| 18 November 2004 | Thursday | 05 Shawwal 1425 |
A turn for the worse
Who killed Margaret Hassan?
Powell's flawed exit strategy
Meeting the energy demand
China has followed essentially the same model of growth that was pursued successfully by other "catch-up" economies of East Asia - first Japan and then the "miracle economies" of the region.
In that sense, it has defied the general expectation that large, continental economies will have lower trade-to-GDP ratios compared to those smaller in size. For a large economy, China is unusually open to trade and investment.
In 2004, total trade will reach 75 per cent of GDP, considerably more than that for other big countries - for America, Brazil, India and Japan the ratio is less than 30 per cent. China's exports over the last decade and a half increased at the rate of 14 per cent a year, a rate twice as high as that of the United States.
In 2003, the country accounted for six per cent of world trade, about the same as for Japan. In recent years, Chinese exports grew at a rate almost 50 per cent higher than the rate of increase of its GDP. By 2015, China's share in world trade is likely to increase to 10 per cent of the total.
While China has become a major exporting country, it has a virtual trade balance in the sense that the value of its exports match the value of its imports. The main beneficiaries of the increasing Chinese appetite for imports are the countries in East Asia who supply intermediate goods that China uses to produce final products for export mostly to developed countries.
Could a country such as Pakistan also benefit from the growing presence of China in the world trading system? This is a question to which I will return in a later article.
In fact, China's remarkable trade performance is the consequence of its decision to allow massive imports of foreign capital, which created an integrated international production system centred on transnational corporations.
The semiconductor business is one of the many examples of the development of this production chain, which involves more than 60,000 transnational corporations, mostly from America, Europe and Japan.
About a fifth of the $210 billion semiconductor industry is out sourced to contractors like the Taiwan Semiconductors Manufacturing Corporation. China, as I will discuss below, is set to successfully challenge Taiwan's predominance in this area. By 2010, nearly a third of what should then a $310 billion industry will be made by contract manufacturers, some of which will be Chinese.
Only those parts of the world economy will benefit from this development that become part of the global production chain. For the moment, however, this chain incorporates transnationals from mostly developed countries. There are few enterprises from developing countries that are participating in this chain.
For developing nations to take advantage of this development they must not only have a large presence of transnational corporations on their soil. They must also encourage the formation and growth of their own industrial enterprises, which can compete on the world stage. This is happening not only in South Korea and Taiwan but now also in China.
Participation in the rapidly changing world production system is not the only impact China will have on the global economy. Much of the increase in commodity prices in recent times is the consequence of the rapid increase in China's output.
It is already the world's largest consumer of many commodities such as steel, copper, coal and cement. After America, it is the world's largest consumer of oil. The country is responsible for much of the 50 per cent rise in the world commodity price index in the last year and a half.
Is it a good strategy for commodity producers and exporters - such as several countries in Latin America and also Pakistan, a major world producer of cotton - to depend on a secular increase in commodity prices, which is likely to result from continuing rapid growth in the Chinese economy? Long-term reliance on commodities to promote development would be a risky strategy for the developing world to follow. This is for many reasons.
First, as China continues to develop and restructure its economy, the proportion of commodity use per unit of output is likely to decline. Second, even more important, China's rapid increase in demand, produced, in turn, by the very rapid increase in the rate of investment is likely to be volatile.
In the second half of 2004, for instance, the rate of growth in investment is likely to decline to 10 per cent from 35 per cent increase in the first part. This is the result of the administrative controls put in place by Beijing to cool economic heating. This has already affected world commodity prices.
That commodity prices will be extremely volatile in the future since they depend so much on one country's growing demand was demonstrated recently and vividly by price fluctuations in the international copper market.
On October 12, the price of the metal in New York plunged the most in 14 years after climbing to a 15-year high the week before. This was the result of erosion of demand in China.
