Serial blasts in Mumbai

THE serial bomb blasts in packed passenger trains in Mumbai on Tuesday that left over 160 dead and 600 wounded have shaken not only India but South Asia as a whole. The tentacles of terrorism have been spreading insidiously in the region and for some time the shocking realisation has begun to dawn on people that there are monsters in their midst who think nothing of killing innocent people. The same day that tragedy struck Mumbai, the Kashmir valley was also the scene of a grenade attack in Srinagar’s tourist district where eight people were killed and 39 wounded. Although the authorities in India have not linked the two attacks, a common factor seems to exist. The atrocities in both places were the doing of beastly elements trying to drive terror in people’s minds to destabilise society and ignite the ferment of popular discontent for some ulterior motives which are not known yet. Till the time of writing no one has claimed responsibility for the attacks.

What is commendable is that the Indian prime minister and his government have displayed an admirable measure of calm and restraint in the face of mayhem and panic. Obviously, Dr Manmohan Singh is aware of the repercussions such terrorist incidents can have — the 1993 bomb attack in India’s financial hub had sparked off one of the most vicious communal riots in the city famous until then for its Hindu-Muslim harmony. This time the authorities have shown considerable restraint. One hopes that the criminals responsible for Tuesday’s dastardly act will be traced out and suitably punished. Whether they are Al Qaeda elements as is being suggested or are offshoots of the various militant groups fighting a “jihad” in Kashmir or some shady underworld gangs from a crime network who have scores to settle with the government, the strategy of tackling the problem would essentially be the same. Sound investigation techniques and modern policing methods will not only help catch the perpetrators of this horrible crime, they will also enable the authorities to ensure greater security foe people in all vulnerable places.

President Musharraf and Prime Minister Shaukat Aziz have strongly condemned the blasts as a “despicable act of terrorism”. It also speaks of maturity and statesmanship in policymaking circles in New Delhi that the government has declared that this incident will not be allowed to derail the India-Pakistan peace process. This is a positive departure from the past practice of pointing fingers at Pakistan when any such things happened. Islamabad’s position has been no different when it has blamed a hidden hand — even specifically mentioning RAW — for the unrest and turmoil it has often faced in its own troubled regions. It is time the two governments realised that terrorism is a common enemy they face and their success in fighting it depends on their joining hands in sharing intelligence and information on problems and persons involved in terrorism. They must recognise their interdependence in their common efforts to end violence or else both will continue to face a serious threat to their peace and stability. The legal framework for cooperation in the field already exists in the form of the Saarc Regional Convention on the Suppression of Terrorism of 1987 and its Additional Protocol of 2004. Besides providing for extradition, it also calls for cooperation in investigations and exchange of information.

ISI’s pervasive role

THE court proceedings in the case of missing persons should focus the nation’s attention on the invisible but pervasive entity that the Inter-Services Intelligence is. On Tuesday, the Assistant Judge Advocate-General of the Pakistan Army told the Sindh High Court that the defence ministry could only pass on the court’s order to the ISI and the Military Intelligence because it had no operational control over the two agencies. Whether the ISI is or is not involved in the case of the missing persons is for the court to determine, for any opinion on this may amount to contempt of court, but a comment on the ISI and the role it has arrogated to itself would be in order and indeed is called for. Every country has intelligence agencies whose duty it is to collect intelligence of interest to the government from a security point of view. This job includes intelligence and counter-espionage, the latter concentrating on the enemy’s spying and subversive activities within the country. But under no circumstances does the latter part of the duties involve hounding the regime’s political enemies and running torture chambers. While the latter phenomenon is the scourge of all dictatorships, men like Saddam Hussein or Hafez al-Assad would not allow their intelligence operatives to interfere with foreign policy. But in Pakistan the ISI has over-stepped all limits.

During the weak political governments (1988-1999), the ISI refused to give up the position and privileges it had acquired during the Zia regime and pursued its own policy in Afghanistan. This had disastrous consequences. It had access to unlimited financial resources and it perpetuated the military’s alliance with religious parties forged by Ziaul Haq. An example of the misuse of funds was the Mehran Bank money used by the ISI to create the Islami Jamhoori Ittehad, an anti-PPP alliance. Even though Gen Mirza Aslam Beg, the then army chief, went public with this scam, it is a measure of the ISI’s hold over the state apparatus that the National Accountability Bureau has not found the Mehran Bank case fit enough for a probe. Until the ISI is reined in and its activities are made strictly professional, its conduct will continue to militate against the growth of democratic institutions in Pakistan.

