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Shanghai dreams

November 17, 2018

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irfan.husain@gmail.com
irfan.husain@gmail.com

IT would seem that, despite appearances, Imran Khan has a finely honed sense of irony. Who knew?

There was our prime minister, addressing the great and the good at the China International Import Expo in Shanghai a couple of weeks ago. There, he touted Pakistan as a potential ‘industrial hub’ whose population included 100 million below the age of 35. He did not mention that around 25m of these include children who do not go to school.

The daily that reported the event also carried a front-page account of the fallout from the TLP’s violent three-day riots across Pakistan. To their credit, Khan’s audience concealed their mirth with typical Chinese politeness.

Khan’s audience concealed their mirth with typical Chinese politeness.

The point is that industrial hubs generally don’t have rampaging extremists urging followers to murder judges, and for soldiers to mutiny against their chief. Nor do they have governments that sign agreements with these elements instead of arresting and trying them.

So before the PTI government can attract foreign investors, it will have to fix the security environment. Easier said than done. But although Imran Khan did not create the problem, he has done little to address it. His ambiguity over extremism has tied his hands when it comes to the need for tough action.

It is true that a market of some 220m people will pull in some intrepid investors. While a number of big multinationals have been operating in Pakistan for years, attracting new players requires certain tough policies, none of which are apparently in the pipeline.

For starters, a foreign investor looks for an educated and healthy workforce. Next comes a level playing field: if the competition can get an edge through contacts and bribes, Westerners are at a disadvantage due to anti-corruption legislation passed in many developed countries.

A judicial system that works equally for all is another prerequisite. We remember all too well the fate of those trying to develop the Reko Diq mines in Balochistan, and buy Pakistan Steel Mills. By intervening in areas he was clueless about, retired chief justice of Pakistan Iftikhar Chaudhry sent the signal that foreigners invested in Pakistan at their own peril.

The current chief justice wants to impose a one-rupee levy per litre on water extracted by mineral water companies. This would drive up prices in a country lacking clean drinking water.

The list goes on. As I said, the PTI government is not responsible for these problems — for example, no government can prevent the excessive use of suo motu powers. But it does have to get its act together now to begin addressing them.

Surely the government can take urgent steps to implement the National Action Plan that was approved by all major stakeholders, including the army and the religious parties. This plan aimed to reduce the bilious religiosity that currently makes Pakistan such an intolerant country. Nawaz Sharif did little to act on any aspect of the plan, but we hope that Imran Khan’s ‘naya Pakistan’ will see a return to less hate-filled times.

Asad Umar, the finance minister, has talked about attracting foreign investment in export-oriented industries. The problem here is that we would be competing with a number of countries in the region that have a head start. From Vietnam to Bangladesh, everybody is scrambling to export everything they can.

A market India has exploited so successfully is computer software. Taking advantage of its large number of English-speaking IT engineers, it has developed a multibillion-dollar software industry. In the process, it has attracted many major players who have set up research and development centres.

Sadly, our educational system has nothing to match the Indian Institutes of Technology, established in the 1950s, that have become the drivers of the country’s software revolution. Perhaps this is an area the government should explore, instead of selling cars and buffaloes, to shore up our creaking finances.

Another area that is within the government’s powers is the uniformity and predictability of policies. Recently, textile mill owners in the Karachi region were informed that they would get no gas from Dec 1, 2018, to Feb 28, 2019. They would thus have to make their own arrangements to run the power generators they depend on, given the erratic electricity supplies from the national grid.

No foreign buyer would wait three months to get his contracted shipments, and would just go to some other country to meet his requirements. The Pakistani textile exporter, who had spent years developing a foreign market, would watch his hard work go down the drain.

Fortunately, we now hear the government has exempted export-oriented mills from this three-month restriction.

I am not suggesting that transforming Pakistan into an industrial hub is impossible. However, it will take political will, a national consensus and tough measures to ensure security. Do we have what it takes?

irfan.husain@gmail.com

Published in Dawn, November 17th, 2018

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