| April 29, 2002 | Monday | Safar 15, 1423 |
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Bhakkar bomb blast
Eat at your own peril
WITH its foreign exchange reserves standing at a satisfactory level, Pakistan today is ironically faced with the problems of plenty — and the negative effects of this situation have already begun to make an impact on the economy. The reason for this adverse impact is simple: the accumulation of reserves has not come about in a normal way through “natural” factors but is the result of extraordinary external circumstances. A normal build-up of reserves comes about through a number of factors. These include a surplus of earnings from exports over payments for imports; an excess in receipts from services over payments for the same; a rise in remittances from expatriates; and an excess inflow of foreign direct investment as compared to the outflow of dividends and repatriation of capital. Of all these factors, only remittances have recently shown a positive trend, and that, too, because Pakistani expatriates’ confidence in the safety of their savings in the Gulf and the USA has been shaken.
The close monitoring of hawala transactions has made this mode of transaction a bit risky, making official banking channels seem like a safer option. In short, all those factors which internally provide an impetus to the economy and propel it to a higher level of growth and create new job opportunities still lie dormant. Export earnings are down, foreign exchange receipts from the services sector show no improvement, and foreign direct investment has not picked up. Excess reserves — largely created through purchases in the kerb or inter-bank markets, balance of payment support aid, and debt relief from international financial institutions and anti-terror coalition allies — have all combined to strengthen the rupee. This has eroded the competitive edge of the country’s exports, specially of cotton products, which constitute two-thirds of our foreign exchange earnings. The over-valuation of the rupee not only hampers exports but also discourages foreign investors. It is this factor which has prompted the IMF to suggest that foreign exchange spending be increased. However, the problem is how to raise such spending, which would be conducive to expansion and growth.
Foreign exchange could be spent by increasing the import of consumer goods, capital equipment, technology for development projects and weapons for the defence forces. Increased imports of consumer goods and weapons will have a depressing effect on the economy as they would hit local production and accentuate joblessness. On the contrary, the economy will expand if imports are made for development projects. However, development spending is not increasing for two reasons: foreign and domestic investors find the environment not conducive — mainly for security reasons — and matching local funds are not available as the government’s own revenues are much below the target despite the highly optimistic tax survey.
In addition to these problems, the government’s priorities are not growth-oriented. In order to deal with the new situation, present policies must be readjusted, the value of the rupee stabilized at a level that provides a stimulus to exports, and the taxation structure reshaped so that it yields higher receipts and depends more on direct taxation as opposed to the current emphasis on indirect tax. Equally important is the need for continuity in policies, which can only come about through a national consensus rather than from a resort to coercion.
THE monster of sectarianism reared its ugly head again on Thursday when 12 women and children were killed in a bomb blast in an imambargah in Bhakkar. The inefficiency of the police and security agencies can be gauged from the fact that security was tightened after the blast as if that would prevent further attacks. The inspector general of Punjab has been quick to point the finger at two prime suspects: Al Qaeda and India. Unfortunately, it is much easier to parcel out blame than to actually catch those involved in such dastardly acts.
The police, security services and the intelligence agencies should know that after the president’s January 12 speech, certain elements opposed to his rule, and at the receiving end of the consequences of September 11, are trying their best to undermine his government. To that end, several acts of violence, mostly of a sectarian nature, have taken place, and regrettably the law enforcement agencies have been unable to arrest any of the killers behind such attacks. Tightening security after a deadly bomb explosion might help in catching the culprits or containing a possible backlash but is unlikely to prevent further sectarian attacks elsewhere. For that the intelligence agencies need to get their act together.
Surely, with a plethora of intelligence agencies existing in the military and civilian sectors, the state security apparatus should not find it so difficult to penetrate terrorist networks and act in time to abort such attacks. The task before the authorities is clear: they have to improve the operational efficiency of the police and other security agencies and of the numerous intelligence outfits that exist. This includes greater coordination and cooperation between civilian and military security agencies. Hopefully, the recent agreement signed between Islamabad and Washington for greater security cooperation will help enhance the investigative techniques of our law enforcement wings.
ACCORDING to a recent study conducted at a Swedish university, most carbohydrate-rich fried and baked foods contain alarmingly high quantities of a substance known to cause cancer. Among such food items are bread, crisps, fries, biscuits, fried rice and cereals. The findings of the study are shocking in that they leave precious little in terms of modern-day diet that is not carcinogen. The fatal substance, acrylamide, is a colourless crystalline solid, which is clinically proved to cause cancer, and the World Health Organization directives already limit its concentration in drinking water to one microgram per litre. The study, funded by the Swedish government, revealed that baked or fried potatoes, bread and cereals, and similar everyday food items contain as much as 500 times the WHO-permissible quantities of the fatal substance. The only way to prepare carbohydrate-rich food that does not pose a serious health hazard is, thus, boiled food, the study concluded. This means the Pakistanis, for whom ‘roti’ is staple diet, and indeed the rest of the world have been consuming utterly unhealthy food. The Swedish government has commissioned subsequent research to confirm or reject the findings of the study.
Scientists and food analysts have long confirmed the link between acrylamide and cancer, but the discovery that its formation in carbohydrate-rich diet is due to a certain way of preparing such diet is a new knowledge. Potato crisp manufacturers and fast food chains across Europe said that the findings came as a shock to them, as many blue-chip shares on the world bourses fell to their record low following the discovery. Unlike the US, Europe does not have any equivalents of the food lobbyists, who would have made sure that the news did not break and cause panic in the consumers. Ominously, and predictably, the media across the Atlantic has managed to keep mum on the subject. Would it be any surprise, then, if western manufactured and packaged carbohydrate-rich food should soon flood the third world’s supermarkets?