Polo festival litter

IT IS disappointing to note that after the end of the three-day polo festival in Shandur on Sunday, the area resembles a garbage dump, with waste and litter scattered all over the place - and no sign of it being cleaned up. This kind of callousness, which is now common, shows an utter disregard of the environment. People do not think twice when throwing their garbage, polythene bags and leftovers in the open —whether they are attending a polo festival or spending a day at the beach or worse, right outside their own house. However, for organisers manning food stalls at Shandur to do so is simply unacceptable. The festival’s organisers —incidentally this year it was the ministry of tourism —should have ensured that those staying in visitors’ camps or running food stalls followed strict cleanliness guidelines. This matter should be given more attention next year to ensure that it does not happen again, especially since the festival attracts many people and even foreign tourists. The administration must immediately ensure that the area is cleaned up.

It is all very well to include other activities besides polo during the festival, but it is futile to expect that tourists will flock to Shandur if the scenic valley is an eyesore because of the filth lying around. Despite being blessed with some of the world’s most stunning landscapes, facilities have remained inadequate and sanitation poor — which keeps visitors away. And those visitors who do come bring their dirty habits with them, polluting and disturbing the natural environs. It is tragic that cities are polluted but for the Northern Areas to be so is an altogether different matter. When formulating strategies to revive tourism, authorities should strive to strike a balance to ensure that the environment of the areas is preserved and basic rules of sanitation are strictly observed and respected.

A breakthrough in textiles

PAKISTAN’S premier export industry is in a crisis. Although textiles which form about 66 per cent of Pakistan’s total exports rose by 18 per cent in the first 11 months of the last financial year, they face a tough, competitive future in view of the proposed rapid expansion of the industry in Bangladesh, India and China.

So Pakistan’s textile industry had come up with a demand for a Rs50 billion package in tax concessions, reduced interest rates, subsidised utilities etc. But the government has not accepted that demand. Prime Minister Shaukat Aziz has instead come up with a demand to provide him with proof of verified concessions enjoyed by the industry in the major competitor countries.

The prime minister has told the newly constituted export promotion board at its inaugural session that its function was to formulate an export policy and not seek tax relief and other monetary concessions. Providing proof of the better fiscal and other concessions enjoyed by Pakistan’s competitors and their vast expansion plans, the committee of textile mill owners headed by Mirza Ikhtiar Baig says the verified data which the government seeks is available on the websites of those countries.

The prime minister might have agreed to some significant concessions but the tight financial situation the country faces has prevented him from doing so. He has also expressed dissatisfaction over the commerce ministry’s export performance. He wants the markets to be properly targeted. Because of certain problems the commerce ministry faces, it has not been able to announce the export policy for the year that began on July 1 so far.

If large concessions are given to the textile sector, the other export sectors are bound to clamour for the same on the pretext of facing the same kind of challenges or handicaps.

The fact is that the total exports in the last financial year could not touch the target of $17 billion while President Musharraf was confident of the exports touching the figure of $18 billion, in spite of the large trade deficit of $11 billion. Nevertheless the exports of rice and leather products exceeded one billion dollars each for the first time in our export history and the engineering industry did far better than before. But while the rice in total exports in the first 11 months was 18 per cent, it was actually 23 per cent in the first six months of the year and nine per cent in the next five months.

That means urgent remedial measures are needed to boost exports and diversify them. Such urgency is all the more imperative in view of the vast expansion and modernisation of the textile industry in India, China and Bangladesh. While Pakistan’s exports of textiles a year is worth $9 billion, India’s is $14.5 billion, China’s $11 billion and Bangladesh’s is $6.60 billion. But all of these competitors have drawn up plans to expand their textiles industry in a big way in the next five years. Bangladesh has fixed a target of $14.5 billion, while India’s target is $50 billion a year and China’s is $220 billion.

And Pakistan’s target is $14 billion. It is in this context that the prime minister has asked the planning commission to revise the target of exports overall from 13 per cent of the GDP to 15 per cent which may not be too difficult to achieve.

And that means tremendous effort to expand and update the industry, diversify the products and their target markets. And that presupposes large investment of additional capital and equipment. Above all the sustained emphasis has to be on the value-added products instead of feeling too happy that the export of bed sheets and towels last year had fetched $4 billion. The value-added garment sector has to form a large part for the export sector as our exports tend to exceed the cotton we produce.

