Investment prospects

It heartening to know that in terms of investment climate indicators Pakistan has been found to be a better place than the rest of South Asia. According to a recent survey conducted by the World Bank, the red tape in Pakistan is less time-consuming than in other South Asian countries as it takes only 24 days to register a firm in Pakistan to Bangladesh's 35 days, Sri Lanka's 50 and India's 89 days.

And in losses from electricity outages Pakistan's average of 6.5 per cent is much better than India's 10 per cent. However, it is not with South Asian countries alone that Pakistan is competing for foreign investment, which is being courted by the entire world including the most developed countries and the world's largest market-China.

So, Pakistan needs to improve still further even those indicators in which it has outshone the other South Asian countries and bring at least at par those in which it is behind its regional neighbours.

We could cut the time of 24 days for registering a firm to at least one week if the devolution process that is being carried out in the political arena is replicated in the economic field as well with automation and information technology facilitating decision-making. Also, the losses due to electricity outages could be further reduced if the transmission system is modernized and distribution privatized.

The summary of the World Bank survey mentions corruption as the biggest constraint on rapid and larger inflows of foreign investment in South Asia without, however, disclosing the comparative ranking of each of the regional countries in this respect.

So, it is safe to assume that we are not far behind Bangladesh where bribes amount to three per cent of total sales. Therefore, there is still a lot to be done on this front in Pakistan.

The National Accountability Bureau, with its intrusive operations in the beginning, had brought the economy to a virtual halt and now it is perceived to have become a political instrument in the hands of the ruling elite and therefore much too selective to be of any use as an instrument to curb corruption. The government needs to stop misusing this anti-corruption organization if it is seriously interested in attracting foreign investment.

And last but not the least, we have to do something very quickly, and with some imagination and thought, to improve the law and order situation in the country. This can help correct the country's image with the rest of the world which sees it as a violent and lawless country.

According to the survey, 63 per cent of the firms said that they were concerned about insecurity and property rights in Pakistan. These concerns spring from a serious lack of rule of law in the country.

Unlike governments which like or dislike a country from the perspective of their national interest, the foreign investor judges a country from the point of view of how safe his money would be and how much profit margin he would be able to make within the law of the land.

So, unless we establish the rule of law and make it stable, foreign investment is not likely to rise beyond a certain point, no matter how close we are to the governments of rich countries.

Slashing LPG prices

The increase in the price of liquefied petroleum gas (LPG) by over 62 per cent in the last nine months is cause for concern. LPG is used as fuel in public transport, including rickshaws, as well as in households where piped gas is unavailable.

Over 500,000 households depend on LPG for their heating and cooking needs and the use of this gas is encouraged under a policy of forest preservation. Both natural gas and LPG account for 39 per cent of the country's energy needs and a rise in LPG prices has an adverse effect on a substantial part of the population.

Owing to erratic supply and rising international oil prices, LPG prices rose from Rs 29 per kilogram in July to over Rs 44 per kilogram in September. This unprecedented rise forced distributors to go on strike.

On the intervention of the prime minister, it was decided that LPG prices would be reduced at the production stage and this benefit would be passed on to the customer from this week.

However, the prices have not come down as expected. While some shops in major cities are selling LPG at Rs 39 per kilogram, prices are unchanged in rural areas where consumption is greater.

Notice of this discrepancy must be taken and those producers who are not reducing their rates as agreed should be taken to task. Ideally, LPG should be priced at Rs 30 per kilogram, as was the case a few months back so that LPG rates are once again competitive with those of other fuels.

At the same time, more attention should be paid to increasing domestic production of LPG, which currently stands at 1,000 tons per day. Clearly this is inadequate in the face of the rising demand.

Keeping in mind the record rise in international fuel prices (it crossed $50 per barrel last Monday), indigenous fuel has to be tapped on a priority basis. The government may consider deregulating LPG prices as has been done for petroleum products. That will give an incentive to local producers to invest in LPG production on a priority basis, assuring greater supplies in the years to come.

Forgotten POWs

In a letter in this newspaper, the daughter of an Indian army officer says that she has been trying to trace her father's whereabouts ever since he went missing during the 1971 war between Pakistan and India.

This comes after the surprise release by Pakistan in early August of two Indian soldiers taken as POWs during the Kargil conflict and of a Pakistani soldier by the Indian side. What is interesting to note is that until then both governments had strongly denied holding any POWs.

Mohammad Arif, one of the two Indian soldiers repatriated, returned home to find that his wife, thinking him to be dead (the Indian army had declared both men deserters), had married again. The father of the other POW died in his son's absence while his wife, also believing him to be dead, went away to her parents' place.

The letter in question claims that at least 54 Indian POWs are still languishing in jails in Pakistan since 1971, and there might be a possibility that some could be in prison on the Indian side too.

Islamabad's official position is that it holds no Indian POWs, a refrain echoed by New Delhi. However, the recent swap in August indicates that such official positions do not tell the whole story.

It could be that in the case of a conflict as old as 1971, and with a new atmosphere of cordiality and reconciliation prevailing between the two countries, both may not want to touch a sensitive issue by publicly admitting the presence of POWs.

But it is precisely for that reason that they should be willing to broach the subject without the risk of any misunderstanding. The case is indeed strong for the release of any POW who may still be in captivity on either side. Doing so will help provide some kind of closure and solace for their families, as in the case of the daughter who wrote the letter.