Copper use in China, now the world's biggest buyer, fell by 21 per cent in July from a year earlier, leading to a worldwide decline of demand of 3.3 per cent. But copper was not the only affected metal whose price was influenced in the world markets.
Nickel prices in London dropped the most in 16 years on the same day and the prices of aluminium, zinc and lead also tumbled. All these declines had a significant impact on the export earnings of those developing countries that had begun to enjoy the boom in metal markets.
Third, an increase in China's demand for commodities will be compensated by a decline in rich countries as they continue to go through structural changes in their economies. Fourth and finally, technological changes will also produce a downward pressure on commodity prices as man-made substitutes replace natural substances. An example of this is the use of fibre optics for copper.
In addition to China's role in the global production system and its impact on commodity prices, the country is also able to produce a vast variety of goods at prices not many countries can match.
Pakistan has already felt China's competition in industries such as canvas footwear and ballpoint pen. It is a mistake, however, to regard the Chinese challenge in terms of its ability to produce low wage goods. The country has made heavy investments in improving the technological base of the economy.
Given the role played by foreign direct investment in modernizing the Chinese economy, it is sometimes suggested that what we are seeing is the development of the Chinese version of Latin America's mequiladoras.
China will not remain for very long the world's reprocessing zone. It is developing an indigenous base for new technologies, sometimes with foreign help, but increasingly with its own educational and research institutions.
These institutions are now producing the world's largest output of engineers and scientists every year - more than 300,000 graduates from thousands of technical schools every year join the large army of highly skilled professionals already deployed in the country. China will become a major player in modern, technologically intensive, industries.
China has already begun to challenge some of the technology leaders in East Asia in several modern sectors. For instance, Semiconductor Manufacturing International of Shanghai (SMIC), which started production in 2001, has arrived at the technological frontier and has begun to compete with Taiwan's TSMC, the largest chip-making foundry in the world. This trend is being encouraged by the state that is helping both public and private sector corporations to develop into world-class enterprises.
While Beijing bowed to demands from Washington to stop giving SMIC and other chipmakers tax rebates that appeared to violate global trade laws administered by WTO, the government said it would seek other ways to support the industry. Beijing believes that China's share of global wafer capacity is expected to reach nine per cent by 2007, up from four per cent in 2004.
To this end, the banking system is providing cheap capital to help the indigenous corporations to restructure and develop. Acquiring foreign companies and merging them with domestic firms are doing some of this.
China has made a very effective use of a variety of regional arrangements in order to become a major economic presence in East Asia. With the country's economic rise, the structure of the East Asian economies is changing rapidly. A significant proportion of Chinese imports come from East Asia. It is now the engine that pulls the rest of East Asia behind it, including Japan.
Its role in these regional organizations has evolved over time, mostly as a pragmatic response to the opportunities it has seen in the region as well as the challenges it sensed the region posed to it.
In South Asia, on the other hand, regional arrangements have yet to play a significant role in reshaping the economies of the area. Could the contemplated regional trading arrangement in South Asia somehow incorporate China? This is another question to be explored at a later date.
Of particular interest to the South Asian countries is the role the Chinese state has played in economic development. And in this context, of particular interest is the role of the banking system in developing the new Chinese economy.
In spite of the large burden of non-performing loans on the Chinese banking system, the government continues to use the banks to restructure the state sector. The banks are lending large amounts of money to public sector corporations that are in the process of modernizing, sometimes by acquiring foreign companies.
The Chinese government is using cheap money to create global corporations that will begin to compete with large western multinational corporations. Is this an unwise policy or can the Chinese, given a large savings rate and a rapidly increasing economy, support such a strategy? Once an activist financial sector has played out its role, the Chinese will be able to restructure it in the future. They will have the resources to achieve that objective.
The Chinese state has played many other roles: in building a first class transport infrastructure, in increasing the institutional capacity to produce highly skilled workers, in investing in research and development, in purchasing foreign assets for meeting the country's future demand for resources. In light of the Chinese experience, the South Asian countries may wish to take a hard look at the way the state is performing in their own countries.
