One way to ensure the right selection is to select all! This is probably the philosophy behind the recent selection of the largest ever cabinet in the national history by the new Prime Minister.

Now he wants to empower them to have a performance-oriented administration instead of merely an activity-oriented one. As Karl Marx once observed, 'Visionary administration is where empowerment lies with everyone'. For all our sake one hopes that Mr. Aziz does not believe in the Marxist philosophy and does not go on to empower all of them.

However, on a more positive note, finally the long standing need and demand for a separate textile ministry has been finally met and with the main WTO implementations round the corner it is better late than never.

Mushtaq Cheema is a good choice in the sense that in him they have selected a person who is practical, a go getter, and most importantly being a leading national textile exporter he is very much in touch with the textile issues and challenges pertaining to the WTO.

He might not hail from a classical textile background but his track record in the field speaks well for the work he has done and the organizations he has headed in this sector.

Successful development requires an active focus on doing what is right for development, rather than merely meeting minimum standards. The key is for policy makers to potentially see Pakistan's WTO accession agreements as a means to achieving broader goals.

A sure and prudent way forward should be to try and efficiently integrate national reforms with the implementation of WTO commitments. Some of the areas where immediate focus is required are:

(i) Understanding what the WTO membership really means. Unlike China and India we have, to-date, not conducted a serious extensive, study to understand what the WTO membership means to Pakistan.

In such an endeavour we need to find out how we will be actually affected by the WTO and not base our knowledge on conjectures, ideas and views expressed by others.

A good example in this regard is that contrary to the much touted global opinion that China will emerge as the real winner, the detailed studies jointly conducted by China's State Council Development Research Centre (SCDRC) and the World Bank argue that unless timely policy measures are adopted post-January 01, 2005 outcomes will be actually worse for China than for other WTO members, since nearly 70 per cent of China's exports are based on products that are highly vulnerable to anti-dumping measures.

(ii) Providing the right legislative base for accession to WTO will be the key factor in determining not only the acceptability of Pakistani companies as trading partners in the post-January 01, 2005, WTO regime but will also be critical in projecting Pakistan favourably to the international firms as an option for a production and sourcing base which can be both workable and lucrative.

A careful review of the existing laws has to be made to ensure compliance with WTO's legislative requirements and related amendments without further delay have to be implemented.

This will provide mechanisms to deal with issues like USTA section 301, anti-dumping, expedition of domestic and international dispute settlement process in a transparent manner and in specific courts of law, usage as and when required of the TRIPS agreement under the auspices of the WTO dispute settlement mechanism, timely and effective contestation of anti-dumping measures, etc.

Nearly all leading world nations have already completed this exercise. China, India and Russia to name only a few. Russia for example, amended 40 different laws over the last 4 years to ensure compliance and compatibility.

(iii) Size does matter: The Chinese textile economy started a re-structuring process as early as the 1980s and focused on increasing capacity in every sector of the textile industry.

For example, spinning capacity in China increased from 18 million spindles in 1980 to 55 million spindles in 2003. China's share in the world's installed capacity of modern shuttle less looms increased from 6 per cent to 15 per cent during the same period.

Similarly production of fibre increased from 3,351 million kg in 1980 to about 12,000 million kg in 2000. Production of yarn increased to more than 8,000 million kg at present. A large part of this production increase has been channelled towards exports.

The textile and clothing industry in China exports about 50 per cent of its total output. Along with the increase in capacity the country is also improving product quality. For example, 40 per cent of the modern shuttle less looms shipment during 1993-2002 went to China. The second largest recipient of the shuttle less looms was South Korea, whose share was only 9 per cent. It explains the gap between China and the rest of the world, especially the developing countries, in upgrading technology.

Whereas investment has increased in Pakistan in the last 4 years it needs to be further encouraged as the difference in the size of our economy with that of China and India remains huge.

iv) Identifying and targeting our strong sectors. We need to conduct an in-depth analysis to identify the textile sectors where we currently have a competitive edge and the potential to carry it into the WTO era.

Based on this assessment of our areas of strength a strategy should be evolved for necessary support from the financial institutions. Resources and efforts should be focused in areas in which we see ourselves as one of the main players for accelerating growth.

v) Zero-rated sales tax: With expected pressure on prices as a natural outcome of increased competitiveness in the WTO regime the seemingly small burdens to profitability today will assume tangible significance.

One such main cost relates to sustaining the totally un-necessary exercise of first paying a high rated sales tax payment and then seeking its refund on exports. With profitability predicted to shrink to about 5 per cent after correction in prices for high turnover products a seemingly low 2 per cent cost (the minimum sales tax refund cost to a company) could mean 40 per cent of the profitability.

Such a high transaction cost in a cut throat competitive environment could mean the difference between securing or losing a major contract. This exercise in futility should immediately be done away with and as is the case in most developed countries exports should be zero-rated for sales tax purposes, i.e., no collection - no refund.