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DAWN - Editorial; April 12, 2007

April 12, 2007

Ahead with the IPI

A MAJOR hurdle seems to have been crossed on the Iran-Pakistan-India gas pipeline project when on Tuesday the Economic Coordination Committee of the cabinet took two major decisions: it approved the gas-sharing formula with India and agreed on price mechanism on the Iranian gas. The details of the price mechanism have not been made public because Tehran and New Delhi have yet to give their views on it. But gas sharing has been approved. According to the formula, Pakistan and India will share it equally when Iran starts delivering 2.1 billion cubic feet of gas a day (BCFD) in the first phase. In the second phase, the total gas delivery will go up to 5.3 BCFD which Pakistan and India will share 2.1 and 3.2 BCFD respectively. Both countries need more gas for their expanding industrial, commercial and domestic needs, but the current levels of their domestic gas production are unlikely to meet their future needs. Pakistan especially requires more gas for producing electricity to tide over the acute power shortage. At the moment, there is a gap of 1,300MW between demand and supply. The situation is likely to worsen unless Pakistan augments its power-generation capacity.

The IPI project has some political implications, not necessarily negative. The negative part is the US pressure on Pakistan and India not to proceed with the deal. The adversarial relationship between Washington and Tehran is nearly three decades old, and Iran’s current nuclear programme has seriously aggravated it. Pakistan is mindful of this awkwardness but believes that the US-Iran differences should not be allowed to come in the way of Islamabad’s relations with either. Since 9/11, Islamabad and Washington have had what indeed is a multi-dimensional relationship, with well-defined areas of mutually beneficial cooperation. The two are allies in the war on terror, and the US has helped Pakistan economically by ensuring market access to Pakistani exports, writing off loans worth more than a billion dollars and helping it in education, health and other social sector projects. However, the US should not expect Pakistan to look at its relations with the rest of the world through the American prism. Just as Washington does not see eye to eye with Islamabad on Kashmir, Pakistan also has serious reservations about America’s policy on Iraq and Palestine. The two sides, however, have not allowed these differences to stand in the way of what at present is indeed a very fruitful relationship, with Pakistan enjoying the status of a major non-Nato ally.

Pakistan and Iran are not only neighbours, they have also close cultural ties that go into deep history. Unfortunately, their economic relationship is nowhere near its potential. The IPI is only an economic project that will help the two countries – Pakistan more – without in anyway having a negative impact on their relationship with any other country. The project will take Iranian gas across Pakistan to India, and that will only help strengthen the on-going normalisation process, which America itself views with favour. The other issue is the safety of the pipeline. Since it is proposed to be laid across Balochistan, the government must ensure against possible acts of sabotage by some nationalist elements or groups. It is time the government sought a political solution to the Balochistan problem by talking to the Baloch leaders with a view to addressing their grievances.

Forged degrees

IT IS shocking to learn that a number of ex-servicemen and bankers were involved in a counterfeiting scam that has been unearthed by the National Accountability Bureau. It has been common knowledge for quite some time that money, degrees, passports, visas and other valuable documents are being forged for sale. But it was not generally realised that the roots of this evil have spread far and wide causing immense harm to the country. NAB has done a good job in tracking down the criminals who deserve exemplary punishment so that others may know that such crimes won’t go unpunished. The faking of currency notes, stamp paper, saving certificates, etc is a major offense that causes enormous monetary losses to the national exchequer. But the most abhorrent of all – not so much for its financial damage as for its long-term impact on human resources – is the forging of degrees and copying of examination sheets. The fact is that forged degrees are used by students to bypass the academic system and pose themselves as qualified person without being really so. This deception is used to obtain employment and other socio-economic benefits that education brings. In other words, this racket has caused the quality of work force to decline. Falling standards of education and poor merit assessments are problems we have to contend with. Additionally there are the impostors who acquire a forged degree and end up as high executives, professors and even ministers. These uneducated ones are a drag on society besides bringing a bad name to the country whose university degrees are not accepted at face value abroad and have to be verified.

