KARACHI, Nov 17: The key issue facing business after September 11 is how would the fast changing global scenario impact on the domestic market, investment and foreign trade.

And trade forums are now working hard to identify the risks and challenges of a clouded future through informal and formal discussions.

The two major developments— deepening global recession and war in Afghanistan— created an uncertain business environment. The conventional war appears to be petering out, minimizing its political fallout on Pakistan and its impact on the domestic economy.

Yet, how much the coalition partners would make up for short-term damage to the economy is not clear. It would become known when the total financial package is unfolded by IMF on December 5-6 followed by debt rescheduling, including some debt relief, by Paris Club on December 11.

An indication of things to come has been given by the World Bank vice-president for South Asia region, Ms Mieko Nishimizu. She has been quoted in a WB press release after meeting with President Pervez Musharraf that “it is not money that will drive Pakistan out of its economic doldrums of the past decade but sound macroeconomic and structural policies.”

Of course, bilateral assistance is expected to increase to provide balance of payments and budgetary support and in the shape of humanitarian assistance for Afghan refugees. A commitment of $600 million has been made by the United States, although the total expected package is of over $1billion. But the American commitment falls short of the expectation of the many members of the business community.

Cautious optimism is expressed on the issue of greater access to European and American markets specially for the textiles. The increase in textile quota and duty-free imports by the EU and also hopefully, by the US, would benefit the exporters provided orders are received and perceptions of buyers about uncertainties are cleared. In times of economic slump, foreign trade tends to shrink. Much would depend on the nature of recession in the US and Europe, whether it is of short or long duration.

While at this point of time, there is question mark on prospects of aid and trade, a consensus appears to have emerged that Pakistan would not see any major investment either by locals or foreigners at least in the short-term. Even before September 11 and the Afghan war (that turned Pakistan into a frontline state) investment had dropped to the lowest ebb.

A former president of the Karachi chamber of commerce and industry Yusuf Shirazi says IFIs and WTO were responsible for drying up investment and private foreign capital inflows.

The World Bank says industries that are not internationally competitive should be discouraged. He points out that textile industry cannot export without devaluation. In fact, devaluation subsidizes exports.

The IMF wants to keep the interest rates high that raises cost of production. WTO wants custom tariffs to be lowered and stands for free imports and exports.

If you take the essence, says Yusuf Shirazi, the three dimensional approach of the WB, IMF and WTO are anti-investment, anti-production and anti-exports. The cumulative effect of these policies is anti-socio-economic well being, he added.

In such an environment, no investment can take place.

To identify the emerging challenges and opportunities, three trade groups, Pakistan-Belgium, Pakistan-German and Pakistan- Italy Business Forum jointly organized a talk on “emerging challenges and opportunities” at a local hotel this week. Among those who spoke included Aziz Memon, Chairman Quota Supervisory Council, senior journalist Sultan Ahmed, former ambassador to Belgium Mahdi Masood and Mohammad Rajpar, president, Pak- Belgium Business Forum.

Pakistan has joined the international community, economic sanctions have been withdrawn, more financial assistance and great access to markets have been promised. It augers well for the future. This is how the speakers and participants looked at the emerging scenario. Yet, some felt that more was needed to be done. Pakistan has to improve its image by a democratic and secular dispensation. Its image has been tarnished by its close association with the Taliban.

Earlier, a round table conference on opportunities after September 11, was organized by JWP Asiatic-Gallup, which was attended by officials of multinational corporations, leading educationists, businessmen and journalists. The core issue discussed was whether the services sector could be re-located in Pakistan, and whether the country could serve as a regional hub for quality health and education services and a tourist destination. Those who spoke on the occasion included Dr. Manzoor Ahmed, Kaiser Bengali, Abid Naqvi, Byram Avari, Talat Tayyebji and Dr. Gaffar Jatoi.

Dr. Manzoor Ahmed complained that bureaucratic hurdles are preventing setting up of an educational institution for which an investment of $200 million has been offered by expatriates.

“Pakistan never misses an opportunity to miss an opportunity” and that is, in short, responsible for plunging the country into an economic mess, said a participant.

Dr. Abdul Hafeez Sheikh, finance minister, Sindh, who summed up the discussions with his own observations on investment opportunities said, “Pakistan has never been an investment-friendly country.” He believes that local and foreign investors should be treated at par as one follows the other.

The mindset of the government is the greatest hurdle in realizing the economic potential and turning a stagnant economy into a thriving one. What opportunities are being offered to expatriates at a time when there is a reversal of capital flight and brain drain, asked a participant.

Whereas, in Pakistan the business opportunities are being still identified in the emerging scenario after September 11, Malaysia has already mounted an international campaign to attract tourists who can be diverted from their traditional holiday resorts. Malaysia is action-oriented.

Now, the World Bank is organizing a workshop in Islamabad on business opportunities in the Reconstruction of Afghanistan later this month. No such initiative has been taken by either the government or trade bodies.

Of course, Yasin Lakhani, President, Karachi Stock Exchange told the conference, Kabul does not have a stock exchange and here Pakistan can play a role. Similarly, opportunities would be opened for supply of cement and construction material for Afghan reconstruction.