China's extraordinary rate of growth over the last quarter century and the expectation that the county will continue to grow for several years to come, are developments that countries such as Pakistan must factor into their own growth and development strategies.
Pakistan has some advantage over other countries because of the close relations it has enjoyed with the Asian giant over several decades. However, apart from receiving some assistance for important projects such as the Karakoram Highway, the Chashma nuclear power plant, and the port at Gwadar, Pakistan has not translated a close association with China into a strategic economic relationship.
This may be a good time to reflect on this and examine how close geographic proximity with a country that is well on its way to becoming the world's largest economy could be turned to Pakistan's advantage.
A turn for the worse
If anyone out there was hoping that the second Bush administration, learning from the mistakes of the first, would take a more conciliatory, multilatera list approach and reach out to opponents, they will be sadly disappointed.
The brutal assault on Fallujah, the departure of Colin Powell and his replacement by Condoleezza Rice, the appointment of Stephen Hadley as national security adviser - all signal a turn for the worse.
Colin Powell's resignation came as a surprise to no one: indeed, many expected him to submit a note to quit to the president months ago. A professional soldier for the bulk of his career, Powell won the first Iraq war for America.
Despite being black, he was a favourite to run for the presidency in 2000 - a testimony to his massive popularity. Only the assassination fears of his wife stopped him from announcing his candidacy. He still went on to make history as the first black US secretary of state.
But Powell faced problems from the start. A pragmatist and an internationalist, he had little in common with the neo-conservatives led by Cheney and Rumsfeld who dominated the Bush administration and had the ear of the president. The Cheney Rumsfeld duo (with Wolfowitz, Rice and others as back up) blocked and undermined the secretary of state at every step.
Trying to continue the Clinton administration's engagement with North Korea, he was contradicted by the White House and forced to retract. Trying to get talks on the Middle East underway with an international conference, Powell was told to come home. Trying to get UN endorsement for the war on Iraq, Powell was given one last chance to convince the international body.
But he was sent there to make a case for war based on intelligence that turned out to be totally false. Still trying to avert war by letting UN weapons inspectors complete their work, Powell learnt about Bush's decision to go ahead. The cards were truly stacked against Powell.
Could he have made a difference? Should he have stood down much sooner? Viewed in the immediate aftermath of this resignation, and his failure to generate a more multilatera list, rational US foreign policy, there are many who would conclude that Powell was ineffective and that, instead of going to the UN with his infamous presentation in February 2003, he should have resigned.
But history will judge Powell more kindly and appreciate that the odds against him succeeding were huge. The administration dominated by neo-cons, determined almost from day one to attack Iraq, and was given the all-embracing green light of 9/11 to carry out whatever policies (however illegal and aggressive) it wanted. Powell could not change the course of such an administration: no one could, especially after 9/11.
Should he then have resigned? If he was looking just at his own personal career then, yes, he should have gone long ago. But viewed from the perspective of the wider good, Powell was right to stay on: his presence made a difference. He was a braking force which, while it could not stop the drive to war, could at least slow it down a bit.
He was the voice of reason that forced the Bush administration to at least once go to the UN for a mandate for war; that led to Bush being the first American president to openly declare support for a Palestinian state.
To appreciate the difference that Powell made, and how much worse things would have been without him, one only has to look at the defence department, at the CIA since it has been taken over by Porter Goss, or to the state department over the next few months as neo-con and ultra-Bush loyalist Condoleeza Rice takes over.
In all those departments, headed by 'true believers' (in the war on terror, the war on Iraq, etc.) there is a frightening lack of debate, intolerance of dissenting opinion, and a determination to press ahead with the neo-con agenda even though it is having such disastrous consequences.
The state department under Powell's leadership (and with men like Richard Armitage on board) was a lonely island of reason in a sea of dangerous irrationality. Now that island, too, will come under water.
