| December 11, 2001 | Tuesday | Ramazan 25, 1422 |
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5,000 buses no solution
Assault on journalist
THE State Bank of Pakistan, in its first quarterly report for the fiscal year 2001-02, released on Friday, found the economy’s performance on the whole disappointing, although some sectors showed promise. The latter included home remittances, which have increased, inflation, which has declined, the trade deficit, which has narrowed, and agriculture, which showed better prospects. However, on the negative side both exports and imports registered a sharp decline in growth; tax collection was disappointing; investment, both foreign and domestic, did not pick up; and private sector credit did not take off. As the first quarter of the year is spread over two distinct periods — first two “normal months”, the last one coming under the shadow of the Sept 11 events — it would have been better if the report had distinctly shown how the economy was behaving in the first two months and how it had suffered a setback in the third month. The report gives an impression as if all the negative results were the consequence of the Sept 11 events, while the fact is that tax collection had not been improving since July, exports and imports too have been sluggish since the beginning of the year, while private sector credit and investment remained depressed in all the three month.
The greatest battering as a result of the Sept 11 events was taken by exporters, who suffered a war risk premium, a higher transportation cost, a slight appreciation of the rupee, the cancellation of orders, and the diversion of new orders. Although the government has been trying to obtain some concessions in the form of increased quotas for textiles and a greater and freer access to the markets of the US and the European Union, success is not yet certain. In the case of the latter some progress has been achieved, but in the case of the US, promises have not materialized into concrete agreements. The State Bank is right in saying that, even if the US and EU do concede the desired concessions, it would take some time to recapture the markets lost. Agriculture has shown promise. The three major Kharif crops - cotton, rice, and sugarcane - have been sown to larger areas than last year and production in each case is expected to be higher than projected despite the water shortage. Sugar manufacturing may however, suffer a setback if the on-going conflict between the growers and the crushers is not resolved immediately and crushing is further delayed. Large-scale manufacturing is another area which registered positive growth during the quarter, although it remained substantially below the previously realized growth.
The report sees mixed prospects for the current quarter. Exports will continue to take a severe beating as long as the war risk premium, higher freights and foreign importers’ fear of uncertain delivery continue. Among the better promises are the developments relating to remittances and the removal of sanctions and the consequential increased inflow of foreign assistance. The universal realization of the harmful effects of the Hundi system and steps taken to monitor financial transfers has had a healthy effect on remittances. Higher remittances and the resumed inflow of foreign aid have swelled the exchange reserves which have, in turn, stabilized the value of the rupee.This trend, on current prospects, is likely to continue.
WE must accept with a pinch of salt the Karachi Nazim’s claim that importing around 5,000 buses will solve its transport problem. He also said that it was too costly to buy all these buses in one go but that the first batch of 200 would be arriving in the next few months. Karachi seems to be plagued with a perennial public transport problem, much like Lahore or some of the other larger cities and towns. However, is getting 5,000 buses the right way to go ahead and solve the transport issue? Do not roads in our cities already have their fair share of buses and coaches? And isn’t there already too much congestion, not to mention pollution? The Nazim should also know that having 5,000 more buses will worsen traffic jams in a city where surface transportation has reached a saturation point. Accidents will also go up, because, even though buses and coaches constitute less than four per cent of Karachi’s vehicle population of approximately one million, they account for close to seventy per cent of all traffic fatalities.
Policymakers perhaps need to look at other alternatives too. Unlike many of its counterparts in neighbouring Iran and India, Karachi does not have a mass transit system. The circular railway, whose expansion could have made a dent in the problem, was closed down. We do hear from time to time that it will be revived, but one doubts if anybody is serious. Way back in the seventies, a subway system was proposed, but its cost was judged too prohibitive and the scheme was abandoned. A more feasible option, a light rail system elevated above the ground, never caught the fancy of the policymakers. The latter, too, seems to have died an unsung premature death, since no one in the government appears interested in it. Companies from two friendly countries, Canada and Turkey, had pledged to build the Karachi Mass Transit Plan (KMTP), estimated to cost 600 million dollars. However, the way successive governments, including this one, went about scuppering this project is close to scandalous, for they can be accused of violating international agreements. The lack of interest in the KMTP is indicative of the general apathy senior policymakers have shown over the years towards urban issues, foremost among which is the issue of providing affordable and reliable mass transit systems. However, it is not too late and the government can still make up for lost time by showing renewed interest in these alternatives.
ONE must be shocked by the report that a crowd of Afghan refugees in the Quetta area attacked Robert Fisk, a well-known British journalist. Fisk was lucky to survive, though he was wounded badly and said he would carry the scars the rest of his life. While the Afghans’ anger against American aerial bombing could be understood, the assault on the foreign journalist serves to underline the kind of atmosphere some jihadi parties have created in Pakistan. In this emotion-charged atmosphere, the enemy is anyone with a white skin and deserves to be done to death. If only those who assault