An earnest official move is afoot to merge the federal ministries of commerce and industry into a single multi-purpose ministry.

This is not an altogether new move. During the three years of military rule the ministries of commerce and industries had a common minister in Razzak Dawood, but with separate secretaries heading each of the ministries who were pretty influential. That arrangement has been found to be pretty satisfactory, and that is to be perpetuated soon.

An additional secretary to the government was assigned to prepare a report on the merger and he is said to have submitted a report approving it. The cabinet may take a decision on it after the President’s and Prime minister’s secretariats had examined the report and the past performance of the ministries under a single minister for the last three years examined.

The fact is that while there is hardly any ministry of industries in the developed countries there is a powerful one in each of the developing countries, but with diminishing importance in the changing global economic set up under the mighty World Trade Organization.

There is no secretary of industries in the US administration where the commerce secretary and the trade representative of the US are very powerful.

Japan’s MITI— ministry of trade and industry —is well known and has been the powerful agent behind Japan’s industrial expansion and trade promotion. In Britain it is the president of the Board of Trade who is very powerful.

But in the developing countries the ministry of industries has been important not only to promote setting up of industries but also set them up by itself when the private sector is not adequately forthcoming. Pakistan set up the Pakistan Industrial Development Corporation (PIDC) to put up industries, manage them and then sell them to the private sector.

By our old reckoning we should now have no PIDC after a large number of private sector industries had come up and more were to come in when the nationalization of industries took place in 1972 under the first PPP government and the PIDC lost its industrial units in East Pakistan.

In Pakistan the ministry of commerce was far more important and far more courted than it is today. Then the trade policy meant import policy— determining the kind of goods allowed to be imported into the country, their quantum and the extent of heavy duties on them. Import duties were a major source of revenue then, as sales tax revenues are today.

But over the years the imports have been becoming more and more liberal and most of the goods have been coming under the open general licensing system. The import duties have also plummeted from an average of 120 per cent to 25 per cent on an average now. And to add to that smuggling in has become more open and plentiful. Despite the low import duties on such goods.

In the olden days a large import licence was as good as a licence to print money as the earnings from the sale of such licence on the imported goods were very large.

But now the emphasis is on exports, on export-led growth and maximizing the value-added in exports. In the textile sector those who export denim, knit-wear, towels, and quality hosiery are making significant profits. Aziz Memon of the King’s Apparel says he was nearing his $10 million target for exporting hosiery when 9/11 and other international developments followed and upset his target.

It is now the Export Promotion Bureau (EPB) with ministerial rank for its chairman which is in the news and not the old chief controller of imports and exports (CCIE) with his highly restrictive clout. And now we are to have real export processing or promotion zones with a great many tax concessions which will focus on exporting their manufactures as such flourishing zones do in China which are to be our model. Instead of the old and lame duck EPZ in Karachi which has grown by inches over the years or decades because of excessive caution on the part of our officials and a plethora of restrictions.

While we had the ministry of industries and the ministry of commerce traditionally, following the nationalization of industries in 1972 we came to have the third set-up. The ministry of production, which was meant to maximise the output of the public sector industries, like the Pakistan Steel and other heavy industries in particular.

As privatization kept reducing the importance of the ministry of production, its privatization activities came to have larger importance, and now we have Dr. Abdul Hafeez Shaikh of the World Bank who is minister for privatization and investment. If he cannot attract enough of private investment, particularly foreign investment, he can opt for larger privatization.

In the days of Nawaz Sharif as prime minister and the military rule businessmen were preferred as minister for privatization. In the days of military rule it was Altaf Saleem from the Crescent Group who as the chairman of the Privatization Commission; but now we have an economist from the World Bank who has undertaken that job in an uncertain regional climate.

Razzak Dawood, who is well educated and exposed to the economies of the world, came up with his textile vision, engineering vision, lLeather vVision, etc, as industries minister. It is now for commerce minister Humayun Akhtar and industries minister Liaquat Jatoi to make a success of those visions. But if their ministries are to be merged which of the two among them will be given some other portfolio. Humayun Akhtar has experience of trade and industry which Liaquat Jatoi, a politician to the hilt, lacks.

Anyway we don’t need too many cooks spoiling the broth at a difficult time in our economic life. We need purposeful and effective governance to solve our numerous economic problems.—SA