Asked to comment on Powell's resignation, one elderly New York woman told the CNN reporter, 'I don't care anymore: the whole situation is so depressing.' Her comment sums up the mood among rational people in the United States and across the globe. Powell's departure (and replacement by Rice) is the latest in a long line of setbacks for such voices of reason.
A president who has been proven to have failed on the economy, on domestic issues like health care and education, in the war on terror, who led his country into a totally unjustified and unnecessary war in Iraq - has been re-elected.
Not by a supreme court decision or electoral rigging, but by the conscious active support of over 58 million Americans. The fact that so many Americans voted for Bush, knowing he has done so badly, is truly depressing.
A key source of support for Bush was the religious right, which is showing a frightening ascendancy in American life. A recent BBC documentary provided a fascinating insight into evangelist thinking: a 10-year old claimed to have been 'born again' at the age of three, and calmly declared that 'if you don't have Jesus Christ in your heart you will go to hell'.
And they called the Talibans fundamentalists Meanwhile, Porter Goss is merrily purging the CIA of opposing voices. Donald Rumsfeld is continuing his 'crush with force' war in Iraq, with a new assault on Fallujah.
What is happening in the US is almost akin to a Hollywood movie in which, one by one, the forces of evil crush those of good and establish their supremacy. In the battle between 'good' and 'evil' in the United States, 'evil' has just scored another victory - ousting Colin Powell. In Hollywood, the forces of good always come back to triumph: will they do so in the United States?
iffatidris2000@yahoo.co.uk.
Who killed Margaret Hassan?
After the grief, the astonishment, heartbreak, anger and fury over the apparent murder of such a good and saintly woman, that is the question that her friends - and, quite possibly, the Iraqi insurgents - will be asking.
This Anglo-Irish lady held an Iraqi passport. She had lived in Iraq for 30 years, she had dedicated her life to the welfare of Iraqis in need. She hated the UN sanctions and opposed the Anglo-American invasion. So who killed Margaret Hassan?
Of course, those of us who knew her will reflect on the appalling implications of the video tape which, so her husband believes, is evidence of her death. If Margaret Hassan can be kidnapped and murdered, how much further can we fall into the Iraqi pit? There are no barriers, no frontiers of immorality left. What price is innocence now worth in the anarchy that we have brought to Iraq? The answer is simple: nothing.
I remember her arguing with doctors and truck drivers when a lorry load of medicines for Iraq's children's cancer wards - courtesy of Independent readers - in 1998. She smiled, cajoled, pleaded to get these leukaemia drugs to Basra and Mosul.
She would not have wished to be called an angel - Margaret didn't like cliches. Even now I want to write "doesn't like cliches", are we really permitted to say that she is dead? For the bureaucrats and the western leaders who will express their outrage and sorrow at her reported death, she had nothing but scorn.
Yes, she knew the risks. Margaret Hassan was well aware that many Iraqi women had been kidnapped, raped, ransomed or murdered by the Baghdad Mafia. Because she is a western woman - the first western woman to be abducted and apparently murdered - we forget how many Iraqi women have already suffered this terrible fate.
Largely unreported in a world which counts dead American soldiers but ignores the fatalities among those with darker skins and browner eyes and a different religion, whom we claimed to have liberated.
And now let's remember the other, earlier videos. Margaret Hassan crying. Margaret Hassan fainting, Margaret Hassan having water thrown over her face to revive her, Margaret Hassan crying again, pleading for the withdrawal of the Black Watch from the Euphrates river basin.
In the background of these appalling pictures, there were none of the usual Islamic banners. There were none of the usual armed and hooded men. There were no Quranic recitations.
And when it percolated through to Fallujah and Ramadi that the mere act of kidnapping Margaret Hassan was close to heresy, the combined resistance groups of Fallujah - and the message genuinely came from them - demanded her release.
