Monthly Economic Affairs February, 2014

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FEBRUARY 2014

Volume-III, Issue-II

The economic fatality

No operation?

Operation or

Peace Talks with Taliban: a non-starter

R s . 2 5 0





EB 2014 4 hp://www.economicaairs.com.pk FEB 20145hp://www.economicaairs.com.pk

EDITORIAL

Now it has been more than a decade that the government has shown

leniency and soft tone to tame and bring Tehreek-e-Taliban (TTP)

to the table. This grave leniency has not only worsened the law

and order situation in the country, deteriorated economy but has

also put the image of her prestigious institutions at stake. Instead

of any counter action, the emotional speeches and formation of committees by the

governments has always encouraged TTP to carry forward high grade extremism

against the state, institutions and people as per their own choice.

In an interesting turn of events, the federal government and the Tehreek-e-

Taliban Pakistan (TTP) have announced their teams of ne gotiators for peace talks.

The security analysts are skeptical about the future of the talks, saying that

the Taliban are still in no mood to lay down arms and instead, they are set to raise a

plethora of demands to the government.

The Taliban’s wish list surfaced in media c ontains their demand to promulgate

rule of Sharia, introduction of an interest-free financial system, withdrawal of troops

from tribal areas and abolishment of military check posts. They further demanded

release of their 4,752 activists, currently imprisoned in jails and ending up a ll cases

registered against TTP activists. The list also contains the names of those who have

been served death sentence by the courts. Interestingly, the TTP has also demanded

for compensation of losses it faced during military operation. Acceptance of these

demands would simply mean surrendering the state authority.

Taliban is an armed group and has successfully been mounting attacks on the

Pakistani government, its army and the political personalities, not to mention ordi-

nary citizens. They have training facilities, huge ammunition, and a supply chain of

funds and have relations beyond borders.

It is pertinent to mention that the Taliban have responded positively for the

peace talks after recent bombings by Pakistani forces on their hideouts in Waziristan.

The bombing was carried out after a Taliban suicide bomber killed 13 people in a

crowded market near Islamabad and two days later of the incident TTP killed 20

troops in the northwest town of Bannu.

Numerous peace accords have previously been broken by the militants by

using the time to gather their strength and reunite in the name of negotiations. In

case the talks reach on an agreement, what would be the future of the Taliban army,

which is a huge organized trained force? There is no doubt that people trained for

war would never be ready to work as factory laborers or office workers.

If the government wants to maintain peace, Pakistan government would have

to opt for a well-planned and in-discriminatory full military operation in all hide-

outs of TTP to dig and cut out all its resources. The in-discriminatory military op-

eration will make people realize the cost and consequences of supporting TTP in

their areas. The hue and cry of people losing near and dear ones in wake of military

operation will ultimately lose locals support to TTP and will ultimately pressurize

them to either quit Pakistan or sit on the table for talks, unconditionally.

A military action if not carried out today will be quite challenging in future

as it is evident from the intensity of extremism and terrorism by TTP which has

increased with each new tomorrow. It is the only way out to bring them on the table

on government’s terms and con ditions.

Ending Taliban infestation

FEBRUARY 2014

Pages 10-11

The US-Iran nu-

clear negotiations

– Hafiz Muhammad Irfan

Pages 22-23

Distractions of the

Wireless World

– Dr Fawad Kaiser

D I S C L A I M E R

Utmost care is taken to ensure that articles and other information published are up-to-date and accurate. Furthermore,

responsibility for any losses, damages or distress resulting from adherence to any information made available through the

contents is not the responsibility of the magazine. The opinions expressed are those of the authors and do not necessarily

reect the views of the editor, publisher and the management. Comments and suggestions are welcome.

Exclusive

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Deputy Editor

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Correspondents

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EDITORIAL BOARD

– Dr Ashfaq Hassan Khan

– Dr Abid Sulehri

– Shabbir Ali Nizami

– Sajid Gondal

– Zubair Malik

Pages 8-9

Analysis of Taliban

Jurisprudence

Pages 16-17

– Dr Muhammad Rasheed

Livestock recognition

through (PARIS)

– Tammy Swofford

The Kashmir issue from theAmerican perspecve..................12

News in Brief...........................14-15

Neglected Infrastructure; deprivingsociees..................................18-19

Robots are the not-too-distant

future of war...........................20-21

Partnership for health. .........24-26

Pak-India trade good for bothcountries......................................27

The untold story of the people ofAzad Kashmir................................28

Unauthorized purchase ofproperes at higher rates............29

Diplomacy of brotherhood.....30-31

Lost opportunies and futureopons........................................32

Shipping organisaons withaccurate intelligence...................33

Pakistan prepares to introduceood-tolerant rice variees...34-35

Qatar’s unparalleled socio-economic prosperity...............36-37

Rs. 250

Spectrum auction can

trigger Pakistan’s

economyPages 18-19

Publisher: M Sajid Printers: R.A. Printers




internally displaced persons also consumes a

big chunk of the government’s financial re-

sources, widening the fiscal deficit and halting

economic growth.

Thus, government is compelled to in-

troduce budgetary restrictions to control the

budget deficit and keep budgetary formation

aligned.

Pakistan is the only country in the world

facing direct backlash from global war on ter-

ror. Its role as a frontline state has deteriorated

its economic condition and has also weakened

its future economic prospects. According to

South Asia Terrorism Portal (SAPT), a total

50943 fatalities have been registered in terror-

ist violence in Pakistan since 2003, including

18373 civilians.

In a recent statement, Pakistan’s Fi-

nance Minister Ishaq Dar said that Pakistan

has suffered a loss of around $10 0 billion since2001-02 due to the war on terror. Its economic

growth came to a near halt at around 2% in

fiscal year 2009. FDI fell to $463 million in

the first quarter against $1.116 billion during

the same period the previous year, which is a

decline of 58.5 percent.

Besides, due to widespread unrest and

political uncertainty in Afghanistan, large

quantities of our food items/commodities are

smuggled to Afghanistan, which ultimately

leads to acute food grain scarcity within our

country.

The current government has ambitious

economic targets. It announced to gain 7 per-

cent of GDP growth and also aims to lower

budget deficit to 4 percent and the tax-to-GDP

ratio would be increased to 15 percent in the

five years term of this government. However,

Pakistan cannot achieve economic revival

until having internal stability and peace with

neighboring countries.

Pakistan’s security situation will be the

key determinant of the future flow of the in-

vestment, and the country’s economy needs an

early end to this war.

To tackle the situation, the government

requires a wide ranging military operation

along the Northern borders to eliminate Tali-

ban groups from their base. Secondly, it also

requires initiating a cleanup operation led by

police in metropolitan cities to net the ele-ments of terrorism. Thirdly, the government

should immediately kick start projects for

electricity generation and make effective poli-

cies to restore investors’ confidence. It will as-

sist in improving economic and financial con-

ditions and also attract domestic and foreign

investors. Fourthly, the market size is also a

very important variable for increasing inflows

of FDI in Pakistan. Finally, the exchange rate

of Pakistani rupee should be strengthened in

order to lure foreign investors. More fiscal in-

centives should be offered if the country is to

stem the fall in overall investment.

Above all, the soft image of a coun-

try is like a cashable commodity, as it is an

important source of attracting foreign direct

investment.

The military operation in Swat was a

good opportunity to eliminate terrorism, had

it been taken to a logical end. It was after the

Swat operation that the Taliban spread their

roots across Pakistan. There is no doubt that

they have gained strength and are in posi-

tion to carry out acts of terrorism anywhere

in the country. Any new operation in South

Waziristan and along northern borders would

result in a severe backlash that would even de-

stabilize the government.

Nevertheless, there is also no doubt that

any soft approach towards handling of Taliban

issue or delay in a rigid military and police

operation in border areas as well as in the cit-

ies would mean putting the existence of the

state in danger. There couldn’t be a c orrelation

between terrorism and prosperity. Investors

would never invest in a destabilized country

and if there are no investments, there would be

no employment, no growth, no prosperity and

no civilization.

Finally, the prime minister has formed

a four member committee to initiate dialogue

with Taliban. The Taliban have also shown

their willingness for talks. But firstly, every-

one knows that Taliban are a force and they

will not kind heartedly accept government’s

request for laying down arms and secondlyhow independent are Taliban in making their

decisions? They would come up with demands

that would be unacceptable for the state. Even,

if the government manages to reach an agree-

ment with Taliban, what is the guarantee that

its faith would not be different than the previ-

ous agreements signed with Taliban.

Keeping in view the faith of the agree-

ments signed in the past, it is very likely to

be nothing but just a mere exercise. A military

operation against terrorist groups would most

likely be the last resort.

The writer is a team member of monthly

Economic Aairs and a nancial journalist from Islamabad. He can be reached [email protected]

Certainly, Pakistan is not an

Asian tiger, neither, it is on the

path to become a tiger, though

the country has a tremendous

potential for economic growth.

