KARACHI: Early indicators suggest that gains from the GSP+ facility to Pakistan may surpass the initial estimates of material benefit if the stakeholders could focus on making the most of this window of opportunity.

“I believe $1 billion increment in export to Europe annually is a conservative projection. If the government facilitates the business by removing key irritants, there is scope enough to double the exports to Europe in the next three GSP+ years,” a leading business tycoon said.

The intended change, however, in the production processes, workers’ conditions and working systems will be a long and uncertain process before it takes roots in a country that is at war with itself.

“Currently society is preoccupied with issues of survival and is confused over the direction it wishes to move in,” said an analyst.

“What audit? We are already a leading exporter to Europe and we know how to go about it. Tell the government to ensure security and provide energy; leave the rest to us. We enjoy good reputation and getting orders is not difficult. We have professionals who can take care of the required paper work; just ask the government to facilitate us,” stressed a textile baron.

The situation is compounded by the crisis of governance in a perennially weak institutional environment that breeds and thrives on corruption.

“Exports to EU in January under the new scheme stood at $106 million against $96 million in the high season December. We are entrusted with the task of giving certificate of origin, a mandatory requirement for exporters who wish to avail of the scheme. We are not responsible for anything else,” an irate senior officer at the Trade Development Authority of Pakistan (TDAP) said when asked to comment on the progress on the implementation of GSP+ conditions.

The external pressure for improvement may be necessary, but it is not sufficient. In the absence of internal pressure and monitoring, the private sector in Pakistan, like elsewhere, finds ways to game the system to its advantage.

“The compliance does not come for free; it involves high overhead cost. It will render our produce unviable if we try to implement the said conventions in our factories. Yes, all exporters maintain at least one unit that meet the standards, but 80 per cent of production meant for export takes place elsewhere. Auditors and visitors from abroad are treated like royals and given conducted tours to the facility maintained for the purpose,” an executive at a family-owned business house told in confidence.

Multinational companies are obligated to maintain standards by their principals. “They deliver on standards and honour laws of the land like a responsible corporate citizen of a country,” said a member of the board of Overseas Investors Chamber of Commerce and Industry.

There are exceptions in the local corporate sector, but they can be counted on fingers. “We are continuously re-investing in state-of-the-art technologies, systems, people and facilities to contribute to the health of the economy and export-earning potential of the country,” an executive of a young drug company, which is also one of the largest exporters, said.

“We do not just meet but often times exceed world standards,” he claimed.

The government is further de-capacitated by infighting among overlapping ministries and departments driven by their petty interests. Post 18th Amendment the onus is on the provinces to manage the social sector that includes labour affairs. Four years since its passage in 2010 they are said to be in the transition phase trying to build capacity to handle the task.

“The federal government has retained Commerce and Logistics and can intervene if there is a need to,” a provincial officer in the Sindh Labour Department said while evading a question on factory inspection by trying to shift focus on the failings of the federal government.

A survey in provinces in this regard confirms that despite all flaws, Sindh is leading all other provinces in terms of a comparatively better legal framework and numbers of standard compliant units in a province.

It is little wonder that no official report on the current status with regard to situation in Pakistan with reference to ILO/UN conventions is available anywhere in the country.

Private-sector representative bodies absolve themselves of any responsibility in this regard and find it enough to engage with the government over concerns of their members related to energy deficit, security situation, credit costs and other issues of immediate interest.

“It is very daring to do business in this country. The nation should acknowledge our contribution instead of painting us in dark colours,” a business leader said. “If you ask me, we follow the laws of the land better than any other segment in the country,” he asserted, adding: “Had it not been so, we would have been dragged in courts.”

Higher-ups at the Employers Federation of Pakistan admitted that the situation might not be ideal, but the body has been educating its members on business values related to the conventions concerned.

“We can do advocacy and we are doing that. The Federation plans to prepare a report on the state of affairs in this regard shortly.

The CEO of Mishal Pakistan, which produces the country report on competitiveness, was not able to add value to what is already known. “We have not worked so far in this direction, but, yes, it is important to know the level of implementation of the relevant conventions in Pakistan and we will see if we can launch a project in this regard,” said one of its officials.

Other socio-political entities, including political parties and trade union bodies, knew little and were more interested in airing generalised opinion on everything under the sun rather than throwing anything concrete.

“The change demands conducive conditions lacking in the country. Nowhere has persuasion worked. Apart from awareness and public pressure, effective monitoring and implementation machinery is required to enforce relevant laws,” an expert concluded the debate while hinting at the need to update the legal framework to implement the conventions in question.