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Response positive

July 08, 2012

THE domestic market responded quickly and positively to government’s decision to reopen land supply routes for Nato forces in Afghanistan.

The oil-carrier drivers and their team of conductors and cleaners, (15000-20000 collectively), who were forced to spend months guarding their vehicles were all excited. They are waiting by their parked tankers, many at the Shireen Jinah Colony, Karachi, for the green signal to hit the road.

These people hailing from upcountry have not seen their families even once over the past seven months because of fall in their income and demand of employers to stay put till lifting of the ban.

“We are poor people and the lean business conditions landed us deep in debt. Whatever the risks, we have no option but to drive Nato carriers because we are tied to employers by loan we owe them”, Shahzeb, 40, co-driver, father of eight, told Dawn during an informal survey of the port area in Karachi.

“To gauge the real impact you need to understand the backward and forward linkages of an operation this large. From auto spare part market to mechanics to Dhabe walas (restaurants) along the route there are many more petty businesses that faced the brunt of the ban and benefited from its lifting”, Ahmed Shah, a supervisor of camping drivers near Keamari said.

The preparedness on part of the contractors paid off in the end and within hours of the policy announcement, pictures of long vehicles crossing over to Afghanistan appeared in the media. So far, trucks parked in customs check posts at Chaman in Balochistan and Torkhum in Khyber Pakhtoonkhwa have been cleared for onward journey.

Currently, around 8,359 containers and vehicles are reported to be stranded at the two ports, Karachi and Bin Qasim. Of these 5,834 containers and vehicles are at the Karachi port area.

Apart from the logistic sector, the currency market registered visible and immediate approval of government’s decision.

The easing of tension between Pakistan and US and announcement about the dispersal of arrears of $1.1 billion from the Coalition Support Fund lifted pressure on rupee.

For the first time, the currency dealers reported rush of dollar sellers in foreign exchange market, resulting in the gain in value of rupee against dollar.

“After a long spell of downward journey, the rupee demonstrated that a major obstruction in dollar inflow was lifted. It actually gained marginally as soon as the market opened on Wednesday after the announcement on Tuesday evening”, according to a local money changer.

Against about 97 to a dollar a week back in the open market, the rupee was trading under 95 to a dollar on Friday.

With improved prospects of financial support from friendly countries and multilateral donors following US financial commitments, bankers believed that the exchange rate would stabilise.

“Keeping widening trade deficit in view ($19 billion in 11 months of the last fiscal) a sizeable gain in the value of rupee during weeks and month ahead looks unlikely but the slide would sure be halted”, an analyst at a major bank said.

Many leading businessmen eyeing rebuilding opportunities in post-war Afghanistan view the current development in that context.

Senator Ghulam Ali, the former FPCCI president, opposed the reopening of Nato route that, he felt, compromised the will of the parliament and is against public opinion.

Haji Fazal Kadir Khan Sheerani, president of the Federation of Pakistan Chamber of Commerce and Industry, considered people opposing normalisation of ties with the US anti-business, placing their narrow political interests above everything else.

“The business community benefits by promotion of peace and expansion in business opportunities. Those opposing the decision in our ranks are confused or adorning ideological blinkers. We need to isolate such elements and support the decision by tapping on business opportunities”, he said.

“Ramblings in the political circles are disturbing, but we are happy that good sense prevailed and the leadership in the US and Pakistan accommodated mutual concerns to ease bilateral tensions”.

“In Pakistan particularly the economic situation is already difficult and further delay in the decision could have pushed the economy over the edge”, head of a multinational company asserted.