Terrorism is not the only one, but a major

hurdle in its way for development and pros-

perity. It creates uncertainty, reduces confi-

dence and increases risk perception, leading to

lower investment and weak economic growth.

Unfortunately, the current government led

by PML (N), the previous PPPP rule and the

army led regime failed to tackle this growing

menace and let it spread like a smoke across

Pakistan.Other factors hampering economic

growth are shortfall in means of energy i.e.

electricity, gas and oil, corruption and short-

age of skilled human resource. Though, the

root cause of all these negative factors is be-

lieved to be terrorism and crimes. Many in-

vestigations concluded that Taliban residing

inside Pakistan are responsible for acts of ter-

rorism and are supporting crimes to fund their

movement.

With worsened law and order, the cost

of doing business increases, normal business

requires more time and extra security. It re-

sults in sharp decline in investments, extra ex-

penditures on security and heavy development

costs due to destruction.The rehabilitation of

Sajid Gondal

Operation or

The economic fatality

No operation?

The military operation in Swat was a good opportunity to

eliminate terrorism, had it been taken to a logical end. It was

after the Swat operation that the Taliban spread their roots

across Pakistan. There is no doubt that they have gained

strength and are in position to carry out acts of terrorism

anywhere in the country. Any new operation in South

Waziristan and along northern borders would result in a

severe backlash that would even destabilize the government.

COVER STORY

Operation or

Peace Talks with Taliban: a non-starter




to function as signal, symbol and code is mov-

ing from Arabic, to transliteration, to desktop.

A basic thought which is threaded

throughout the Taliban document is based on

the concept of Walawal Bara. The boundar-

ies regarding limited friendship with idolaters

(non-Muslims) and more demographically

specific, Jews and Christians, is strongly con-

veyed. Qur'anic ayat are liberally tossed about,

without balancing the text with an understand-

ing that each ayat in the Qur'an has a historical

backdrop.

In and of itself, time line constraints are

difficult for many Muslims because temporal

sense of space is enveloped within the concept

of eternity. So the history and battles of the

early Islamic state become more than just his-

tory. They spring to life for re-enactment in the

21st century. Enmity is forever.

The author gives the well-worn trope

of Dar ul Islam and Dar ulHarb. He speaks

of a world separated into two spheres. I have

to smile.In actuality, a third concept, that of

Dar al-'Ahd (treaty territory) and an additional

"two spheres” or two suite of laws apply.

The concept of Ma'ahid resonates in the

writing of the author. It is a term which does

not denote a security agreement with an op-

posing force. Rather, it is the truce between

two mutually-hostile forces which allows for a

cessation of hostilities for ten years. (Author's

note: the legal precedence for a decade of ces-

sation of hostilities is the Hudaibiyah treaty.)

In other words, a document which provides for

appeasement is allowed. It is allowed for ten

years. But beyond the truce, all documents

must be signed by a legally recognized Amir

of a territory, his deputy or someone with by

direction signatory authority. President Hamid

Karzai? He remains a disappointment to the

West. His administration is pock-marked with

corruption and cronyism. He remains a target

of the Taliban. In the document, he is treated

as a legal non-entity.

The document states there is no legal

basis for a security agreement because Ameri-

cans do not fall within one of two categories.

We are neither tax-paying non-Muslim, nor

do we come with a legal document which the

warring party will agree to sign.

The author states that while solid objec-

tives are obtained for the United States (con-

trol over land and air space, military bases,

access to communication, etc), that which is

offered to the Afghan population is ambiguous

and general in nature.

Interestingly enough, the document ends

on a weak note because of the inclusion of a

paragraph about the open sale of pork and al-

cohol products. This topic falls under a com-

pletely different suite of laws and on a basic

level, the sale of alcohol falls under the catego-

ry of Hisbah/public order. Perhaps the author

ran out of steam. But as for me, I think I need

a drink.... of water, of course.

WAR ON TERROR

The distillation of thought for ne-

gotiation on the communal level

most likely began with the Al-

Fudoul confederacy. But it was

a meeting at Wadi Al-Muhassab,

and subsequent social boycott of Prophet Mu-

hammad (PBUH) and his followers which

forged the thoughts regarding future domestic

and foreign policy endeavors. Undoubtedly,

the grandson of 'Abdul-Muttalib and his fol-

lowers were also emotionally impacted by a

trail of ants and the story of their own small in-

tervention to validate the end of a social boy-

cott and the supremacy of the Muslims. This

caused the Messenger of a growing cadre of

loyalists to say, "I will guide you in the means

by which you will gain sovereignty over both

the Arabs and the non-Arabs."

The crafting of the Hudaibiyah treaty

showed a distinct doctrinal strength which es-

tablished precedent for negotiations which did

not place the Muslims at a disadvantage. The

Makki text of the Qur'an focused on pivotal

eternal issues and soft social issues. But after

the rise of a nascent Islamic capitol at Madi-

nah, a suite of laws regarding issues of state

and foreign policy began to emerge. Usool

al-Fiqh (sources of Islamic Law) as provided

in the Madani text gave greater emphasis on

issues of state, including both military and

diplomatic options.

Islamic conquest and expansionism was

the cadence heard across the region after thedeath of Prophet Muhammad (PBUH). The

concept of the authority of Muslims above a ll

other people became an anchoring thought.

To the winner belong the spoils of war. To-

day, this cadence is felt in Afghanistan. "Al-

lah will never give the kafirun a way over the

Muminun" is the word on the street for the

Taliban. This posture has been noted through-

out the years in which America and NATO

allies have sought to clip the wings of jihad.

In a sense, the holding pattern of the talib re-

garding belief has brought us to the place we

stand today. We are in need of an exit plan,

a security agreement, and future squared-jaw

interactions across negotiation tables.

Law is the filigree of Islamic culture

when viewed through the eyes of the West-

ern powers. It is subtle and difficult to under-

stand for those who have not mentored under

Shari'ah chain of command. We examine text

and see stagnation. But for those who are

strongly observant of Islamic principles, law

is effervescent. These individuals envision a

fountain.

AnalysisDocument retrieval from a jihad portal

provides a counterweight analysis of the Bilat-

eral Security Agreement between Afghanistan

and the United States. The author states that

Afghans are Sunni Hanafi. Hence, the works

of Hanafi maddhab (scholars) are used in sup-

port of an argument against the agreement. The

document is powerfully written. The primary

defense against the Bilateral Security Agree-

ment finds a platform with codified Fiqh rul-

ings which provide a compendium of thought

regarding foreign affairs. I am reminded of a

current reality. Many of the jurisprudential

rulings and writings which were the domain

of scholars are now within the reach of the

"Awamm", or “common people". Ancient text

harbored within library archives and museum

displays in a prior era is now available on theinternet. The ability of the Qur'anic Sciences

Analysis of Taliban jurisprudence

The bilateral security agreement

Tammy Swofford

The writer is a freelance journalist andauthor of the novel Arsenal. She can bereached at [email protected]




Iran from becoming a nuclear power. The Jew-

ish Institute of National Security Affairs (JIN-

SA) in its report, “Strategy to Prevent Nuclear

Iran” says, “Three consecutive presidential ad-

ministrations, of both parties Democrats and

Republicans, have declared a nuclear Iran un-

acceptable. Shortly after his election in 2008,

President Barack Obama pledged, like his

predecessors, touse all elements of American

power to thwart Iran’s nuclear ambitions. Sec-

retary of Defense Chuck Hagel spelled out the

Administration’s position even more clearly

during a visit to Israel this spring: all military

options, and every option, must remain on the

table in dealing with Iran.”

There are hardliners on both sides who

are opposing this deal. As per Foreign Policy

Magazine report published on December 19,

2013, two of the most senior Democrats in the

US Senate including Robert Menendez, “who

chairs the powerful foreign affairs commit-

tee” and Chuck Schumer, “the third-ranking

Democrat in chamber” have asked to impose

new sanctions on Iran.

It will be very difficult for President

Obama and Secretary John Kerry to get Con-

gress to agree not to impose new sanctions

on Iran. If they keep on failing and Congress

passes legislation, new sanctions can sabotage

the final deal with Iran. On the other hand, it

could be a pressure tactic to force Iran to go

by the book. U.S. Senator will only make a

hue and cry for sanctions while in reality these

sanctions will not be imposed.

However, President Obama has recently

stated that he would veto any new sanctions

passed by the U.S. Congress during talks on a

long-term deal with Iran.

