03 May 2004	Monday	12 Rabi-ul-Awwal 1425

It is too long a time to take a decision on an issue which could benefit Pakistan's relationship with the neighbouring countries, or could take our country far away from the trade bloc of the littoral states on Indian Ocean.

South African Foreign Minister Pik Batha visiting Islamabad on the first leg of his tour to Asian countries in November 1993 was to seek support for Nelson Mandela's dream of forming a viable trade bloc of the Indian Ocean countries to counter the European countries' intentions to establish their monopoly in the region.

After a lapse of almost 14 years our foreign ministry as yet is to take a decision. This is not the first time. Taking decision at the right time has never been the tradition of our bureaucracy. And the whole nation pays for it.

The most obvious reasons on which the lobby of bureaucracy and some businessmen has strongly organized to resist awarding the MFN status to India are not just fears of threat to the Pakistani industry by cheap Indian products and the Kashmir issue.

One evolves around economic interest and the other political. The debate has heated up in the last two years, leading to further politicizing the issue. To keep the issue in a boiling pot shows lack of foresight as to how we have failed to reap benefit at the right moment.

Before the debate prolongs, we should look into, whether India really needs a MFN status when Pakistan had already given and committed tariff concession to it under South Asian Preference Tariff Arrangement (sapta) and South Asian Free Trade Agreement (Safta) and when the WTO implementation of agreements comes into effect after about eight months? And who is the ultimate beneficiary - Pakistan or India if the status is not granted?

Honestly, a realistic analysis of the situation, amid these questions, refers to the present high time for Pakistan to grant the MFN status to India, gracefully and save itself from the humiliation and exploitation by India on the international forums under the pretext of trade discrimination.

It is on record that Pakistan is a signatory to Sapta. Under this it has given 10 to 20 per cent customs duty tariff concession on 763 items to India. Still there is room to grant relief on 277 more.

Pakistan is also a signatory to Safta, to be effective from 2006 and fully implemented by 2015.Even before Sapta and Safta, the WTO's free trade regime will come into force about eight months from now, under which no country will have to wait to seek the MFN status.

All trade barriers will be removed from January 01, 2005 and India and Pakistan will have reciprocal MFN status. Why then the decision is not taken today? It is in Pakistan's interest to go for a reciprocal MFN status to India and leave the bandwagon of those who so far have succeeded in keeping Pakistan at the losers' end.

It has now become a matter of Pakistan's prestige and reputation. By denying India the MFN status Pakistan itself has provided India with an opportunity to malign its image as an honest trade partner at international forums.

One of the many examples is that of the Indian Ocean Rim Association for Regional Co-operation (IOR-ARC). In a few years after Gatt, about 170 regional and bilateral trade arrangements have been signed. More regional blocs are under formation. The IOR-ARC has immense economic potential. All littoral states have access to this trade bloc as a matter of right.

Starting as the Indian Ocean Rim Consultative Business Network (IORCBN) and later the Indian Ocean Rim Business Forum (IORBF), the IOR-ARC was established in 1997 by nine founding member countries, Australia, Singapore, India, Kenya, the UAE, Iran, Mauritius, Oman and South Africa.

Since then the IOR-ARC has held several meetings, regularly and has been executing seven different projects to facilitate trade and investment flows among member countries.

The IOR-ARC is also considering an over-arching policy objective of achieving free trade arrangements and investment among member countries by 2010. Pakistan has lost immense opportunities to have a share in consultation and be part of those projects.

But so far, it has been serving the Indian objective of keeping Pakistan out of Asian, African and Australian trade blocs. The IOR-ARC has expanded itself to 19 countries by adding Mozambique, Yemen, Sri Lanka, Malaysia, Indonesia, Tanzania, Madagascar, Bangladesh, Thailand and Seychelles.

In 1993, the Indian Ocean Rim counted for 31 per cent of the world population, but 6.3 per cent of its GDP and 10.7 per cent of its trade. In 1994, the intra-IOR trade was only 22 per cent of the total.

There lies a great intra-regional trade prospect besides inter-regional trade, not adequately explored so far. It will be interesting to note that Pakistan is not in any regional bloc except the ECO and Saarc which have not taken off the ground as yet.

Pakistan has equally a very strategic location, almost half way, if we look at the sea route running from Durban to Australasia. Besides, Pakistan has access to the landlocked countries of Central Asia and Afghanistan.

Though Turkey is not a part of the Indian Ocean, Pakistan together with another Indian Ocean country, Iran, is part of the ECO, and both the ECO and the IOR states could benefit by establishing their trade links through Pakistani and Iranian ports.

Unfortunately, Pakistan has so far been denied membership at the IOR-ARC because of strong opposition by India. Countries like Australia, South Africa, Sri Lanka, Oman and Bangladesh have committed Pakistan full support at the IOR-ARC.

Pakistan continues to lose a substantial share in the inter-regional trade and intra-regional trade while delaying decision in this regard. Pakistan has become prone to face such Indian resistance and exploitation at many other forums.

We had one chance to be a part of a regional bloc and that too fell victim to the intellectual bankruptcy of our so-called policy making wizards. We are paying the price of such a failure as it is government which must come up with decision on the MFN.

Further delay can also force Pakistani businessmen to lose full extent of Indian market of over one billion people at just the doorstep. This is being well tapped by smugglers and illegal traders via Dubai and Singapore route.

Numbers show that the bilateral trade between Pakistan and India has fallen from 19 per cent to less than one per cent since 1948. Pakistan's exports to India in 2002 stood at $49.2 million, while imports were at $186.5 million.

The annual turnover of the unofficial trade is over one billion dollars. India remains a gainer in either case. Two very main points negate the argument if remained out of the IOR-ARC.

First, that if we can compete with the European and other countries, which technologically are far advanced than India, why not India then? Second, we have to face the reality that India has not achieved industrial excellence or competitive edge overnight.

India has taken many years since early 60's to modernize its industry. Consequently, this facilitated rapid industrialization on the one hand and made its its products competitive in international markets on the other.

Major role played in this regard is by the Confederation of Indian Industries (CII). Pakistan can learn from the achievements of developing states, particularly India and Vietnam; it does not pay to sit with folded hands and wait for opportunities.

In our case it is an irony that despite lapse of over five decades we failed to organize our industry and create such a separate body, as the CII. A separate representative forum proposed to be called the Pakistan Chamber of Industry (PCI) be established to help organize industries and enhance our competitiveness and go for rapid industrialization which is the only remedy to meet competition by enhanced productivity.

Unfortunately, certain business circles who lack innovation and creativity at their ends and bureaucracy have misguided our government. Pakistan and India have fought three wars on Kashmir and were on brink to fight a recent one. After having lost precious lives and resources on both sides, none has gained out of the prolonged confrontation.

It is high time we establish normal trade relations with India as anticipated by the WTO under multilateral trade system. The MFN status to India will add to our competitive instinct and will gain goodwill and support of very vocal and active lobby of India which holds a great influence on intellectuals and politicians.

It will also earn appreciation far and wide in the business community. Pakistan must go for improving its image and this is the time to advance our economic goals by strategic planning and timely decision making.