So, incredibly, did Abu Musab al-Zarqawi, the Al-Qaeda man whom the Americans falsely claimed to be leading the Iraqi insurrection - but who has very definitely been involved in the kidnapping and beheading of foreigners.
Other abducted women - the two Italian aid workers, for example - were freed when their captors recognized their innocence. But not Margaret Hassan, even though she spoke fluent Arabic and could explain her work to her captors in their own language.
There was one mysterious video that floated to the surface this year, a group of armed men promising to seize al-Zarqawi, claiming he was anti-Iraq, politely referring to the occupation armies as "the coalition forces".
This was quickly nicknamed the "Alawi tape". After the American appointed ex-CIA agent and ex-Baathist who holds the title of "interim prime minister" in Iraq, the same Alawi who fatuously claimed there were no civilian deaths in Fallujah.
So if anyone doubted the murderous nature of the insurgents, what better way to prove their viciousness than to produce evidence of Margaret Hassan's murder? What more ruthless way could there be of demonstrating to the world that America and Alawi's tinpot army were fighting "evil" in Fallujah and the other Iraqi cities that are now controlled by Washington's enemies.
No, of course we cannot say that Alawi was involved in Margaret Hassan's death, even though he would have hated her political views. Just because the "interim prime minister" is widely believed in Baghdad to have executed seven prisoners in the Amariya police station just before taking office - he denies this - should not suggest he would ever have a hand in so terrible a deed.
But the question has to be answered: Who killed Margaret Hassan? - (c) The Independent
Powell's flawed exit strategy
With his indecision, with his occasional vacillation, someone is bound to conjure up Hamlet in reference to Colin Powell. Not to quibble, but it is Macbeth who comes to my mind - specifically his soliloquy that begins, "If it were done when 'tis done, then 'twere well it were done quickly." The pity is not that Colin Powell has resigned as secretary of state. The pity is that he did not do so quickly.
Had he resigned during the buildup to the war in Iraq, which he privately opposed, history might award him an asterisk and note that his tenure as secretary of state, while notable for nothing notable, ended over an important disagreement.
Had that happened, Powell could then join just two secretaries of state - William Jennings Bryan and Cyrus Vance - who resigned because they differed with their presidents, Bryan with Woodrow Wilson, Vance with Jimmy Carter. The best that can be said about Powell is that he disagreed. The worst is that he did nothing significant about it.
This is a harsh judgment, I know, and I make it reluctantly because I have always liked and admired Powell. Most of Washington and a good part of America does as well. He is an enormously likable man, possessed of charm and wit, with a solid sense of the practical.
He is, in fact, one of the few in Washington who can claim a doctrine - the so-called Powell Doctrine - that calls, among other things, for the avoidance of quagmires by using massive force and having a clear exit strategy. The Bush administration violated it on a grand scale, and not even Powell objected publicly.
The last time I went to see Powell he was ready for me with a column I had written about him last May. I had been at a conference in Jordan, and Powell had come there to make a speech and also to deal with the Arab press.
I watched his news conference and noted that his physical location, the Dead Sea, about matched his standing in the region. He was at the lowest point on Earth. Powell didn't much like that column, but while he had it ready for me, he didn't argue it or wave it in my face. He seemed genuinely convinced I was wrong.
But on the paramount issues of the region - the Iraq war and the collapse of the Israeli-Palestinian peace process - the United States was not only on the defensive, it was being viewed with contempt.
It was perceived as anti-Arab, the landlord of Abu Ghraib prison with its abuses, and the invader of Iraq for reasons that seemed specious - no weapons of mass destruction, among other things.
As for Powell himself, he was viewed as nice but ineffective, a foreign minister who could not speak for his own government. It was well known where Powell stood on many important questions. It was just as well known that the president - or, more important, the vice president - disagreed with him.