The US Secretary of the State, Mr. John

Kerry, in a testimony before the House Foreign

Affairs Committee, also requested not to go

for new sanctions against Iran, he said, “This

is a very delicate diplomatic moment, and we

have a chance to address peacefully one of the

most pressing national security concerns that

the world faces today with gigantic implica-

tions of the potential of conflict”.It was also necessary for America’s

strategic interest to go for a diplomatic solu-

tion with Iran by signing a nuclear deal in the

context of Afghan end game as U.S. has to

withdraw its forces from Afghanistan and U.S

needs Iran’s role in Afghanistan.

On the other hand, Iran wants to boost

its economy. Commenting on the deal, Dr.Tahir Amin, a renowned Pakistani Professor

of Political Science and Director, National

Institute of Pakistan Studies, Quaid-i-Azam

University Islamabad argued, "Iran is going

to adopt Turkish model. It wants to boost its

economy. Iranian President Hassan Rouhaniis

doing what he had pledged in his presidential

election campaign that he will revive Iran’s

economy as its economy is on crossroads, he

remarked.”

Moreover, Vali Nasr in his article “Iran’s

Economy on Crossroads”, published in The

New York Times on December 04, 2013 said,

“under the stringent sanctions of the past two

years, Iran’s oil exports dropped to around 1

million barrels per day from 2.5 million. Gross

domestic product shrank by 5 to 6 percent.

Inflation soared to 45 percent, and unemploy-

ment to 35 percent.”

Israel and Saudi Arabia are two main

opponents of this deal. Israel’s resentment is

quite obvious as it is the main rival of Iran and

it wants to dismantle Iran’ nuclear programme.

A nuclear-capable Iran is a continuous head-

ache for Israel. Israel has certain reservationsas the interim nuclear deal does not question

nuclear capability of Iran.

In a way, Saudi Arabia’s concerns are

quite significant and valid as if Iran’s relations

become normal with US, it will certainly gain

political and economic role in the South Asia

and Middle East which is unacceptable to the

Saudi Arabia.

After decades of stand-still between

Iran-U.S relations, this nuclear deal could set

new dimensions for the international politics.

This will help improve security and stability

not only in the Middle East but also in South

Asia. If properly and timely implemented, it

goes in favor of both Tehran and Washington.

Iran wants to boost its economy and free oil

trade with the world and U.S. does not want to

see a nuclear-capable Iran as it wants to see a

stronger Israel compared to Iran.

Iran has emerged as the major benefi-

ciary of this deal as it will sustain its nuclear

capability, although will not make a nuclear

weapon, will boost its economy and will play asignificant political role in the region. In writ-

ers' view, this interim deal will succeed, and as

a result of final deal, Iran’s significant political

role in the region is imminent.

The only danger to the regional players

and the United States will be from Saudi Ara-

bia, it will play a proxy war in the region. Now

it will be a test for Pakistan and United States

how to tackle this issue. By and large, the said

deal is a good omen for the region in specific

and the world, in general.

The writer is pursuing an M.Phil inInternaonal Relaons from IQRA UniversityIslamabad. He tweets @irfanchaudhri andcan be reached at [email protected]

The United States and Iran enjoyed

cordial relations from the signing

of Treaty of Commerce and Nav-

igations in 1856 till 1979 with

some retrogression in the 1950s.

But these relations between both the countries

reached all time worst condition in 1979 when

Iranians, who were frustrated due to corrupt

practices of the then powerful monarch Mo-hammed Reza Shah Pahalvi, overthrew him.

As a result of revolution, Ayatollah Ruhollah

Khomeini came into power. Khomeini de-

clared U.S. as “Great Satan”, his followers at-

tacked American Embassy in Tehran and held

52 Americans hostage for 444 days.

From Ayatollah Khomeini (1979) till

the end of Ahmadinejad’s period in (2013)

Iran and U.S.-fought proxy wars, relations saw

some progress but mostly regression. The US

imposed strict sanctions on Iranian oil trade,

banking, and travel and froze 45 billion dollars

of Iranian money belonging to their elite which

were banked in United States. Now a promi-

nent turning point has appeared in the form of

US-Iran nuclear deal.

Iran’s nuclear deal with United States

and five other world nuclear powers includ-

ing Russia, China, France, Germany and Great

Britain is a remarkable development to boost

Iran-US ties. The United States’ main purpose

of the deal is to stop Iran from developing a

nuclear weapon and nuclear enrichment. Under

the agreement, Iran will halt uranium enrich-

ment above five percent and will not install

next-generation centrifuges to enrich uranium

while it will transfer all stock of 20 percent en-

riched uranium into gas or fuel rods. In return,

Iran will receive $ 7 billion in terms of limited

sanctions relief.

Now, this interim nuclear deal among

Iran and six world powers is being seen as a

ray of hope to normalize relations between

both the countries. US analysts are of the view

that if Iran goes nuclear, regional conflict is on

the cards. US has been q uite successful in get-

ting support of five other world powers to pres-

surize Iran for coming to negotiation table and

inking a deal.

The US has a clear stance on stopping

The US-Iran

Nuclear

Negotiations

Hafiz Muhammad Irfan

Israel and Saudi Arabia are twomain opponents of this deal. Israel’sresentment is quite obvious as it isthe main rival of Iran and it wants todismantle Iran’ nuclear programme. Anuclear-capable Iran is a continuous

headache for Israel. Israel has certainreservations as the interim nuclear

deal does not question nuclearcapability of Iran.

The US Secretary of theState, Mr. John Kerry, in a

testimony before the House

Foreign Affairs Committee,

also requested not to go for

new sanctions against Iran, he

said, “This is a very delicate

diplomatic moment, and we

have a chance to address

peacefully one of the most

pressing national security

concerns that the world faces

today with gigantic implica-

tions of the potential of

conflict”.

WORLD



EB 2014 12 hp://www.economicaairs.com.pk

The above quote is crucial in com-

prehending the current position

that the United States holds re-

garding the conflictual situation

in Kashmir.

The region of Kashmir has been in dis-

pute since the independent countries of India

and Pakistan were created in 1947. The re-

gion has been the source of much tension and

conflict over the years, causing the relationbetween India and Pakistan to deteriorate on

many occasions. However, the position of the

United States on this issue is hardly known

by its citizens, nor is it widely publicized and

discussed as are the tense situations between

Israel and its neighbors. Furthermore, the

United States has not really taken a definitive

stance on the matter in spite of the existence

of groups in the region which can rightfully be

classified as terrorist groups.

The issue of Kashmir is not important

for the United States for the region itself but

rather due to the fact that it involves two na-

tions which are of strategic interest to the

United States. Before the Cold War, the Unit-

ed States viewed Pakistan as a significant Cold

War ally. At that point in history, India was

not considered a strategic partner to the United

States due to its friendly relations with the So-

viet Union. However, after the Cold War, this

situation began to change following the fall

of the Soviet Union and with the increasing

prominence and power of China. In order to

reinforce its position with China, the United

States sought to establish closer ties with In-

dia.

This historical backdrop is significant in

understanding whether the US’s Cold War era

perceptions about Kashmir continue to this day

to influence its stance on the region. If such is

the case, there is the danger of missing realities

which have arisen with the passage of time and

basing previous issues as the foundation for

current decisions and actions. However, the

Cold War perceptions of the Kashmir issue do

not seem to be the basis of the United States’

position on the issue today.

In the present day, the United States-

India-Pakistan relationship is, to say the least,

a complex one. The United States needs the as-

sistance of Pakistan in its global anti-terrorism

policy and simultaneously needs to maintain

an amicable relation with India in order to

counter the balance of China’s increasing in-

fluence in the region. Thus, The United States’

position with reference to Kashmir is essen-

tially one of neutrality based on maintaining

cordial relations with India without foregoinga relationship with Pakistan.

In 2010, when President Obama clearly

stated that the United States cannot impose

any solutions to the Kashmir issue, he rather

encouraged India and Pakistan to reduce ten-

sions by themselves for the interest of the two

countries, the region and that of the United

States. He stated that the United States in turn

would assist in any way to reduce these ten-

sions. This statement may indicate a show of

support for India as that nation has always held

the position that no outside forces be involved

in the settlement of the Kashmir dispute, de-

spite requests from Pakistan for an American

involvement in negotiations. Since both coun-

tries are of strategic value to the United States,

its position on the Kashmir issue is essentially

one of a “hands-off policy” and it is clearly

exercising a strategic balancing act in order to

not offend either side.

This position was further reiterated re-

cently by State Department spokesperson

Marie Harf who stated that India and Pakistan

need to improve their bilateral relations and

that the two countries need to establish better

relations and work together on the Kashmir

issue, further stating that the United States

remains concerned about the issues of peace

and stability in the region (without getting di-

rectly involved). The United States has there-

fore ruled out any mediation on the Kashmir

dispute.