In the garment sector we are in competition with Bangladesh, which does not produce any cotton and we struggling to produce pest-free and dust free cotton.

Instead of facing the problems of the present and the future bravely and finding solutions, the first textile minister of the country Mushtaq Ali Cheema wants to resign as he has not been able to convince the government to meet the textile industry’s legitimate needs. He is himself a textile millowner from Faisalabad and popular among his fellow mill owners. He wants to meet their legitimate demands, but as he could not, despite his best efforts, he prefers to quit.

But an analytical report on the subsidies hitherto enjoyed by the industry shows that from the years of the bonus voucher in the 1960s all the subsidies given to the textile sector have ended up in lowering the export prices than improving the quality of the products and business practices. The government wants the industry to improve the quality of its products and diversify its products and adopt more efficient business practices. It also wants fewer complains from the importers of Pakistani goods abroad.

The industry had earlier said it had invested $5 billion on its expansion and needs to invest another $5 billion. So it wanted Rs50 billion relief and varied concessions as an incentive. But now it says it needs to invest $7.5 billion within next four years period and the millowners’ tax relief, subsidised bank loans and a package of concessions and facilities to enable them to invest so much. By making such an investment, they hope to raise Pakistan’s textiles exports to $14 billion a year and provide direct and indirect employment to 6.2 million people.

The prime minister says the government is trying to help the private sector in many ways. It is seeking preferential trade agreements and free trade area agreements with many countries including Malaysia and Singapore. And since negotiating an FTA is a long process, the government is seeking early harvest agreements so that they could trade on the agreed items earlier. It is also in the process of finalizing the reconstruction opportunity zones wherein the goods produced will have access to the US market on a preferential basis. The prime minister also seeks vast scope for exports of agricultural products.

The $14 billion is a great textile export target with prospects of direct and indirect employment to 6.2 million people, but it would take a great deal of collective effort to achieve that and obtain the promised results.

The textile committee’s report says the industry could have made remarkable progress in recent years as the inflation rate has remained low, the interest rates were affordable and other economic factors were supportive, but now the inflation rate is on the rise, the bank interest rates are spiralling to new heights, the utility costs are high and the labour costs are higher as compared with the countries with whom Pakistan is competing.

The high wages may not be in terms of rupees but in terms of low productivity. Hence the demand for omnibus concessions including reduction in the cost of energy and the overall cost of production. The textile industry had been doing too little of market research, relies more on the PR and the dinners and lunches it gives and awards export trophies to the businessmen in very large numbers. They have shown no interest in having foreign consultants, although the government has offered to share the cost.

The reformulated demands of the industry now include a cut in interest rates including lower export refinance rates, subsidy on gas rate and finally a devaluation of the rupee. The rupee is, in fact, already devalued. The Indian rupee now goes for 46.4 a dollar compared to 60-61 Pakistani rupees for a dollar. Further devaluation of the rupee will make all imports more costly beginning with oil which is now selling above 70 dollars a barrel and threatening to rise further. That will aggravate the inflation, including enhancing the price of oil manufactures using imported raw materials. And if instead of floating the rupee, the government resorts to formal devaluation, there will be time and again demand for further devaluation.

If gas for the textile industry is to be subsidised to bring it close to the Bangladesh level, other industries would clamour for the same concessions. If as the rupee is devalued, the gas price will rise almost automatically and that too will be passed on to the consumers as we have an agreement to pay international price for the gas and oil found by foreign companies in Pakistan.

It appears the government is not contemplating to accede to the many demands of the textile industry. But a meeting will be held soon between the governor of the State Bank and the textile mill owners which may reduce the export refinance rate by one percent to 8 per cent. But the millowners will not be satisfied with that margin of concession, not even the textile minister will be satisfied. So the prime minister is well advised to ask the planning commission to look at the problems of the textile industry as a whole and the competitive advantages of their competitors in India, Bangladesh and China.

The textile industry in Pakistan should be based on a stronger foundation as a world class industry and rely more on research than on PR. A great deal of importance has to be given to exporting the value-added garments instead of attaching overwhelming importance to exporting bedsheets and towels. Far more has to be earned through the high-priced garments which can provide employment to an increasing number of women and also opportunities to them to use their rich talent.

And the concessions given should be utilised to improve the products and diversify the exports both in terms of items and markets, instead of enlarging the profits.