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DINA
DAWN - the Internet Edition



16 September 2004 Thursday 30 Rajab 1425

Editorial


Short-term economic challenges
Overloaded cabinet
Controlling vehicle pollution




Short-term economic challenges


With the first quarter of the current financial year nearing the end, the outlook for the economy in the medium term continues to be encouraging. However, in the short term the country is facing some highly disturbing problems.

The most immediate of these are agriculture-related. A serious shortage of water in both irrigated and rain-fed areas is looming large. Water in the dams has fallen so low that its distribution is becoming ever more problematic with the government in each province being engaged in the tough exercise of making do with what is available and still trying to protect most of the respective cash crops.

This is an uphill task. This is the reason why it is imperative that the government come up quickly with some short and medium- term plans to boost the manufacturing sector so that growth in this sector matches at least its performance in the last year.

Manufacturing sector is overwhelmingly dependent on the cotton crop as at least about 65 per cent of the country's exports are based on cotton. In the last three to four years, the textile manufacturers have spent almost about five billion dollars on repairing, modernizing and balancing their factories in order to meet the challenges of a quota-free world market from January 2005 onwards.

Still, it is time to ask ourselves if we can maintain our share of the world textile market and improve on it in the immediate future in the face of the on-coming competition from regional countries like China and India in quality and cost and cover if any gaps and deficiencies have been left unattended.

Despite the inclement weather, our cotton crop has done well this year and has yielded an estimated crop of 10.7 million tons. This is not a bumper crop but still very good and should provide us with an edge to move into places in the world textile market expected to be vacated by the non-cotton growing countries after the lifting of the quota system.

Here it is important to keep in mind the anticipated adverse impact on the hydropower production as a result of a shortage of water. Almost about 50 per cent of an installed power capacity of nearly 20,000 MW is supplied by hydropower.

So, in order to minimize the approaching shortages, plans must be taken in hand to bridge the gap with furnace oil and gas-fired power plants. This would surely increase the oil import bill widening the trade deficit which has already increased considerably beyond the year's target because of the increase in world oil prices as well as the need to import wheat.

Here too the management skills of Shaukat Aziz and his team of technocrats now reinforced by the induction of another technocrat, Dr Salman Shah, as adviser to the prime minister on finance with a federal cabinet rank, would come under severe pressure for innovative ideas to keep the wheels of industry moving without unduly adding to the current year's trade and budgetary deficits.

One also needs to keep an eye on the rate of inflation which is already in the range of over nine per cent. If this is allowed to continue then all the current year's plans for poverty alleviation would prove abortive.

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Overloaded cabinet



Prime Minister Shaukat Aziz has got himself into a fine pickle. He has put together the country's largest cabinet so far, which has become both a subject of serious criticism and a butt of jokes.

He cannot possibly dump any of the ministers so soon after their swearing in, although he should know more than many that some loadshedding is badly needed. According to one report, the 33 federal ministers and three advisers alone will cost the public exchequer something like Rs175 million a year. There are also 26 ministers of state to reckon with.

So now he is saddled with over five dozen ministers, and may find that he doesn't know what to do with them. It has been calculated by the more devious minded of critics that every third person from the 191 ruling PML or allied party legislators who reposed trust in Mr Aziz during his vote of confidence has become a minister.

The explanation probably would be - though none has so far come from official quarters - that the prime minister was under pressure to accommodate all political groups and give due representation to all regions.

It has also been said that, for reasons of efficiency, ministries have been split; with more ministries, you need more ministers. There's surely a bit of Parkinson's law involved here somewhere.

But, seriously, doesn't Mr Aziz realize that he is actually mocking a poor nation by creating such a vast army of ministers? Does he really believe that he has a cost-efficient government that will justify the expenditure on it by the amount of work done? Or has he created a maze where everything will become more complicated? Government extravagance sends absolutely the wrong message to the people.

We need a simpler lifestyle, and we need our ministers and government functionaries, civil and military, to set the right example. Apart from earnestly looking at austerity measures and cutting down on perks as much as possible (smaller cars, lower utility bill limits, cheaper travel, fewer staff), the prime minister is also expected to ensure that all his cabinet colleagues file public declarations of assets. This is essential as part of the regime's much trumpeted policy of transparency and openness.

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Controlling vehicle pollution



The Karachi city government's proposal for keeping old and damaged buses and minibuses off the city's roads is a long overdue step. The city Nazim has said such vehicles should not be issued fitness certificates.

This will go a long way in reducing the problem of pollution created by smoke-emitting vehicles, especially buses and trucks. In this, the motor vehicle inspection department, which issues the fitness certificates, has a crucial role to play.

It must ensure that any deviation from the rules of fitness is not allowed and that any motor vehicle examiner responsible for such irregularities is strictly dealt with. Similarly, the traffic police should see to it that all unfit vehicles are kept off the city's roads.

The Sindh High Court's action on Tuesday dismissing a case against the building of bus termini on the outskirts of the city is also very encouraging. The city government should start work on this project on a priority basis so that the large inter-city buses are not allowed to worsen the problem of congestion and pollution any more.

Another plan that would help reduce the extent of pollution is that of converting all public transport vehicles to CNG in place of diesel. The city's traffic police chief has said that these conversions should take place within six months.

Keeping in mind the example of Delhi before us, such a conversion from one fuel to another is both economical and desirable on health grounds. For this, the government should take steps to ensure that the CNG kits are priced as low as possible and that the whole process does not unduly disadvantage the transporters. If a coordinated effort is adopted, such moves will go a long way in significantly reducing pollution levels in the city.

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© The DAWN Group of Newspapers, 2004