It can clearly be seen that the UnitedStates has time and again held a neutral and

balanced position on the Kashmir issue, main-

taining that India and Pakistan are ultimately

responsible for ceasing their tensions. This will

most likely continue to be the United States’

position on Kashmir, unless of course the situ-

ation between India and Pakistan deteriorates

to a point which will cause significant dam-

age to the United States’ strategic interests or

if the region attracts a large number of multi-

national terrorists which pose a direct threat to

the United States.

Sabria Chowdhury Balland

“With respect to Kashmir, obviously this is

a long standing dispute between India and

Pakistan. As I said yesterday, I believe that

both Pakistan and India have an interest in

reducing tensions between the two countries.

The United States cannot impose a solution

to these problems, but I’ve indicated to Prime

Minister Singh that we are happy to play any

role that the parties think is appropriate in re-

ducing these tensions. That’s in the interests

of the region, it’s in the interests of the two

countries involved, and it’s in the interests of

the United States of America.”

---President Barack Obama

The Kashmir issuefrom the American

perspective

The writer is a professor of English andFrench, resides in United States. She can bereached at sc [email protected].

FEB 201413hp://www.economicaairs.com.pk

O

ver the past few months,

more than 160 countries have

launched 3G services and the

number of active 3G subscrip-

tions surpassed one billion.

Even in a small and poor country like Kiribati– situated in the middle of the Pacific with

hardly any resources and considered to be one

of the least developed countries of the world –

3G systems are being introduced to the public.

Countries from Australia to the USA are allo-

cating billions of dollars to deploy broadband

infrastructures, said Mr Jon Fredrik Baksaas,

President Telenor Group in an exclusive inter-

view with monthly Economic Affairs.

Why is the world going so crazy

for new generation spectrum?Well, the main benefit of broadband lies

in its capability as a deliverer of basic services

to citizens in an extremely non-discriminatory

way. Through applications such as e-educa-

tion, e-medicine and e-governance, to name a

few, users can easily have access to education,

healthcare and governance. These services can

be provided to all the citizens irrespective of

how rich or poor they are and how near or re-

mote they live.

One can receive healthcare through

e-medicine, where doctors can gauge your

health status via different applications and vid-

eo chatting facilities. Similarly, children can

learn and get education through multimedia

and animations that can help them understand

difficult concepts without having to rote learn

them. If a lecture is given through video call-

ing, it will be received by all, without any dis-

crimination of class, gender, ethnicity or race.

This is particularly important for those 70%

of us who live in rural areas. In that respect,

broadband is a great equalizer of sorts!

What would be the economic

benefits of 3G?The economic benefits of new genera-

tion spectrum will be huge. It will provide a

welcome stimulus for the local software indus-

try and massive potential efficiencies for busi-

nesses. This long-awaited modernization of

the mobile industry will put real money in the

pockets of ordinary citizens all over Pakistan.

Just like 2G was such an effective en-gine of growth in the last decade, 3G can also

contribute significantly. Broadband deploy-

ment will unleash tremendous opportunities

related to jobs, foreign investment, trade, and

economic growth.

Skeptics usually ask, why 3G?

Is it to enable us to watch movies

on the go?Unfortunately, a lot of people only think

of it in terms of smart phones. Although a

large amount of productive things could be

done with 3G smart phones, it is the 3G mobile

broadband on PCs, laptops and tablets that is

of real value for developing coun tries. To con-

nect these devices to broadband, USB dongles

are used. People in developed countries usu-

ally use mobile broadband in addition to the

fixed broadband, but in developing countries

mobile-broadband is often the only broadband

access available. That does not mean we use

it only for cell phones and not for offices and

homes.

Recently, you held meetings with

the President of Pakistan and

also with Finance Minister Ishaq

Dar. Which important issues

came under discussion during

these high profile meetings?Yes, these meetings were very useful.

The President, Mamnoon Hussain appreciated

the role of Telenor Group in the telecommuni-

cation sector and invited us to pa rticipate in the

upcoming next generation spectrum auction.

I briefed Mr President about Telenor Group

and that Telenor is one of the world’s major

mobile operators with more than 160 million

subscriptions. The group provides services in

twelve countries and additionally in seventeen

countries through ownership in Vimpel Com

Ltd. In Pakistan, the active subscriber base of

Telenor users is more than 32 million and it’s

retaining the position of second largest mobile

operator in the country.

Taxation and investment related issues

were discussed during meeting with Federal

Minister for Finance and revenue Mr Ishaq

Dar. I told him that the Telenor Group has

been working in Pakistan for nearly a decade

and has invested $ 2.3 billion and contributed

another half billion dollar in shape of various

taxes, besides providing employment to 3800

persons directly and over 25000 persons indi-

rectly.

Do you have any reservations on

procedure of 3G auction??About a decade ago, the auction of 2G

license was quite well balanced and was ef-

fective to boost the telecom penetration. We

expect the government will adopt similar ap-

proach for the next generation spectrum auc-

tion.

Allocating broadband frequency spec-

trum to operators is extremely urgent and es-

sential. It should have been done five years

ago. And as for the debate whether the licenses

should be for 3G or 4G, there is one answer.

The licenses should be “technology-neutral” –

let the operators decide. They certainly know

the market better.

“Telecom penetration in Pakistan

is higher than that in India and the

arrival of next generation spectrum

will boost it further”, said

Mr. Jon Fredrik Baksaas,

President Telenor Group.

Spectrum auction

can trigger

Pakistan’s economyShiraz Nizami

INTERVIEWOPINION

The writer is an Islamabad based journalist.




SBP revises Prudential

Regulations for agri nancing

The State Bank of Pakistan has issued revised Prudential Regula-

tions (PRs) for agriculture financing. The revised instructions call upon

banks to develop robust and market-oriented policies and practices to

promote enhanced flow of credit to the agriculture sector without com-

promising financial stability and banks’ risk management.

The revised regulations, among other areas, make it mandatory for

banks to formulate comprehensive agriculture financing policies cover-

ing broad areas of strategic importance, including loan administration,

disbursement and monitoring mechanisms, set-up and maintenance of

dedicated agriculture, finance departments equipped with qualified ag-

riculture financing experts and delegation of powers relating to loan

approval or sanction at the appropriate level.

Pakistan seeks $1.5 billion

under IDA-16Pakistan has asked the World Bank to commit $1.5 billion un-

der the 16th Financing Framework of International Development As-

sociation known as ‘IDA-16’ before the end of June this year to finance

projects in the energy and social sectors aimed at reducing poverty.

The issue of releasing $1.5 billion has been raised by Prime MinisterNawaz Sharif during a recent meeting with the heads of World Bank

Group recently.The prime ministerinformed the World Bank delegation

that regional cooperation needed a boost as the government intends to

start with concrete projects such as CASA1000 and regional trade with

India.

The IDA-16 was finalised in December 2010 resulting in the re-

cord replenishment of $49.3bn to finance projects over the three years

period ending June 2014.

India raises interest rates to

combat ination

The Reserve Bank of India announced 25 basis point rate hikesin

the interest rate raising it to 8 per cent. The Governor RBI, , Mr Rajan

insisted that reducing consumer prices was essential, even as he ad-

mitted that the slowdown of the country’s growth was “increasingly

worrisome”.

The decision follows the RBI’s proposal last week for a sweeping

overhaul of its ad hoc monetary policy to a primary goal of inflation

targeting. The rate decision was not welcomed in the business commu-

nity, which argued that rate rises were hampering demand and hurting

investment and therefore growth.

Ofoading of HBL’s shares

With the stage set for the first phase of privatization of state-

held entities, Habib Bank Ltd — the largest bank in the country, with a

huge Rs1.43 trillion in total assets and roughly 1,500 domestic and 43

international branches — is among those organizations that are likely

to garner much investor interest. The board of the privatization com-

mission approved the off-loading of shares of three commercial banks,

including HBL, and two energy companies. According to reports, the

government is mulling over selling up to 20 per cent shares of HBL; it

currently holds about 42 per cent of the total shares of the bank.

The bank’s management was privatized after an organization had

obtained majority shareholding in 2003-4. There are also reports that

the government intends to sell HBL shares (along with those of OGDC

and PPL) in foreign markets.

Credit line to private sector

swells to Rs230 billionThe credit to the private sector has increased to Rs230 billion dur-

ing January 2014 as compared to Rs53 billion in the same period last

year – a sign that the economy is gaining momentum.

Briefing on economic indicators, Finance Secretary Dr Waqar

Masood told journalists that the measures taken to control inflation

seemed to be on the right track since there has been a continuous de-

cline in the Sensitive Price Indicator (SPI) in the past eight weeks. The

cumulative current account deficit stood at $1.6 billion, a current ac-

count surplus was posted in December 2013 $285 million on account of

robust growth in remittances which increased by 9.5 percent on aver-

age as compared to the same period last year, Waqar said. Moreover,

exports showed an increase of 3.2 percent against 0.6 percent last year

and import increased by 3.9 percent against 0.1 percent last year. Fur-

ther, the import of machinery had also increased by 26.3 pe rcent. While

reviewing external inflows, the finance minister expressed hope that in

the coming months the situation would improve further due to the posi-

tive impact of GSP Plus.

