Trade: promising signs

REPORTS of a 20 per cent increase in industrial output and a 50 per cent rise in machinery imports in July over the corresponding period last year raise hopes of a turnaround in the economy which has been in a state of stagnation for over five years now. Commerce Minister Abdul Razzak Dawood has taken these increases to mean that the economy is on its way to recovery as exports have also been rising since March this year. Razzak Dawood informed a gathering of businessmen in Karachi the other day that exports were going up in both volume and value. If the trend holds, through value-added exports alone Pakistan could achieve the goal of outpacing its imports in a short time. The latest trends in imports also indicate some improvement in investment climate as textile-related machinery imports went up by 60 per cent in July. A 40 per cent increase in the import of power generation equipment by the private sector indicates that many local businessmen have decided to fend for themselves instead of depending entirely on Wapda’s increasingly costlier power so as to benefit from what perhaps they see as an improvement in market conditions inside and outside the country. What is more significant is the fact that all this improvement in the economy is taking place at a time when the country’s law and order situation remains increasingly under pressure from acts of terrorism and violence.

Razzak Dawood is trying hard to obtain for Pakistani goods as much access to the global market as one can expect in the given circumstances. He has already secured expanded market access in the EU. Recent free trade agreements with Sri Lanka and Bangladesh too are promising. These efforts now seem to be paying dividends. However, there is no concept of a one-way market access. For reasons of reciprocity in terms of mutual access, the government has recently started allowing import of cotton, fruits and vegetables in which the country already has a comparative advantage. Such a policy would help improve the quality of our products and also make them cost-effective. The commerce minister is right when he says that this policy may hurt the interest of local farmers and manufacturers in the short run but believes that the longer-term benefit of product improvement will prove highly rewarding.

However, the biggest challenge perhaps is to acquire adequate access to the US market. There is a lot of goodwill in the US for Pakistan to count on, especially to push the sale of the country’s garment products. In this context, what the July issue of the influential US business periodical Forbes said is encouraging: “We should quickly conclude a free-trade agreement with Islamabad, and urge the EU to do the same. Pakistan has no shortage of entrepreneurs who would create businesses that could sell in these markets. Keep the IMF vampires away (from Pakistan). The agency’s blood-sucking prescriptions of high taxes and debased currencies are the last thing Pakistan’s beleaguered economy needs.”

Costly blunder

FLAUNTED as the pride of the Pakistan Railways upon arrival at the Karachi port a few days ago, it turns out the Chinese-built rail carriages are of larger width than our existing platforms can take. The just acquired 14 carriages are to be part of a new train, the Karakoram Express, which will start running between Lahore and Karachi from August 14. According to reports, the PR had to ‘trim’ the concrete-built platforms at several railway stations to facilitate the passage of the said carriages as the train embarked on its test-run journey from Karachi to Rawalpindi the other day. If true, this calls for an inquiry into the purchase of the carriages built to specifications that are not compatible with those of the Pakistan Railways. Surely, someone must have goofed in providing the specifications to the Chinese firm that built these carriages. If this had happened in any other country a few heads would have rolled by now.

The carriages in question are part of a deal the PR struck with a Chinese carriage building factory, which will provide 20 completely built units of a total of 175 carriages under a Chinese financial help scheme worth US $200 million. The remainder of the carriages will be designed, built and assembled at the PR’s carriage factory in Islamabad under a transfer of technology agreement. Similarly, 69 train locomotives are also to be inducted into the PR fleet, of which the first 15 will be built in China and the rest in Pakistan.

Given the bureaucratic tangles and a general lack of professional expertise on the part of the railway officials who sealed the deal with their Chinese counterparts, it is indeed a shame that the prestigious train’s initial run should have been marked by such a basic hurdle in its smooth passage through our railway stations. One assumes the said 14 coaches will have to embark and disembark passengers from the modified platforms now, which would involve safety hazards for passengers travelling by other trains at the time of embarking and disembarking.

Facelift for Murree

MURREE is a popular local tourist destination that has the potential to develop into a must-see site for foreign tourists as well as for the overseas Pakistanis visiting their home country every year. In this respect, it is encouraging to see the Punjab Finance Commission allocating Rs600 million to Murree Tehsil for development projects, which together with the Rs200 million already allocated for the same purpose in the Tehsil Municipal Administration budget 2002-2003 brings the total amount for development of this popular hill station to Rs800 million.

With an annual tourist influx of 400,000, it is only natural that Murree Tehsil be a focus of developmental work in the province. Projects will have to concentrate on improving its access to a clean and regular water supply, maintaining and widening its roads, including the access roads, and ensuring general cleanliness in the area. Murree also needs to expand and improve its car park and public toilet facilities. While there is already a first class hotel resort and golf ground nearby, and a chairlift facility that provides a panoramic view of the surrounding area, TMA would do well to try and encourage enterprising individuals and organizations to open up more recreational facilities for visitors. In planning its development projects, however, TMA will have to ensure that it keeps a balance between uplift schemes for the rural people living in Murree Tehsil and facilities for the ever increasing visitors.