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DAWN - Editorial; 29 November, 2004

Published Nov 29, 2004 12:00am

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Industrial strategy

A national industrial strategy, badly needed for a modernized, self-sustaining and competitive economy, is expected to be finalized by mid-January. Designed to speed up industrialization, the new policy will remove impediments in the way of growth of each sub-sector and inter-sectoral imbalances.

To improve social and physical infrastructure, public-private partnership would be encouraged. Sectors like IT, energy, construction, value-added textiles will enjoy priority.

A major policy thrust is aimed at boosting small and medium-size industries that provide sizeable employment. But somehow the engineering industry is not getting due importance despite the fast rising imports of machinery and equipment spurred by a rapidly expanding economy.

An updated industrial policy is needed to help sustain the current momentum of growth in the manufacturing sector. The industrial expansion has come from higher utilization of existing capacity and short-term investments.

The need is to remove snags affecting long-term investments for producing a diversified range of quality goods at globally competitive prices. Currently, the medium and high-content technology for manufacturing is extremely low at nine per cent as compared to 20 per cent in India and 45 per cent in China.

While the official move to set common facility centres may be of some assistance to SMEs which cannot afford expensive foreign technology, still more important is the upgrading of human skills along with extensive research and development to upgrade local technology.

In areas, where there is a domestic advantage, industries based on import substitution are vital to meet domestic demand and correct foreign trade imbalances.

The import list may be reviewed to identify the areas where indigenous production can save precious foreign exchange resources spent on imports of foodstuff worth one billion dollar and machinery group purchases valued at over $4.2 billion.

For the industrial goals to be realized, the government needs to bring all stakeholders on board. Pakistan has a more conducive business environment than its neighbours in some areas like time and money needed for business start-ups and relatively flexible labour laws. But businesses have to encounter 30 legal procedures to make commercial contracts enforceable. At a recent workshop on industrial strategy, many issues agitating investors were raised.

An inefficient transport system - roads, railways and port facilities - that delays delivery of goods is a nightmare for many in the matter of complying with export orders.

A plethora of monitoring agencies discourage investors. These include 27 labour laws that can be reduced to six according to a former federal minister. SMEs suffer from impediments like inadequate access to bank credit, skilled manpower, updated technology and marketing facilities.

The restructuring of Central Board of Revenue is a critical area as it could help expand the tax base and reduce incidence of taxation. Salutary Regulatory Order (SRO) culture denies even playing field to most economic agents.

These issues need to be tackled to accelerate industrialization within the framework of national strategic vision as advised by the Asian Development Bank. As the ADB says, the vision should encompass the interest of all stakeholders, including the private sector, the government, institutions, employees organizations and trade unions with a view to promoting industrial growth and competitiveness.

Although there are no simple answer to complex issues of industrialization, human resource development is of paramount importance as it affects all factors of production. In this context, skill development is a subject which cannot be left to the private sector alone.

Muslims and the West

President Pervez Musharraf's intent to raise the issues concerning Muslims around the world in his meetings with western leaders, particularly President George Bush, Prime Minister Tony Blair and President Jacque Chirac, on the current leg of his foreign tour is reassuring.

The US, Britain and France are among the big five occupying the permanent seats in the UN Security Council, and have immense clout in shaping world opinion and influencing socio-political attitudes globally.

In the post-September 11 world, the US single-handedly has more to do with the emerging global outlook vis-a-vis Muslims and issues related to the Muslim world. While the West has been doing a lot of fire-fighting in the wake of global terrorism, it is long-standing conflicts involving Muslims in Palestine, Kashmir, Cyprus, South-East Asia and elsewhere in the world that cry out for resolution.

That, coupled with the global drive to curb what is seen in the West as Islamist terrorism, has resulted in alienating ordinary Muslims even further. Imposition of unduly harsh restrictions and scrutiny of Muslims in the US and in Europe have heightened the feeling of resentment and anger that many believe is being imposed on them. The continued occupation of Iraq and the mess the US and Britain have created there have compounded the problem of alienation.

The US is largely responsible for much of what has changed for the worse for Muslims and for the rest of the world in the aftermath of 9/11. The feeling of xenophobia and suspicion of the other is mutually shared by the West and Muslims around the world.

To use General Musharraf's own words, the causes of terrorism need to analyzed and addressed by all concerned. A change of mindset is needed by Muslims as well as the West so that a meaningful dialogue aimed at creating a better understanding between the two can begin.

This should be done alongside fighting terrorism, for which the West desperately needs not only Muslim governments but also public opinion in Muslim countries on its side. Resolution of outstanding issues concerning Muslims from Morocco to the Philippines, and in pockets of the diaspora in the West, is critical in breaking the ice of mutual suspicion.

Polio target not in sight

The end of the year is nearly upon us but we still seem far from attaining our target of a polio-free Pakistan by 2005. No doubt that over the past 10 years the country has made considerable progress towards the eradication of this paralysing disease, and cases of polio are being reported far less frequently than before, thanks to a committed national campaign to administer the anti-polio vaccine to children and infants.

However, it is still too early to congratulate ourselves, especially as an alarming dimension of polio has come to light. According to one report, more than 85 per cent of children, infected by the polio virus in Sindh this year, had already been vaccinated against the disease, some of them as many as 10 times.

This has added to the logistical problems of maintaining the cold chain and reaching inaccessible parts of the country, where polio teams must convince sceptical, and sometimes openly hostile, parents and village elders of the need to inoculate their children.

With this development, several questions come to mind. Among them: is the vaccine losing its potency or are other ailments in children lowering its efficacy? While medical researchers look for answers, it is important for the health authorities to dwell on aspects of the campaign that need to be improved.

Team fatigue and reaching remote areas are not the only problems. The mismanagement of funds allocated for polio eradication has been cited as another reason holding back the campaign, while district nazims have also been blamed for their non-cooperation in this area.

Other areas of weakness must also be identified and the requisite studies carried out to achieve this. Only then can the health authorities see the current campaign in a clearer light and draw up a more effective plan aimed at ridding the country of the polio virus.

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