Banks achieve 44pc agri targetBanks achieved 44 per cent of the annual target for the agriculture

loans in the first half of this fiscal year, announced the State Bank of

Pakistan. Banks disbursed Rs159.3 billion during the July-December

period of 2013-14 compared to Rs140.3bn in the corresponding period

last year, an increase of 13.5 per cent. Banks achieved 44 per cent of

their annual combined indicative target of Rs360bn despite multitude

of challenges such as high nonperforming loans, recovery drive, insuf-

ficient bank’s infrastructure and overall security and macroeconomic

conditions.

The outstanding portfolio of agriculture loans surged by Rs40.8bn

or 17.3 per cent i.e. from Rs235.9bn to Rs276.7bn at end December

NEWS IN BRIEF

2013 as compared to same period last year. The increase is mainly due

to SBP’s initiative of introduction of annual outstanding indicative tar-

gets for banks.

Iqbal Ashraf new NBP chief Prime Minister Nawaz Sharif has appointed Mr Syed Ahmed

Iqbal Ashraf as President/CEO of National Bank of Pakistan. The post

has been lying vacant since September 2013. Prior to this assignment,

Syed Ahmed Iqbal Ashraf is Managing Director/Chief Executive Offi-

cer of Pak-Iran Investment Company Limited. Ashraf has over 33 years

of International banking experience.

He has served in senior positions in the UK, the US, the Middle

East and Pakistan. Ashraf is a fellow of the Association of Chartered

Certified Accountants (FACCA) from England. Prior to joining PAIR

Investment Company Limited as MD/CEO, Ashraf served as a Group

Chief (Corporate Banking) in NBP. He is also former Deputy Manag-

ing Director/Director of Pak-China Investment Company. Previously,

he was Managing Director and Chief Executive Officer of Bank of

Khyber.

Audit into Rs480 billion

payment to IPPs soughtWith new circular debt touching the staggering figure of Rs194

billion, the senate standing committee on water and power asked for

a third party audit into the payment of Rs480 billion to independent

power producers (IPPs) a few months back. The committee directed the

ministry of water and power to apprise the body about the reasons of

increasing load shedding in the country.

Additional Secretary at power ministry Sohail Akber told the

meeting that the government had already directed the authorities con-

cerned to ensure the third party audit into the payments to IPPs. He

informed the participants that even after the payment of Rs480 billion

to IPPs, the electricity production has tumbled to 5,200 megawatts from

5,500 MW.

Sugar export to fetch $550mThe country is likely to earn around $500-550 million on export-

ing around 0.5 million tonnes of white refined sugar this season (2013-

14), industry sources told Economic Affairs.

On harvesting bumper sugarcane crop at 60 million tonnes this

season (2013-14), millers expects to produce a record quantity of around

5.826-6.00 million tonnes of the sweetener against 5.4 million tonnes

produced in 2012-13.Consequently, after meeting domestic consump-

tion of around 4.5 million tonnes, there would be a surplus of around

1.326 million tonnes of sugar.

Therefore, the country could easily export around 0.5 million

tonnes and earn precious foreign exchange. This will also result in siz-

able end stocks of around 0.8 million tonnes which could be maintained

as buffer stocks to meet any shortcoming till next season.

SECP approves futures trading

in KSE-30 indexThe Securities and Exchange Commission of Pakistan has ap-

proved futures trading in KSE-30 index in all three stock exchanges of

the country that would start soon, an official told Economic Affairs.

The Karachi Stock Exchange (KSE), Lahore Stock Exchange

(LSE) and Islamabad Stock Exchange (ISE) decided last year to start

trading in KSE-30 index but the operation of such a product was de-

layed because of the request pending with the SECP for some time.

After the crisis of 2008, the KSE started five new products to at-

tract new local investors in the market but received response of no more

than 10 percent of total traders, officials said. Badla (exchange) financ-

ing was stopped in the market involving huge amounts borrowed from

banks, which stopped giving money to small investors. Badla gave

more leverage, but was responsible for fluctuation and a be tter trading

system, Margin Trading System (MTS), was introduced, which was an

advanced type of badla with more check and balances, but a complete

trust is yet to be developed, the official said.

Dar appoints Wathra SBP

acting governor Finance Minister Senator Mohammad Ishaq Dar has appointed

Ashraf Mahmood Wathra, Deputy Governor, State Bank of Pakistan as

the Acting Governor of the central bank till further orders.

The Governor State Bank of Pakistan (SBP) Yaseen Anwar has

been directed to hand over the charge to Ashraf Mahmood Wathra,

upon close of business hours today (Friday). The federal government

on Thursday has accepted the resignation of the Governor State Bank

of Pakistan (SBP) Yaseen Anwar, as he had serious differences with the

Finance Minister Senator Ishaq Dar over the economic policies. How-

ever, the SBP has claimed personal reasons of Yaseen Anwar behind

his resignation.




LIVESTOCK

P

akistan, especially Punjab, is an a gro-livestock

based economy. Livestock & dairy sector is

the main segment of agro-economy playing a

key role in providing major source of animal

protein in the shape of milk, meat and eggs to

the consumers. In 2010-11, livestock constituted 11.5 %

of the total GDP and accounted for about 55.1% of agri-

cultural value added at the micro level. Punjab province of

Pakistan possesses tremendous resources of agriculture &

livestock, capable of meeting local and export demand of

livestock products. The livestock-based surpluses can be

exported with adaptation and implementation of interna-

tional food safety standards & certification having efficient

product traceability system covering Farm to Fork compli-

ance regime.

Effective ‘Livestock Registration and Identification

System’ is central to manage disease surveillance, report-

ing, diagnosis, control and ultimate eradication of most

fatal diseases in the country. Such system having animal

registration and identification tools for addressing animal

health (including zoonoses) and food safety issues is a

crucial part of veterinary public health aspects. Effective

implementation of the system may significant-

ly improve the effectiveness of activities such

as the management of disease outbreaks and

food safety incidents, vaccination programs,

herd/flock husbandry, zoning/compartmental-

ization, surveillance, early response and noti-

fication systems, animal movement controls,inspection, certification, fair practices in trade

and the utilization of veterinary drugs, feed

and pesticides at farm level.

As there is a strong relationship between

animal identification and the traceability of an-

imals and products of animal origin, so while

considering export regime in line with the na-

tional and international food safety standards,

the animal traceability system is pre-requisite

for the export of products from animal origin,

linked throughout the animal production and

food chain.

The establishment of animal registration

and identification system under public entity

should lead towards focused activities on pro-

ductivity enhancement, linkages development

for national and international markets by de-

claring disease free particular area, zone or

compartment. This establishment should sup-

port in management of livestock emergencies

e.g. natural catastrophes or man-made events

and also in trade for inspection and certifica-

tion activities of veterinary services, as desired

under international obligations by managing

aspects of animal husbandry such as animalperformance, breed characteristics, genetic

potential and progeny testing data.

Legal umbrella

Support with legal frame work from

relevant governmental agencies in consulta-

tion with stakeholders needs implementation

and enforcement of Punjab Animal Registra-

tion & Identification System (PARIS) in the

province. Such system should be under the

responsibility of the Veterinary Authority at

national as well as at provincial level. Thedraft of National Food Safety, Animal and

Plant Health Regulatory Authority Act, 2012

is under consideration for approval and imple-

mentation by the Ministry of Food Security

and Research, Government of Pakistan. This

draft Bill indicates the establishment of Pro-

vincial Animal Health Authorities at provinces

to cover Farm to Fork Food Safety & Hygiene

compliance for domestic and international

trade requirements. The proposed draft bill

needs to add section on Animal Registration

and Identification System in Pakistan.

Modus operandi

Animal identification is always neces-

sary for farmer/owner as well as for the state

for further development aspects in the region.

In this context, various techniques for placing

identifying marks on or within an animal’s

body have been developed for effective iden-

tification that meets these management needs

and requirements ranging from hot/cool brand-

ing to Radio Frequency Identification Device/

chip.

Ear Tags: In PARIS, the means of regis-

tration and identification of animals should be

‘tags’. Presently different tools of identifica-

tion have been developed and used like neck

tags, tail tags and ear tags. The commonest

form of external identification currently in use

is probably the ear tag. Ear tagging technology

has made significant progress over the last de-

cade and a generation of tamper-resistant and

easily readable tags has evolved that would re-

main in place for the life of the animal. Basic

requirements of registration and identification,

is to use any device to identify livestock which

satisfies three basic criteria i) it must be afford-

able, ii) durable and iii) clearly readable from

a reasonable distance. For that purpose Plastic

Ear Tags, using laser-printing techniques for

codes, visible from a distance of two meters or

more should be used.