While one expects NAB to go after all the ring leaders and their cohorts, the universities too are expected to play a role in curbing this deadly evil. It is obvious that without the connivance of some key members of the universities’ examination departments the racket could not have flourished. It is the responsibility of the vice-chancellors to clean their own stables as well. The late Dr Zafar Zaidi, the vice-chancellor of Karachi University, was getting the examination records computerised to ensure greater integrity. One hopes that all the universities will strive for a clean-up of their examination departments.

Slaughter at Lahore zoo

THERE is no point in suspending Lahore zoo’s gatekeeper for Monday’s incident in which two stray dogs got into a cage and killed 28 peacocks. It is unfair to expect a lone person to be responsible for watching over such a large area. The administration must bear the responsibility of this senseless tragedy instead of finding scapegoats. The customary probe has been ordered but as can be expected, once the initial shock subsides, it will be business as usual again. There is much to learn from Monday’s tragedy, namely that the welfare of the animals must be the zoo’s top priority. Sadly, that has not been the case so far. It is not just this incident that presents the zoo management’s reputation as an irresponsible and insensitive one. Last month, a tiger became the fourth to die in less than a year at the zoo. While the animal died of a fatal parasitic disease for which the zoo authorities cannot be held responsible, the fact that there is only one vet on the premises and no laboratory yet which shows that animal care is seriously lacking. This lax attitude is deplorable and must be rectified soon.

It is said that a laboratory is going to soon be set up at the zoo. This must be expedited and all animals tested for various diseases. The vacancies for veterinarians too must be filled at the earliest so that there are doctors on hand to treat sick animals. What should also be done on an urgent basis is to secure the zoo’s premises so that no stray animal can enter it. More men can also be deployed to maintain security and cleanliness. This will ensure that no untoward incident happens again in which precious animal lives are lost.

Creating more economic reform bodies

By Sultan Ahmed


THERE appears to be no end to the birth of new administrative units or reform outfits in the federal government. It is a result of merrier attitude that prevails there while enlarging the size of the offices. The new units are usually large with high sounding objectives in a new jargon, are headed by senior officials and are costly outfits.

And as new organisations come up, old institutions whose functions they try to take over or expand are not wound up soon. At best they have a lingering death and tend to waste a great deal more of public funds. And no one is evidently evaluating the performance of the new units at fixed intervals, although that is stated to be done now.

The largest organisation to be born this month is the Economic Reform Unit (ERU) which will focus on reforming the private sector, removing its roadblocks and enabling it to follow and promote the best practices in the world. And it is to enable the country to benefit amply from the public-private partnerships make rapid headway.

The ERU is to be launched this month at a meeting convened by Prime Minister Shaukat Aziz. It will be under the ministry of finance and its director-general who will be an eminent person will report directly to the finance secretary. Will that become another institution attached to the ministry of finance and under a usually over-burdened finance secretary. But before defining the scope of the ERU, what it will seek to achieve should be clearly and more specifically defined with the approval of the leading players in the private sector.

In fact it will be far better if the birth of the ERU and its final shape follows a large conference of industrialists and businessmen as well as public sector representatives, who should first of all identify the shackles that hold back the private sector and obtains less than the largest investment. What matters are not only the laws, rules and regulations that hold back the private sector and keep the informal sector very large and greatly unaccountable to the government or the consumers, but also many unhealthy practices in the private sector. The government or the private sector officials alone cannot be blamed for all the drawbacks and the handicaps of the private sector. The common deviant practices of the private sector also retard its growth.

Good governance which is essential for the success of the public and the private sectors is possible in an atmosphere of mutual trust and respect for each other. Mutual distrust and disregard for each other do not help the growth of the private sector which has to acknowledge its responsibility to society and its obligation to the government and should not think in narrow parochial or personal terms.

If for example, the private sector believes in maximum profit and minimum tax payments as is common in Pakistan it is a role which is unacceptable to the government or the country. Instead, it should reform itself and strive for larger profits through increasingly larger turnover and pay its taxes in full to the state.

And it is the obligation of the state to keep taxes moderate and tax collection realistic and the collection methods employed helpful to the tax payers. The higher objectives of the business are what the businessmen should be seeking and not simple pursuit of the primitive traders. There are some much civilised businessmen: others have to follow them if the ERU is to pay proper dividends as well as to the country.

