| April 7, 2003 | Monday | Safar 4, 1424 |
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Foreign investment prospects
Left out in the cold
THOSE planning to rebuild and reshape Iraq following the eventual ouster of the Saddam regime would do well to draw a lesson from Afghanistan, a country ‘liberated’ by US-led forces some 18 months ago. Afghanistan was also promised large amounts of funds and a newly crafted system of governance in the first flush of victory against the Taliban regime — just as Iraq is being assured of such largesse after the fall of Saddam. While an interim government was installed by a Loya Jirga following the fall of the Taliban, its hold on power remains tenuous. The promised funds for rebuilding the devastated country, meanwhile, have largely failed to materialize. Less than two years on, the reality on the ground in no way resembles the promise of a stable and peaceful Afghanistan.
The renewed bouts of fighting in that country suggest that the ousted Taliban are gradually regrouping in the south and beginning to challenge the government of President Hamid Karzai. At least eight Taliban fighters were killed in the clashes which accompanied the raids and bombing of rebel positions by US and Afghan forces in south-eastern Afghanistan on Friday. The massive operation was launched following an increase in attacks by Taliban fighters in the area. The Taliban are clearly regaining their strength and confidence after months of lying low, at least in the Pushtoon dominated areas. The militia is drawing strength from the weakness of the Karzai government and its inability to provide long promised economic benefits to the people. The government is severely handicapped because its writ does not run beyond Kabul, where the international peacekeeping forces are based. Even his personal security is the responsibility of American guards, a fact that does not go down too well with the proud and independent Afghans.
In the north, powerful warlords are in full control, refusing to accept the authority of the Kabul government. Not surprisingly, there is an increase in lawlessness in both the north and south of the country. That is one reason why the promised rehabilitation and reconstruction work in the country is at a standstill. Much of the 4.5 billion dollars pledged at a donor conference in Tokyo has yet to materialize. According to Karzai, even this amount is totally inadequate for the massive task of rebuilding Afghanistan which has been devastated by war and civil strife for more than two decades. The foremost need is to break this vicious cycle, a task made all the more difficult by the absence of a strong, cohesive and disciplined army that could break the hold of the warlords in the north and prevent the resurfacing of the Taliban in the south. As for the Americans, their attention seems totally engaged by the Iraq campaign. Despite all the promises made by Washington, Afghans fear that they are being abandoned once again, just as they were in the eighties after the withdrawal of Soviet forces. A deep sense of betrayal and despair prevails in the country, which can only strengthen the forces of anarchy, disorder and extremism. The US must remove the impression that it has lost interest in Afghanistan and quickly take up the unfinished agenda of Afghan pacification. A relapse into the anarchy of the past can only serve to destabilize the entire region. The Americans must realize that it is far easier to win a war than to deal with the problems of post-war reconstruction.
THE federal government’s target of $1.5 billion in foreign investment for 2003-04 seems to be somewhat rosy. The chairman of the Board of Investment (BoI) told this newspaper of this prospect while referring to the very encouraging foreign investment levels during the first eight months of fiscal 2002-03. He said that $630 million had come into the country so far and that this year’s target of a billion dollars would most likely be met. According to him, this figure is more than twice that for the corresponding period last year and hence expectations of a further increase are quite plausible. Keeping this in mind, the government has planned an investment conference later this month in Islamabad with the representatives of Islamic countries.
The target for next year looks quite optimistic though, not least because of the regional situation. Relations with India continue to be strained, with that country’s foreign minister threatening ‘pre-emptive’ action against Pakistan for “cross-border terrorism”, claiming that India had a stronger case for a pre-emptive attack than America had in the case of Iraq. Then, of course, is the war against Iraq, whose economic consequences for countries in the region could well be severe. Shipping companies have already imposed a war risk surcharge on traffic in and through the region.
The domestic situation is not all that encouraging either. The law and order situation remains fragile, infrastructure is far inferior to that found in some of our competitor economies, the legal system has proved quite ineffective in safeguarding contractual rights of foreign investors and the tax administration is known for its delays and harassing tactics. As for the BoI chief’s guarantee that foreign investors will “face no problems” in getting utility connections, that unfortunately is not borne out by facts. Getting a phone or power connection is a tedious process, even for corporate customers. And then hassles crop up with utility providers all too frequently with needless disputes over billing. Unless the government addresses these important flaws and deficiencies, in a careful and planned manner, and takes measures to make the economy truly investor-friendly, a wide gulf will remain between expectations of foreign investment and reality.
PUBLIC health institutions generally get a raw deal when it comes to getting past procedural and bureaucratic hurdles. The report that the building intended to house the Karachi Children’s Hospital in North Karachi is lying unutilized for the last five years is disturbing, to say the least. The facility, once up and running, could treat up to 2,000 children a day. This would make a significant difference in the treatment being offered to children in various hospitals in the city. The major hospitals, at best, only have a section of their facilities catering to children’s needs; hence the need for a dedicated children’s hospital cannot be overstated.
The hospital building, completed in 1998, was designed to house a well-equipped 150-bed hospital, having an out-patient department, an emergency ward, operation theatres and the standard laboratories and diagnostic centres. Spread over an area of several acres, the building is reportedly showing signs of dilapidation and decay because it was never allowed to get off the ground even though the bulk of the hospital equipment required to make this facility functional lies stored — and forgotten — in the store rooms of the provincial health department. This, by all logical criteria, constitutes a great wastage of national resources.
It is time the authorities concerned took action to open this much needed health care project to the public. The city district government needs to pursue this project on a priority basis in the larger public interest. This is necessary to ease the pressure on existing hospitals, which are only partially equipped to handle a growing number of children who need treatment.