Codes: The codes on the tags should

have unique identification numbers, ensuring

that two animals in the same identified popula-

tion do not have the same identification code

printed on them. The individual animal iden-

tity should hold its province of birth, district,

union council, and village, owner of animal or

herd with a unique animal number within that

herd or ownership.

From identification to traceability

The PARIS should identify an animal

with ear tag codes to build a traceability sys-

tem where the animal’s unique identification

in combination with movement record should

be used to provide traceability. The success of

a traceability system is a register of properties/

places which may send and receive livestock,

and a register of valid livestock identification

codes and the users to whom they were is-

sued. The recording of livestock movements

between registered holdings should be made

mandatory, and there must be means of au-

diting and enforcement of such movement

recorded under prescribed legal bindings for

livestock owners. A traceability system should

be established having a catalogue of all proper-

ties, identification codes and records of animal

movements on a computer system (database)

to be tracked by Livestock Department or oth-

er relevant governmental agency designated

for this purpose by the Punjab government.

Dr. Muhammad Rasheed is a livestock professional working for value addion inveterinary services as a trainer, facilitatorand evaluator. He can be reached [email protected]

Dr Muhammad Rasheed

Livestockregistration &

identification




ECONOMY

Public

Sector

Develop-

ment Pro-

gramme

(PSDP) aims at fund-

ing, physical & social

infrastructure and

basic services and

utilities for socio-

economic uplift of the

country. Broader ob-

jectives of the PSDPare to reduce poverty,

improve physical infrastructure, public welfare and achieving Millen-

nium Development Goals (MDGs). PSDP is generally categorized into

expenditures for projects under the heads of:

i). Infrastructure development

ii). Social sector

iii). Production sector.

Projects related to infrastructural development comprises of

roads, highways, buildings, power generation, seaports, railways etc.

In the case of Pakistan where we can observe the transportation, com-

munication and power generation is inadequate and budgetary provi-

sions can play a pivotal role in the overall production and growth in

the country. The argument by economist cannot be denied that weak

infrastructure lure finance availability. The inadequate finance affects

infrastructure development, so Pakistan is under low-level equilibrium

trap. Coming out has been a major issue for the policy makers.

Budget 2013-14 shows a significant increase in the PSDP alloca-

tions for the year. For 2012-13 the size of national PSDP was Rs 851

billion, but this year the new government intends to spend Rs 1,155

billion with an increase of Rs 35.7%. Federal PSDP has also been in-

creased by 39%. Last year it was Rs 388.407 billion and for the cur-

rent fiscal year this amounts to Rs 540 billion. In terms of corporations

PSDP expenditures the estimated budget is Rs 114.482 billion which

shows 8.1 % increase. A new head has been created this year under the

name of New Development Initiatives. Rs 115 billion have been set

under this heading which is 10% of the total PSDP budget. Summary of

the PSDP expenditures with Rs in Million are given below: Table be-

low shows the expenditures that government tends to allocate for infra-

structure development in the country under the head of PSDP programs.

Summary-PSDP Expenditures

Classication Budget2012-13

RevisedBudget2012-13

Budget2013-14

Federal Ministries/Divisions

242, 618 226,116 295,518

Corporations 80,382 105,905 114,482

Special Programs 27,000 46,386 5,000

New DevelopmentInitiatives

- - 115000

ERRA 10,000 10,000 10,000

Provinces 513,000 463,000 615,000

Total National PSDP 8 73 ,0 00 8 51 ,4 07 1 ,1 55 ,0 00

Neglected infrastructure;

Muhammad Hamza Abbas

Pakistan has huge network of canal system, but lack of government political will and no specific

budgetary allocations for modernizing the canal system in Pakistan have made the country water scarce

and its consequences we can see in severe shortage of water availability for agriculture. Mainly all of the

infrastructure development projects were politically motivated and in the best interest of the politicians

themselves, rather than being in favor of citizens. Political incentives have remained the prime driver for

many of the projects.

WAPDA (Power and Water), Pakistan Atomic Energy Commission

(PAEC), Railways, Earth Quake Reconstruction, Rehabilitation and

National Highway Authority (NHA) tend to be the biggest shareholder

of these infrastructure development expenditures. Merely development

expenditures for infrastructure might not be too helpful. Huge amounts

going into these projects won’t bore fruit unless they are being car-

ried with strong policy backing and public-private partnership for many

projects. These are the projects that are delayed due to late allocations

and many other projects for which budgetary provisions are not made.

Governments had failed to develop proper infrastructure despite several

five year plans. Many researches have proved that the country is fac-

ing huge migration issue, people are moving to urban localities and it

is estimated that by 2030, urban population would be around 50% of

the total population in the country. Projects that are aimed at providing

good infrastructure in the rural communities could have good impact

on the lives of rural communities in terms of getting access to markets,

education, health, clean drinking water, sanitation etc. We don’t see any

of the schemes in the budget 2013-14 that are aimed at providing qual-

ity services for rural communities alone.

After 1990s, there was no big investment made by the private sec-

tor on infrastructure in the country. In fact governments didn’t involve

the private sector to work for developing schemes in the country.

Pakistan has huge network of canal system, but lack of govern-

ment political will and no specific budgetary allocations for moderniz-

ing the canal system in Pakistan have made the country water scarce and

its consequences we can see in severe shortage of water availability for

agriculture. Mainly all of the infrastructure development projects were

politically motivated and in the best interest of the politicians them-

selves, rather than being in favor of citizens. Political incentives have

remained the prime driver for many of the projects. For example floods

in 2010 destroyed two-third crops in the country and many precious

lives. Even in that case government did not show any urgency to build

water reservoirs and small dams to deal with such floods and wastage of

water and crops. Some of other major projects were metro bus service

in Lahore; unlimited fly overs in Multan. Ignoring rural localities of the

provinces have slowed down the economic growth in the country.

Ignoring energy, water and communication infrastructures havebadly stalled the growth of trade and industrial activities. In these sum-

mers the energy shortfall has reached 8000 MW, which could only be

dealt with the construction of a major dam and other small hydro proj-

ects.

All this has led to making significant enhancement in cost of do-

ing business and agriculture in Pakistan. Proper development of infra-

structure would help to meet much of local demands like energy, clean

drinking water, sanitation facilities, and transportation& communica-

tion system in addition to creating many job opportunities. Apart from

that it would generate demand for more raw materials which in return

will make more income for local businesses and foreign direct invest-

ment.

The writer is a Researcher at Sustainable Development Policy Instute(SDPI), Islamabad.

ANALYSIS

PSDP-Infrastructure Expenditures Rs in Million

Budget2012-13

RevisedBudget2012-13

Budget2013-14

Water and PowerDivision (Water Sector)

47,192 45,306 57,840

Water and PowerSector (Power Sector)

29,655 34,747 51,443

Petroleum & NaturalResources Division

268 386 50

C o m m u n i c a t i o n sDivision (other thanNHA)

142 142 109

Pakistan AtomicEnergy Commission(PAEC)

39,167 44,074 52,300

Railways Division 22,877 25,832 30,965

Housing and Works 2,591 7,950 3,780

Ports and ShippingDivision

325 325 500

National HighwaysAuthority (NHA)

50,727 71,158 63,039

ERRA 3 60 ,0 00 3 88 ,4 07 5 40 ,0 00

depriving societies




Chris Tilbury

The need for humans to participate

in armed conflicts could soon be

over. The next generation of mil-

itary hardware might be able to

think and act for itself. Military

hardware will soon consist of “autonomous ro-

bots that know neither pity nor fear” — quite

a step up from the current generation of UAVs

and drones operated by humans from the safe-

ty of military bases hundreds, if no t thousands,

of miles away.

Ever since drones such as the Predator

were prepared and armed for use in Iraq and

Afghanistan in the early 2000s, stealth weap-

ons have played a key role in the West’s “War

on Terror.” It was a Predator drone that lo-

cated Osama Bin Laden in 2011, and it was a

Predator drone that launched the missile attack

earlier this month that killed Pakistani Tali-

ban leader Hakimullah Mehsud. The drones

have clocked more than 200,000 hours of fly-

ing time in Afghanistan since their inception.

Drone operators work in a safe environment,sometimes in a completely different country

to the one that the aircraft flies in. They make

judgment calls based on the situation they see

on the computer screen in front of them.

The success of the program has meant

that the US Air Force is training more people

to fly drones than it is conventional aircraft.

The legal battle over whether drones such as

the Predator and the Reaper contravene inter-

national law is still raging. The basis of the ar-

gument against their use is that actions viewed

thousands of miles away on a computer screen

can be misinterpreted and the response could

have severe consequences. That legal battle

could get a whole lot tougher with the next

generation. Future weapons will remove the

human element from the equation completely;

they will be able to engage targets by them-

selves, maximizing destruction. They will

represent the age-old saying: “Shoot first, ask

questions later.”

