars and speakers from 13 countries and during 30 sessions on issues ranging from climate change, food security, regional trade, literature, to governance, education, MDGs, water, energy and agriculture. “I feel there is a need to build bridges between research and grassroots social movements to redefine paradigms of sustainable development,” he says. We need to harness social capital for a people’s centric development and governance of development.

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