Need to keep the crucial dimension in sight
Over the years Pakistan has seen a number of local industries shifting to other countries. With deteriorating infrastructure, particularly power and gas shortages, an unending wave of terrorist attacks combined with kidnappings for ransom and extortion, investors started looking for safer environs. Another potent reason for the capital flight was the high cost of work, making Pakistani products uncompetitive in international market. The winding up or relocation of scores of companies including four textile mills added to the number of the unemployed. With the grant of GSP plus status from Januray 2014 for three years by the EU, hopes of the revival of a significant sector of industry have gotten a boost. With Pakistani exports getting waiver of 9.6 pc duty, foreign investors are expected to enter into joint ventures with local entrepreneurs ensuring value addition to maximize benefits. This according to the federal minister of state dealing with commerce, Khurram Dastgir will lead to $700 million to $1 billion of additional exports to the EU and create employment opportunities for 100,000 people in domestic industries.
Euphoria apart, it must not be forgotten that a single sparrow never makes a summer. Unless the government eliminates extremism and militancy, improves the supply of power and gas all round but to especially to the industry, and until the country has a healthy and trained manpower, not only foreign investors but also many Pakistani businessmen would be reluctant to bring their capital back to Pakistan. There is thus a need to put an end to flip flop over terrorism. Meanwhile full attention needs to be paid to improving governance.
While the commerce ministry worked hard to lobby the EU countries, the crucial change presumably occurred with Nawaz Sharif’s Washington visit where Pakistan’s help in restoring peace in Afghanistan was considered highly valuable. This dimension of the concession must not be lost sight of. The strong statements given by some of the government leaders in the wake of Hakimullah Mehsud’s death in a drone strike elicited an immediate reaction from the NATO chief Anders Fogh Rasmussen. Rasmussen urged Pakistan to keep open supply lines to the NATO forces in Afghanistan despite anger over a US drone strike that killed the Pakistani Taliban leader. He expressed the hope that the Pakistani authorities, including the government and the military, realized it was in Islamabad’s interest to ensure peace and stability in Afghanistan. There is thus no guarantee of the concessions continuing should Pakistan’s leadership cave in to the pressure exerted by the terrorists and their sympathizers.