KARACHI, Sept 2: There is a greater possibility that the advantages which may be gained by Pakistan along with other developing countries from the WTO ministerial conference at Cancun, Mexico are diluted by the IMF and World Bank conditionalities, which are presently being met.

Under IMF conditionalities the country has lowered its applied tariff to 25 per cent and was unable to give any subsidy on its exports, particularly on its farm products.

Consequently, a question arises that if the developing countries, who are having a tough fight with the developed countries over the removal of export subsidy, domestic support and lowering of agriculture tariffs, win it over at Cancun, what Pakistan will gain out of it?

The most logical reply to it will be that Pakistan will further lose its present markets for its agriculture produces, particularly rice to its competitors from developing countries like Thailand, Vietnam, Bangladesh, India and Indonesia.

This means that with IMF conditionalities, Pakistan will have to remain committed, and will not be able to give subsidy to its exports of agriculture products, whereas other developing countries with no bondage from any world donor agency will take advantage and capture markets by giving subsidy to their exports.

Presently, the G-8 countries are spending over $360 billion a year or $1 billion per day on farm subsidy which was badly distorting the world market where developing countries could not compete.

The minister for finance Shaukat Aziz at different public forums had been claiming that by the year 2004, the country would be free from the IMF clutches as there would be no more conditionalities. But simultaneously the minister had been saying for the last three to four years that economic reforms undertaken by him were very good and should continue.

Now the question is had the IMF tailored economic reforms been good and best suited to the country’s economy, why Shaukat Aziz kept telling the people that the country would be free from the IMF conditionalities next year.

Similarly, there is a move from both the sides — developed and developing countries — for lowering tariffs. But the question is if an understanding is reached at Cancun conference and even a time space, as being suggested, was allowed to developing countries to lower their tariffs what mechanism or preparation have been made by Pakistan to protect domestic industry.

Furthermore, if the government decides to follow invoice based valuation of imported goods as per WTO conditions, there would be massive under invoicing. Coupled with lower tariff rates the domestic industry would be totally exposed and even crumbled down.

In order to counter such a situation the anti-dumping laws act could be used to protect the domestic industry. But it is yet to be seen that these laws have been effectively used because so far only one case had been decided by the National Tariff Commission (NTC), which was related to tin-plats used for food packing.

There is a general perception amongst the business community that the NTC avoids to take up issues related to anti-dumping, particularly related to a neighbouring country whose goods are being dumped in the domestic market.

When Minister for Commerce Humayun Akhtar Khan had been telling the business community that the Cancun ministerial conference being held from September 10-14, 2003, is a review meeting then why a big official team as well as private sector representatives are participating in this event.

According to official list a 30-member Pakistan team, equally divided into officials and private sector representatives and headed by the commerce minister will leave for Cancun, Mexico by Sept 6.

Again a big question arises that have the private sector representatives leaving for Cancun held on the spot consultation and who have authorized them to speak on behalf of stakeholders? Furthermore, have they taken mandate from their member bodies?

A question is also being raised against the formation of official team because this also convey a message to the participants for the conference, particularly those with whom there is a clash of interest.

Above all, even if our team is well prepared for the Cancun, and hopefully it also makes achievements but what guarantee is there that these successes are not diluted and frustrated by the IMF and WB conditionalities?

The above question is more relevant because each WTO member holds one vote, whereas in IMF and WB the members carry their influence depending on the financial contribution of a country to these world donor agencies.