Never was there a clearer case for freer trade than the cement sector. As opposed to the other sectors of the economy, this one has the potential to do rather well. Not in the sense that it is untapped potential but in terms of a tangible, working, established set up. But this fiscal year was awful for cement manufacturers; faced with a lukewarm appetite in the domestic markets, close to 80 per cent of the units in the country faced stark losses. Or so says the country’s cement manufacturers’ association.
As a result of this sluggish demand for cement, many of the country’s cement plants have been operating at a sub-optimal level, lowering their competitiveness. Matters were, of course, compounded by the fact that there were no signs of the subsidy that the government had promised for inland freight.
Across the border, it’s quite another story. The Indians can’t get enough of the stuff. Not only is there a shortage of cement, Pakistani cement in particular is in high demand because of its good quality. The Indian economy is growing quite steadily. And with growth in the developing world comes large scale construction, creating the need for, amongst other things, cement.
How some countries can eke out a competitive advantage in a particular field despite the odds is the subject of debate amongst economists. But the spillover of economic progress and growth from one economy to another adjoining one is well documented. It is a process spread over many phases, some of which might not be pleasant. The cement manufacturers might be overjoyed, other sectors maybe not so much. A glut of products from another country might kill off certain local industries but the end results are generally for the betterment of both economies.
It is about time we bite the bullet and open up the surface trade routes between the two countries. Not only is this a sure fire way of ensuring regional peace and pacifying the trading class – otherwise a constituency of warmongers – but it is also a means to create a synergetic energy for the economy of both sides. There’s way too much untapped potential to squander off on regional squabbles.