But what will the next generation

bring?

Of course, most next generation tech-

nology is carefully guarded and the plans are

kept safely under lock and key, but you may

have experienced the next generation of mili-

tary hardware already. If you’ve played Call of

Duty: Black Ops 2, you’ll be familiar with “fu-

turistic” military technology such as Dragon-

fire quadrotors and the AGR, or Autonomous

Ground Robot. That technology simply isn’t

that far away. Take the Lodestar, for example.

The Lodestar is a multi player kill streak that

allows the player to control missiles fired from

an aircraft flying above the map. The Lodestarwill become a real piece of military equip-

ment when the US Air Force commissions the

X47-B for an active combat role. The X47-B

is currently in the demonstration and testing

phase. It is an Unmanned Combat Air System

capable of flying over targets without human

control — think of it as similar to the creation

depicted in the 2005 film Stealth.

The parallels between the virtual and

real world don’t stop there, though. Tom

Clancy’s Ghost Recon Future Soldier also

featured future military technology. The live-

action trailer for the game included something

similar to Call of Duty‘s AGR, capable of en-

gaging targets without the need of human in-

teraction of acknowledgement. It wouldn’t be

a lengthy stretch of the imagination to realize

the people that worked on Black Ops 2 prob-

ably looked at the images of the X47B avail-

able at the time.

Step back to reality

This technology is being developed andit will be able to make its own decisions. Orga-

nizations such as Samsung and G-NIUS have

developed early versions of military vehicles

and equipment that can operate on their own.

Take G-NIUS, for example. Its website states

it is “a leading Israeli unmanned ground sys-

tems company.” They boast their technology

can provide a solution to almost any defense

situation, “whether it is 24/7, all-weather, all-

terrain, homeland security missions you are

interested in, or keeping your human assets out

of harms way and revolutionizing the way in

which your combat support and force protec-

tion tasks are being currently accomplished…

G-NIUS has the precise solutions you are af-

ter.” One of its latest creations is the Guardium

Mk.1. Guardium is an armed robotic vehicle

that employs “state-of-the-art technologies and

various combinations of payloads.” It has been

developed for deployment in closed perimeter

sites such as airports, energy plants, and bor-

ders. If you thought the G-NIUS was worrying,

Samsung’s SGR-1 will probably give pacifists

nightmares for the rest of their lives. SGR-1 is,essentially, a sentry gun created to monitor the

hotly contested Korean demilitarized zone. Its

sensors can detect a human face at a distance

of two miles and is capable of firing a machine

gun or grenade launcher without human op-

eration. The technology is also being used by

Israel to monitor its borders.

Life under robot control

Imagine a world where robots dominate

everything. There are some pretty good ex-

amples from the movie world — I, Robot, for

one, springs to mind, although that is slightly

different in the sense that the robots are used

SCIENCE & TECH

in the domestic sphere, rather than the military

one. The principle is very similar, though. If

robots replace soldiers on the battlefield, war

will descend into a game of chess where Gen-

erals will move their robotic pieces around

the board without a care or concern for what

actions are taking place. If Generals are just

moving piece of metal around a war zone, is

that not the final realization of technological

power? War will no longer be about defending

a group of people or a nation, it will be about

who has the biggest and best weapons. It won’t

matter whether removing a dictator is a good

or bad thing if his weapons are more advanced

because other nations simply won’t be able to

compete. Imagine the international arms trade

if robotic weapons entered the market. The

demand for weapons that can control them-

selves will be huge. They would be a game-

changer for nations that have been embroiled

in lengthy civil wars or armed con flicts. Take

the Taliban, for example. If they were able to

source G-NIUS robots from Israel it would

devastate Afghanistan completely, whether

western powers were still present or not.

It’s not all bad

While most military technology under

development will be used in combat situationsto kill enemies, some companies are working

on ways to make war greener. Just last week

the Pentagon was treated to a showcase of up-

coming developments by a G-4 Operational

Energy team. The team showcased a num-

ber of technologies including new engines

for Black Hawk and Apache helicopters that

could save fourteen million gallons of fuel

each year. Also on display were solar-powered

blankets and lighter, more efficient, batteries

for existing technology. Both are designed to

mean that soldiers carry less weight, although

they could also be applied to the non-military

world as part of relief efforts for humanitarian

crises and natural disasters. But what does it

all mean for humanity? Soldiers may actually

have a “use-by date.”

In 20 to 30 years, we may inhabit a

planet where foot soldiers are no longer neces-

sary and robotic equipment has replaced them.

It would be narrow-minded to jump to such a

conclusion, though. Just as the debate over the

use of the current gene ration of drones is still

raging on, that of the next generation is sure

to last much longer. Removing the human el-

ement completely is very dangerous. The list

of legal questions is lengthy and human rights

campaigners will be sure to make the process

long and arduous, and rightly so. The legal

process has already begun, even though much

of the technology is still in research and devel-

opment. A vote by the United Nations Con-

vention on Conventional Weapons has meant

a multinational team will begin to assess the

technology with the aim of enforcing a pre-

emptive prohibition before any of the technol-

ogy reaches the production line.

---The Global Research

are the not-too-distant future of

Future weapons will

remove the human

element from the

equation completely;

they will be able to

engage targets by

themselves, maxi-

mizing destruction.

They will represent

the age-old saying:

“Shoot first, ask

questions later.”




of Behavioral Sciences show that young adults

send an average of 109.5 text messages daily

and check their mobile phones an average of

60 times a day.

Psychiatrists have found that mobile

phone socialization is exclusive and interferes

or replaces interfacing with people on a much

needed social level. This tool is creating what

some experts call the “Narcissist Generation”

- those who truly believe they are so important

and popular with their thoughts that they make

themselves available to whoever needs them.

Social studies describe people with only a few

social contacts compensate for their introver-

sion, low-self-esteem, and low life-satisfaction

by using new mobile phone for popularity,

thus corroborating the principle of ‘the poor

get richer’ (i.e., the social compensation hy-

pothesis). Likewise, people higher in narcis-sistic personality traits tend to be more active

on smart phones in order to present themselves

favourable socially because the virtual envi-

ronment empowers them to construct their

ideal selves.

Mobile phone, twitter and text addiction

breeds the misplaced sense of self-importance

making the young sycophantic susceptible to

non-gainful unintelligent conversation. This

meaningless interaction is time consuming and

can displace activities of greater personal val-

ue. The new Diagnostic and Statistical Manual

V (DSM V), 5th edition, bible for mental health

care professionals, has included an appendix

to promote research of electronic gadgets ad-

diction. In practice, that would include addic-

tion to any electronic device which generates

response behavior that presents as Obsessive

Compulsive Disorder (OCD) and may be con-

tributing to Attention Deficit Disorder (ADD).

From a psychological view point, while these

devices are increasing social connectivity, they

are decreasing healthy social connectivity and

interfering with human interaction that fosters

intimacy and closeness.College survey shows that students carry

mobile phones and use them during class and

some experiments have demonstrated that mo-

bile phones distract students from learning.

Similarly studies of driving indicate that the

conversational aspects of using mobile phones

generate high risks from divided attention

and drivers using mobile phones reveal that

the cognitive distraction of conversations sig-

nificantly increase accident risk. The National

Safety Council has published a literature re-

view explaining why cognitive load from mo-

bile phones produces inattention blindness for

drivers. Studies showed that listening to music

or even to a recorded book did not produce

high accident risks, as did

conversing on mobile phones.

Legal penalties are therefore

strictly enforced where drivers

are found using mobile phones

without hands free sets while

diving.

The highly renowned

French postmodernist Jean

Baudrillard once said: "We

live in a world where there is

more and more information,

and less and less meaning”. To

move forward from this age of

being obsessively connected

through mobile phones is hav-

ing a mass amount of reassur-

ance and self-security at your

fingertips but it seems unlikely

that we could ever just cut it

out of our lives. Since there is

barrage of new options thrown

in the market by multinationalmobile phone companies pe-

riodically there remains the

increased risk of cellular ad-

diction and a lack of ‘real’ con-

nections for people and there is

no quick fix solution and there

may never be one!M

obile phone markets are

one of the most rapidly

growing markets today

due to increased competi-

tion and change. Thus, it

is of clinical interest to look at users’ buying-

decision process and the factors that finally

determine consumer choice in why they buy

expensive and different mobile phone brands.

For the same reason all but only the wealthi-

est buy status symbols. To be fair, this is just

an honest expression of incredulity, why do

people spend so much money on useless status

symbols like mobile phones, handbags, belts,

clothes and shoes and televisions and cars?