Among other things, Powell had publicly said the president was fully behind the "road map" to a Middle East peace. Maybe. But Bush did next to nothing about it. Powell implored. Tony Blair implored.
But the Middle East brief was not being run out of the State Department; it was being run by neo-conservatives on the White House staff. Powell said what he wanted. His opponents did what they wanted.
But nothing compares to Iraq. The decision to go to war was the single most important foreign policy act of George Bush's first term. Powell not only couldn't stop it, he never saw it coming.
When the possibility of war first arose, he dismissed it to aides and, by the time he grasped what was happening, it was too late. Powell the soldier saluted and went to war. -Dawn/Washington Post Service
Meeting the energy demand
The world oil price had peaked after it had touched 56.7 dollars a barrel in New Work in October, says the International Energy Agency. Since then it has come down by 15 per cent, and the slide continues, along with modest fluctuations.
The US has built up enough of the stock for the winter heating of its homes, while the fear of a colder winter may push up prices modestly. The OPEC member states' production is at peak, far exceeding their quotas designed to keep the prices up and supply restricted.
Workers' strike in some of the oil states like Nigeria are over. Russia too is making its considerable contribution to the world oil supply. And China which, was in frightful hurry earlier to secure its oil supply sources on a long-term basis, has now moderated its quest, lest that keeps the prices up.
India increased its oil and gas prices substantially after waiting much for the world oil price to come down. The Pakistan government, however, stuck to its decision made in May of not making any increase in oil prices. But there are reports that the POL prices would be raised after Eid.
The question arises: will it be prudent to do so now when the world oil prices are on a downward slide? Of course, gas prices will go up from time to time as agreed with the World Bank and the Asian development Bank, but the question is about a rise in POL prices which has been held down after May.
It was then argued that since the tax revenues of the state had increased, that can make up for the rise in imported oil prices, while the foreign exchange reserve of over 12.3 billion dollars could be used for financing import of POL.
Apart from the increased tax revenues the government had received Rs. 49 billion as dividend from companies whose shares it owns. The Pakistan Telecommunications Agency also contributed Rs. 14 billion to the national exchequer through auction of spectrum for Wireless Local Loop (WLL) licence. The government is having windfall gains in revenues from several sources. So the government can stick its earlier promise of not to increase POL prices.
The oil marketing companies which had earlier urged the government to raise prices of POL so that they can reduce their losses have been given their second instalment of compensation of a billion rupees.
Privatization, too, is to make headway with Kot Adu Power Company, the large State Life and PTCL on the auction block. The Expo Centre is also to be privatized. Although the income from their sales is to go largely towards external debt reduction, it will indirectly help the government by reducing the heavy debt burden and improving its financial image abroad.
President Musharraf wants a quantum jump in exports. But the focus now is more on imports in view of the shortage of essential items in the country and price manipulation by unscrupulous elements. But there is one commodity which can be exported lucratively: cotton.
Cotton production which was earlier estimated at 10 million bales and then 12.1 million bales, is now suddenly projected at 13.5 million bales. And the Trading Corporation of Pakistan has been commissioned by the government to ensure that prices do not come down in the farming areas and hurt the farmers who have helped produce such good results. The government has also decided to import 90,000 tonnes of Urea.
Pakistan is also to import one million tonnes of wheat in view of the fall in its output in the coming Rabi season. And immediately 500,000 tonnes are to be imported to build a reserve. The Sindh government says it needs 500,000 tonnes of wheat to build its own reserve.
A new subsidy policy for power has been approved by the prime minister, and is to be released soon. How much relief it will actually bring to the hard pressed and exploited consumers remains to be seen.
Meanwhile the Sindh government says it wants a uniform power rate for the province instead of a low WAPDA rate for the province but a higher KESC rate for Karachi as power thieves thrive in the system, apart from the rulers who may misuse the power system flagrantly.