The government says the first generation reforms have produced excellent economic results and the second generation reforms will sustain though reforms and excel the growth rate to eight per cent and over, but the second generation reforms have not been presented in a collected form with its specifics listed. Will it be the task of the ERU to finalise those reforms in the private sector and make it more productive and the bigger economic player?

Now we enter the area of duplication at the cabinet level. How many reformers or reforming organisations are we going to have? The long dormant or neglected Planning Commission has been brought back to life along with the revival of long-term planning. And it has come up with the vision 2030 which is to make the country the 23rd economy in the world from the 39th at present. And the PC with Dr. Akram Sheikh has been given a larger role and is consulted by the prime minister frequently. The Pakistan Institute of Development Economics has come back to life under Nadeemul Haque and has a large volume of research to help the official reformers. It is a useful consulting body with a large body of research in the economic and social sectors and it has now come out with a useful PIED business barometer to reflect the business climate in the country. And in Karachi the non-official Social Policy and Development Centre under Dr. Khalida Ghous now has conducted excellent studies in the social and economic sectors keeping in view the needs of the people. Unlike official institutions, its feet are very much on the ground.

Instead of making use of such studies and the research work of the State Bank of Pakistan, the government is creating new bodies at a high cost to suggest and implement economic reforms in the private sector. This new institution can create real protocol problems unless the prime minister takes a very personal interest in its recommendations.

The creation of this unit owes to the ministry of textiles which has not only a textile owner from Faisalabad as its minister, it has also a minister of state to share the light burden of the minister with small authority.

Added to the ministry of industries and production, under Mr. Jehangir Tareen is the label of special initiatives. All ministries are expected to take special initiatives but Mr. Tareen insisted on the mention of the special initiatives and we have not seen anything very special about the initiatives he has so far taken.

In much of the modern world, there is a ministry of trade and industry like Japan’s MITTI, but we have two separate ministries for trade and industry and there is a third ministry of textiles. We have another minister, Zahid Hamid, for investment promotion and privatisation.

Most of these ministers don’t seem to be pulling together. As a result a report on the state of the commerce which covers largely the private sector for the first time has been on the table of commerce minister Humayun Akhtar for the last two years awaiting policy decisions. All these ministers are expected to suggest reforms in their areas and carry them out with the approval of the cabinet. As a result, one reform body follows another with high sounding objectives.

In addition to the ministries, the World Bank, the Asian Development Bank, the International Finance Corporation and the UN Development Programme have been suggesting a plethora of reforms and have been funding some of them and have offered to provide far more funds if we accept and implement those reforms.

The ERU following the appointment of its director-general will undertake a study of the business climate, opt for international gathering, study infrastructure inadequacies and make a study of the energy requirements. Several reports on such inadequacies are already available with the government and the ERU can make use of them.

The ERU will develop the first comprehensive and coordinated private sector development strategy. The Unit will have two related mandates. One, to improve the regulatory environment and remove the impediment to private sector growth. Two, to remove all other impediments in the private sector development and promote the best international practices and establish a transparent and open regulatory process.

It will also interact with the international aid agencies and seek their help to realise its objectives. It will be better for the private sector to reform itself as much as it can before the government decides to reshape that sector. The trade organisations ordinance should be accepted by the chambers of commerce with the necessary amendments. If the private sector has to play a larger role as the public sector has greatly withdrawn from industrial field, it should become strong, vibrant and socially responsible.

Joseph Bazalgette

SUCH was the genius of Sir Joseph Bazalgette, the Victorian engineer, that the sewerage system he designed and built for London in the 1850s has endured almost untouched. Only now is it to be significantly enhanced by a 20-mile overflow tunnel to ease river pollution caused by heavy rain.

Sir Joseph thought of engineering as an instrument of public welfare, a way of improving the wellbeing of man, and his sewerage system is generally regarded as making the greatest single contribution of its time to Londoners' health.

It was all the more remarkable that when he first proposed it, understanding of the link between polluted drinking water and the cholera epidemics that ravaged London in the 1840s and 50s was only in its infancy.

Bazalgette had to find a way of moving the city's effluent far enough down the Thames for it to be taken out to sea by the tide. The existing system simply fed untreated sewage into the river at low tide (the river backed up the sewers at high water), leaving it malodorously swilling back and forth with the current.

— The Guardian, London



© DAWN Group of Newspapers, 2007