Fake smuggled goods, flour and finance

Updated 26 Oct 2020

Email

A child sells cigarettes to support his family in a push-cart at a market 
in Quetta. — File photo
A child sells cigarettes to support his family in a push-cart at a market in Quetta. — File photo

“It tastes awesome,” said a Karachi-based adventure enthusiast who raves about the huge ruby-red Kandahari anaar (pomegranate) he had in Quetta.

“The ones I have had here have been fake. I have only found the real deal in Quetta”.

Quetta’s economy is a hodgepodge of different sectors, from the famed pomegranates to smuggled goods. Trading, flour mills, steels mills, mining, and ghee mills are all part of its landscape along with small and medium enterprises that make products such as furniture and local brands of colours.

While the memories of the big brown-patterned pomegranate are sweet, the stories of the famed Nato (North Atlantic Treaty Organisation) market were a tad anti-climatic for the adventurist. “It is all Chinese replicas,” he says when asked about the Nato market which is known to sell smuggled/stolen Nato supplies such as weapon spare parts, helmets, boots, bags, torches, screwdrivers and other military paraphernalia.

‘Not even two people from Balochistan have been able to avail the government’s Rozgar scheme’

“While all the shopkeepers claim it is Nato stuff, you can tell it isn’t. For starters, the quality is really shoddy. A bag will not last you three months. Secondly, Nato supplies are packaged in a certain way to protect them from the elements. They also have alpha-numeric coding with which you can check the item through the directories. Anyone who has seen the real supplies for Nato (and I own a few pieces) can tell its fake.

“However, even at its peak, Nato supplies were not easy to find. You need to know the right people and have trustworthy contacts before they fetched Nato goods from their backrooms or warehouses,” he explains. Given the price points of the Chinese replicas being passed off as Nato supplies, he suspects them to be smuggled or stolen as well.

Badruddin Kakar, former senior vice president of Quetta Chamber of Commerce acknowledges that Nato supplies were sold in the market when the flow was high but now the goods are mostly of Chinese origin.

As Chairman of the Pakistan Flour Mills Association, the wheat crisis is his pressing concern. “Previously, one-third of Pakistan’s excess wheat used to be exported to Afghanistan,” he explains adding there are 47 flour mills in Balochistan of which about 21 are in Quetta. “But with the crisis, ultimately its Balochistan that is being affected because it is a wheat deficient province,” he says.

In a May 2020 World Bank study on Economic Policy for Export Competitiveness focusing on information technology, Quetta was identified as one of the cities where availability of office space and professionals is a significant issue. About 93 per cent of the firms surveyed identified the electricity infrastructure as an important obstacle to their operations and 57pc listed access to finance as a problem.

“Not even two people from Balochistan have been able to avail the government’s Rozgar scheme,” said Mr Kakar.

“Commercial banks make a case for the State Bank but without their involvement, it is impossible to access the central bank’s facility. Banks keep us at an arm’s length and do not invest or lend to us, we are considered a ‘red-zone’. Lack of positives gives rise to negatives — and hence the practice of hundi and hawala.” Banks take funds for six to seven months and still refuse to extend finance, we have to make do with current account facilities, he laments.

Every third grade-school child in the country knows Balochistan is rich in mineral deposits. While coal, chromite and marble are excavated, the methods employed are still of blast mining which results in high wastage but there is no movement towards conventional mining. The full potential of copper in the province has yet to be explored.

The steel re-rolling mills are another sad tale involving a mafia behind the trade. Precedence has been given to the ship-breaking sector due to the mafia’s lobbying due to which the city’s steel mills are under pressure and find it hard to survive.

Much of Quetta’s economy is entwined with Iran through barter due to the lack of banking channels. Rice, mango and sesame seeds are exchanged for mostly petrochemicals and some seasonal goods such as tomatoes and onions recently. Quetta’s famed dried fruits such as pistachios and cashew nuts are also similarly imported from Iran.

According to the World Bank study, along with Peshawar and Islamabad, the youngest firms in the country are located in Quetta. Out of the 534 exporting firms that took part in the World Bank’s IT Firm’s Survey 2019, only three were from Quetta. Small set-ups, these firms had on average 10 employees and mostly had been exporting for less than five years.

Given the lack of finances, new technology and general incentives provided by the government, it is likely that Quetta will continue to be a potpourri of diverse sectors rather than forge a new path.

Published in Dawn, The Business and Finance Weekly, October 26th, 2020