Meanwhile, the Parliamentary Committee on Balochistan headed by Senator Mushahid Husain has recommended higher gas mineral and oil royalty for the province which has been given too small a share of that. And the royalty sharing ratio will have to be applied to other provinces as well.
Meanwhile, inflation in the country has far exceeded the rate projected by the government. Instead of the five per cent for the whole year projected by the government, by the end of October the Consumer Prices Index was 8.7 per cent.
The Sensitive Price Index covering mostly food items touched 11.84 per cent for the same period. By the time the Ramazan and Eid consumption ends, the index will be far higher. The government computes inflation in terms of percentages while the people compute that in terms of rise in prices by rupees, which is too high.
And now while the President calls for a quantum jump in exports, Commerce Minister Humayun Akhtar wants 300 more items to be imported from India, raising the total of the items permitted to 1,000. The minister says he had made such recommendation to the government on the basis of requests from businessmen and industrialists.
The new items include machinery, industrial raw material and high speed diesel. The All Pakistan Textile Mills Association had asked the government to permit the import of textile machinery and chemicals from India which are cheap compared to the imports from Europe.
The president of the Federation of the Pakistan Chambers of Commerce and Industry Riaz Tata has called for removal of all barriers in trade between India and Pakistan. He held talks with the Punjab, Haryana and Delhi Chamber of Commerce delegation.
Both wanted a negative list of items in which mutual trade is not be permitted so that they are free to trade in all other items. India has also officially made a request for a negative list of items but the Pakistan government has rejected that request.
Pakistan now trades on the basis of a negative list with Afghanistan. The number of items on the list has been shrinking, and has now come down to six. And that list may shrink further after the next round of talks by the end of the month.
Meanwhile Pakistan and China have agreed to form a Free Trade Area and expand the Preferential Trade Agreement. A protocol in this respect may be signed when prime minister Shaukat Aziz visits China soon. Pakistan is now negotiating Free Trade Area agreements with a large number of countries.
Meanwhile, Pakistan sustained a trade deficit during July-October last. While the exports were up by 12.3 per cent, imports shot up by 37.4 per cent or 1.432 billion dollars. The problem with Pakistan is its exportable surplus is small and the value-added part of its exports is not very high.
The quality premium that we earn from our exports is small. Much of the inputs is imported, including energy, several of the raw materials, chemicals, packaging for the special quality products apart from the machinery and spare parts. So as the exports go up, the imports too go up, beginning with oil. Agriculture has not undergone the change it should have.
Another area where development has been lacking is infrastructure. It is inadequate on one side and neglected on the other side and lacking in timely repairs and maintenance. The government has now requested the World Bank for help in the development and maintenance of infrastructure.
The adviser to finance minister Dr. Salman Shah says the government is focusing on private sector development, and is trying to reduce production costs and of doing business in the country. It wants to make our production more competitive in the global market.
Such steps are essential not only to compete with foreign goods but also to give a better deal to the people of Pakistan. In fact if they do not reduce their prices and improve the quality of their services the consumers will turn to imported goods in the manner they are preferring Chinese goods now.
In fact, the businessman are accustomed to selling their goods at high prices at home as they were until recently not seriously interested in exports. But now that the exports are being given more and more incentives they are opting for exports in a significant manner, particularly the advanced textile units.
India is making use of its 120 billion dollar foreign exchange reserves to build its infrastructure, including power production but we are dependent on World Bank and the Asian Development Bank.
The minimum that we can do, after having built the infrastructure with the help of foreign assistance, is to maintain it properly unlike the canal network which we have allowed to degenerate.
The manner in which we are importing wheat to feed the people and fertilizers to produce large crops, shows we cannot afford to be negligent in the area of positive development while the population goes on increasing.
The population growth target of 1.3 per cent per year is not to be achieved before 2020. Meanwhile, it will be an uphill task to make sure it is the end result that we seek.
The population explosion does not permit any laxity in the area of economic development, particularly agricultural development to feed the people and keep poverty and under nourishment at bay.