| August 26, 2002 | Monday | Jamadi-us-Saani 16,1423 |
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Rights’ abuses: EU’s concern
A promising initiative
PAKISTAN and the US have signed an agreement under which the latter has rescheduled its three billion dollar debt owed by Islamabad. The terms of the agreement are quite generous in that the official development assistance amounting to 2.3 billion dollars of the total debt will now be repayable over a period of 38 years and the rest, which is non-official development assistance, over 23 years. The relief thus provided is part of the original Paris Club agreement on debt rescheduling which Pakistan signed in December 2001. By its own stipulation, the Paris accord would become effective only if Pakistan succeeded in entering into bilateral rescheduling agreements with all the donor-members separately by December 2002. Islamabad has already done so with a number of donors and in the coming months it is likely to sign similar accords with the rest of the Paris Club members. On the face of it, the timing of the conclusion the US-Pakistan debt rescheduling agreement does not seem to be related to any immediate political or economic development in either country. But, then, it sends out the right signal to the right quarters, especially the US investors, to take a fresh look at Pakistan’s investment potential. The USAID has already opened its offices here and is now engaged in finalizing education and health development projects. The $600 million US grant to Pakistan soon after 9/11 has also given a vital boost to Pakistan’s economy.
As a result of the Paris Club rescheduling agreement the immediate debt servicing burden has been considerably eased. Accordingly, allocation for debt servicing in the current budget could be kept at manageable levels. Pakistan has already taken a number of steps to reduce the burden of domestic debt as well, bringing it, as a percentage of GDP, down from 52 per cent to 47 per cent. The foreign debt has shrunk from 38 billion dollars to 36 billion dollars. As a result, the overall debt-servicing burden as a percentage of GDP has come down from 11 to 8.6 per cent. According to the finance minister, it will be further lowered to 7.2 per cent by the end of the current financial year. The fiscal room thus made available has also helped the country in accumulating record foreign exchange reserves amounting to over seven billion dollars within two years. The performance of exports and revenue in the first month of the current financial year was also highly encouraging. One only hopes that the buoyant trend is sustained until a full turnaround is achieved.
The only worrying factor at the moment is the continued stagnation on the investment front. The local entrepreneurs still remain shy. They are perhaps waiting to see how things would shape up following the October elections. In any case, election times are never too propitious for investment. Sitting governments usually try to use public spending for winning votes and therefore make investment announcements and even disburse promised allocations before polls. But since the military government is not in the run for the October polls, this kind of spending is not taking place at the moment. Foreign investors are perhaps still engaged in recouping the reverses they suffered in the post 9/11 period. So, seemingly investment is not likely to perk up until the end of the current year. At any rate, things would not start looking up sufficiently unless the government itself takes the initiative and showed the way to the foreign and domestic investors by taking in hand at least some vital infrastructural projects.
THE European Union has expressed its concern over human rights violations in Afghanistan following the fall of the Taliban regime. The EU’s special envoy for Afghanistan, currently on a visit to that country, stated on Friday that those responsible for war crimes must be punished regardless of the political repercussions. He was particularly concerned about reports that about 1,000 Taliban prisoners captured by forces loyal to powerful Uzbek warlord Abdul Rashid Dostum died of suffocation while being transported in truck containers early this year. Dostum is an important figure in the Northern Alliance, which allied itself with the US-led war in Afghanistan and helped oust the Taliban.
Subsequently, a mass grave was discovered in Dostum’s stronghold in the north, believed to be the site where the victims were hurriedly buried. While the EU is keen to press ahead with a probe, many of Dostum’s supporters warn that any move to prosecute Dostum would plunge Afghanistan into greater instability. Dostum’s supporters do, however, admit that some 200 pro-Taliban prisoners did perish in transit but claim that the deaths were accidental. This is by no means the only incident of its kind in Afghanistan since the fall of the Taliban. There have been other reports of massacres of Taliban fighters, as well as ill-treatment of prisoners. Pushtoons, who are a minority in the north of the country, have also been severely persecuted and many have been forced to flee their homes. At the heart of all this is the inability of Hamid Karzai’s government in Kabul to extend its writ beyond the capital. The EU has now threatened to withhold all investment in the war-ravaged country until a semblance of stability returns and the Karzai government is able to assert its authority and move to tame the warlords.
THE ‘GEMS-2002’ project, launched by the Pakistan Software Export Board in Lahore on Friday, marks an important step towards developing Pakistan’s export potential in this field. As part of the move, 20 new companies would be created for young entrepreneurs to provide them with professional guidance in the financial and marketing sectors. Young information technology (IT) professionals cannot turn their ideas and skills into marketable products without logistical support for the purpose. Emerging software spheres, including games, network pools and system utilities, which are relatively untouched in Pakistan so far, are the focus of the programme. Being a business enterprise, the project hopes to generate software exports of over five million dollars during the next year. The PSEB will continue to guide young IT entrepreneurs all this while to help them market their products. For this they will initially be required to share 20 per cent of the profits they earn with the PSEB.
The initiative should open new vistas for IT entrepreneurs and also help in setting up more software houses across the country to cater to international demand and meet the needs of young IT professionals. More importantly, inadequacy of IT in the local industry and the Export Promotion Bureau is a hurdle in boosting exports. In this context, the project will help bring automation and networking to this sector and enable Pakistan to build an important place for itself in this competitive field.