EU's welcome move

The European Union's decision to review its anti-dumping duty imposed on Pakistani bedlinen exports is good news. The EU is the largest single market for Pakistan's bedlinen exports and the imposition of 13.1 per cent anti-dumping duty in March this year adversely affected the $500 million target set for the fiscal 2003-04.

One hopes that exporters would now be able to recoup their losses and once again post impressive figures in the year for this category. Overall textile exports from Pakistan recorded an 11.7 per cent rise in Jul-May 2003-04, as did exports in all major categories.

Hopefully, with the withdrawal of punitive duties in the coming months, bedlinen exports will push up overall exports even further. When this duty was imposed in March, Pakistan protested on the grounds that proper investigations, which should have been carried out as part of the anti-dumping proceedings by the relevant EU team, were never completed.

The decision to punish was taken on the basis of an incomplete investigation. Initially, the EU had decided to commence anti-dumping proceedings in 2002 against Pakistani exporters after a complaint was lodged.

Soon after, an EU team arrived in Pakistan and decided to inspect six out of a total of 178 companies that offered to be checked. In the midst of this process, the EU team members received an anonymous threatening letter, which impelled the team to leave Pakistan in a hurry.

While the investigation remained inconclusive, the EU decided to go ahead and impose the anti-dumping duty. There are many lessons to learn from this episode. For one, the government should work proactively and not wait for some more punitive measures to be taken.

Both the government and Pakistani exporters need to enhance their representation at EU forums. There are more challenges that lie ahead. Pakistan is expected to lose its duty-free concessions under the General System of Preferences (GSP) from January 2005.

This could mean imposition of an average 12.4 per cent duty by EU countries on the import of textile products from Pakistan. n addition, the government needs to look ahead at two major developments in the offing that will have a direct impact on the balance of trade, particularly exports, in the coming few years.

As the WTO regime goes into operation by 2005, the country's exports would be exposed to free market competition. For Pakistan to be competitive in the international market, it needs to ensure that locally made products are attractive internationally.

Quality and price need to be kept under strict scrutiny because of this. Also, with deliberations taking place to reduce tariffs between member states under the South Asia Free Trade Agreement (SAFTA), regional trade is expected to increase.

Trade between India and Pakistan will rise as a consequence and Pakistan has to be in a position to offer a wide variety of traditional and non-traditional items for export to India in return for what that country would like to sell here.

The extent of advantage that the industry would get from GATT and SAFTA depends on the speed with which the textile sector makes the necessary adjustments for the new playing field that would emerge.

Fair polling

Intense interest has built around the Attock and Tharparkar bypolls through which nominated prime minister Shaukat Aziz is to be elected to the National Assembly. Both are considered safe ruling coalition seats, and there is practically no chance of an upset, unless one is deliberately engineered by someone.

The opposition will not be able to field joint candidates because of the growing rift between the ARD and the MMA. However, the ARD hopes to be able to agree on common contestants. Since the by elections have become a matter of some prestige for both sides, it is important that they should be held in the most transparent and fair manner.

Mr Aziz would have an unhappy start to his innings as prime minister if the pitch is in any manner queered. The unorthodox way in which he has been selected for the position has already raised a controversy.

There is confusion also about whether he is expected to resign as finance minister before seeking election to the National Assembly or not. Also, a question has been raised about his nationality - although rather late in the day considering his acceptance by the opposition all these years as custodian of the nation's exchequer.

Such issues deserve to be cleared up to the satisfaction of everyone concerned. The greatest responsibility for ensuring clean polling in Attock and Tharparkar will naturally rest with the Election Commission.

Not since 1970 has any election been held in the country that has not been followed by allegations of unfair practices and its outcome challenged. The by elections in Sindh and Punjab comprise the most recent example.

The chief election commissioner should be deeply concerned about the loss of credibility suffered by the commission in both opposition circles and the public at large. He now has an opportunity to assert and establish his neutrality.

It is to be hoped that the election commissioner, the PML and the administration will ensure that the by elections are cleanly fought. The government in any case should have little reason to attempt any fixing if the two seats are considered to be sure bets.

Ministerial extravagance

The National Assembly was told recently that the official cars of the defence, railways, education and foreign ministers consumed a huge amount of petrol every year and several hundred thousand rupees were spent on their upkeep and maintenance.

These are extravagances that a poor country like Pakistan can ill-afford. No wonder, paying for the perks and salaries of government officials, along with defence and debt servicing, eats up much of the annual budget.

The public is constantly being told by senior state functionaries, especially the finance minister, that resources are scarce and that everyone must make sacrifices and fulfil their obligations, like paying taxes and other levies, so that the country can progress economically.

But what should the salaried middle class taxpayer make of the fact when he or she is told that ministers spend lakhs each on their official cars alone. Aside from cars, it is commonly observed that government officials at all levels, from a minister down to a grade 18 bureaucrat, tend to enjoy a vast range of perks and privileges not available to any other profession save perhaps the military.

A few years ago a commission drew up a report on civil service reforms which recommended that a smaller-sized government would be more cost-effective and efficient. Small government has in any case become the norm everywhere.

In fact, even Pakistan's finance minister often uses this argument for the privatization of the public sector, stressing that downsizing will lead to greater efficiency and better performance.

Ironically, the government itself refuses to follow this reform credo and adopt a more austere way of life. If it did that, it would set a good example for the ordinary taxpayer and also help contribute to the poverty alleviation effort.