One thing that transpires is that one per-

son’s illogical belief is another person’s sur-

vival skill. And nothing is more logical than

trying to survive. We want to belong. And,

not just for the psychic rewards, but belong-

ing to one group at the right time can mean

the difference between unemployment and

employment, a good job as opposed to a bad

job, housing or a shelter, and so on. Someone

mentioned in a debate that people can be pre-

sentable with affordable options, but then the

issue is not about being presentable. Present-

able is the bare minimum of social civility

and it means being acceptable in the society

and successful in social interactions. For the

privileged ones, barely presentable is a com-

promised option reserved for the weak and

unfavorable. Presentable, therefore is relative

and like life, it isn’t fair.

It is also found that mobile phone

choice and especially usage is consistent with

respondents’ general consumption styles. The

research showed that addictive use was com-

mon among females and was related to their

trendy and impulsive consumption styles and

males were instead found more technology

enthusiastic and trend conscious. Over time

however, it is appearing now that genders are

becoming more alike in mobile phone choice,

yet individual differences in consumption pat-

terns remain obviously identifiable. Interest-

ingly, mobile phones are developing at a pace

closing in to acquire the status of personal dig-

ital assistants (PDAs) and many users tend to

be unaware of the dependence hidden beneath

their regular use.

What started out as a means of appropri-

ate social interaction has now become a status

symbol and a new age identification marker,

and it does not even have a capped material

value: it’s just a mobile phone. With more

than five billion mobile phones in use today,

the link between materialism and electronic

devices is creating a generation of learned

compulsive behavior and psychologists are

worried to analyze this substantial amount of

compulsion. Studies reported by the Journal

TECHNOLOGY

Distractions of the

Dr Fawad Kaiser

Psychiatrists have found that

mobile phone socialization is

exclusive and interferes or replaces

interfacing with people on a muchneeded social level. This tool is

creating what some experts call the

“Narcissist Generation” - those who

truly believe they are so important

and popular with their thoughts that

they make themselves available to

whoever needs them.

“Narcissist Generation”

The writer works asa consultant forensic

psychiatrist with theHUNTERCOMBE Group UK.




Sindh Province has a population of

approximately 43 million, with

nearly twenty million living in

Karachi. The health care services

are provided through the public

and private infrastructure and delivery sys-

tem. Sindh is peculiar to have a robust and

growing private sector in health that provides

services not only to the urban but also to the

rural population. Recent evidence claims the

health needs of urban and rural population in

Sindh are catered through the private sector

more than the public sector. It is supported

by the fact that the practitioners consulted for

diarrhea treatment at Private Dispensaries and

Hospitals were 78% in rural as compared to

67% in urban areas (PSLM 2010-11). Like-

wise 35% of the total child delivery cases in

Sindh occurred at private hospitals and clinics

as compared to 12 % at Government hospitals

RHCs and BHUs while 52% of ca ses occurred

at outside the institutional setup i.e. at home

(PSLM 2010-11).The reasons for the low uti-

lization of the public sector facilities can be

found in the lack of scientific management

and weak governance of these services and

facilities. On any given day, an average of 30-

40% of providers are absent from their public

practice locations (Agboatwalla 2010). The

shortage of female providers limits access for

women patients. Political patronage influences

public service commission appointments, as

evidenced by frequent transfers and appoint-

ments, even when positions are not budgeted

(Zaida 2011).

In this background, skills and strengths

of the private partners offer opportunity for

enhancing the partnerships. The province is

not strange to such partnerships. In Sindh,

90% of BHUs were contracted out to Peoples

Primary Health care Initiative (PPHI) in 2007

that offered a respite and helped increase out-

patient attendance, Ante- Natal Care (ANC)

visits, family planning visits, measles vaccina-

tions, school and community sessions, lab and

diagnostics tests (Martinez 2011). Patient per-

ceptions of quality were also higher at PPHI

facilities.

Social sectors like health require safe-

guarding the needs and rights of end- users/ pa-

tients with a focus to ensure access, equity and

quality of services. Regulating and harnessing

the private sector is critically important to pro-

tect the health of the population and is part of

the stewardship mission of the DOH and the

Partnership for

health

Dr. A K Wazir

Health Sector Strategy. Evidence is accumu-

lating in diverse settings showing that Per-

formance Based Financing (PBF) and Perfor-

mance Based Contracting (PBC) can improve

the quality and quantity of priority health ser-

vices. PBF institutionalizes a continuing cycle

of performance improvement, through routine

performance measurement and incentives for

improvement. PBF verification and contract

cycles institutionalize a process of continuing

health system improvement.

It involves Management and/or Service

Delivery of basic packages at public health

facilities from the DOH to NGOs. Equity,

quality and cost-efficiency are variably in-

cluded as contracting-out objectives.

The contract design allows public health

services for the poor by contracting basic and

essential packages of services (e.g. Essential

Service Delivery Package-ESDP, Minimum

Service Delivery Package- MSDP) from the

DOH to private registered/accredited provid-

ers and facilities. Contracting-out delivery of

essential services to private sector providers

is well-developed in high income and some

middle-income countries but not in Low In-

come Countries (LIC).

Results-based Financing (RBF) is a

family of health service purchasing strategies

that have rapidly expanded in many coun tries

in the last decade. An accepted definition of

RBF is “any program that rewards the deliv-

ery of one or more outputs or outcomes with

one or more incentives, financial or other-

wise, upon verification that the agreed-upon

result has actually been delivered” (Musgrove

2013).

Performance Based Financing (PBF) is

a restricted subset of RBF with three require-

ments:

1. Incentives are directed to providers,

not beneficiaries.

2. Awards are purely financial – pay-

ment is by Fee-for-Service for specified

services

3. Payment depends explicitly on the

degree to which services are of approved

quality, as specified by protocols for

processes or outcomes.

Models of various degree of autonomy

for hospital help increase the efficiency while

protecting the rights of the patients. The key to

this approach is decentralizing hospital man-

agement, granting autonomy, developing effi-

cient management structures and cost-sharing

financing arrangements, building incentive

structures for staff, investing in institutional

strengthening and enhancing accountability.

A key feature of au tonomous hospitals is their

governing boards. It is imperative to define

the roles, composition and appointment, pow-ers and authorities, accountabilities and spe-

cific duties of hospital boards.

Sindh PPP Act 2010 and the policy pro-

vide the legal support to the contractual agree-

ments. However the Act allows the sectors and

sub-sectors to develop specific contracts suit-

able to their requirements. Health sector need

to develop specific guidelines to safe guard the

access, equity and quality indicators to be put

in the guidelines and agreements. Likewise

the performance indicators in health sector are

very peculiar and require special attention.

The funding pattern and collaboration

between the public sector and the private sec-

tor could take any one of the following forms:

i. Public funding with private service

delivery and private management.

ii. Public as well as private funding

with private service delivery and p rivate

management.

iii. Public as well as private funding

with public/private service delivery and

public/private/joint management.

There are many un-tapped opportunities

in the public sector allocations and pri-

vate sector wealth available to provide

financial support to credible partner-ships in health.

Provincial budget allocation, Sindh

Health Strategy budget is based upon increas-

ing the provincial health budget to 8% of total

provincial budget, up to $9.5 per capita. The

largest increase in the Sindh Health Strategy

is to increase current operating budgets of dis-

trict budgets by approximately 50%, which

could be used to finance PBF.

Viability Gap Funding (VGF), the

Government will provide VGF for PPP proj-

ects that have a strong social justification but

fall short of financial viability because of af-

fordability constraints imposed on tariffs. VGF

will be an explicit subsidy that is performance

driven (based on the private service provider

achieving measurable outputs) and targeted

towards socio-economically disadvantaged us-

ers or groups of users, such as women among

others.

Project development facility, Gov-

ernment agencies in Sindh have capacity and

resource constraints and find it sometimes

difficult to develop PPP projects that deliver

value for the Government and consumers and,

at the same time, are attractive to private in-

vestors.

Social security and health taxes,

the Government of Sindh (GoS) recognizes

that social protection and provision of social

safety nets have a major role to play in promot-

ing pro-poor growth and tackling exclusion

The

Sindh

Context

REPORT




inequality. Direct provisions include

employment based guarantees (such as Em-

ployees’ Old Age Benefit Institution (EOBI),

Workers Welfare Fund (WWF), direct trans-

fers (Zakat, Pakistan Bait-ul-Mal (PBM),

Benazir Income Support Programme (BISP),

and market based interventions (Microfi-

nance). Disbursements under PBM and BISP

have been included in the budgetary part of the

pro-poor expenditures.

The large private sector is essentiallyunregulated with quality tertiary care, unsafe

unlicensed health practitioners, and hybrids

thereof (HLSP 2012). Large out-of-pocket

expenditures are the primary source of health

funding and are barrier to care causing finan-

cial hardship for most of the population.

International donors

Donor spending, currently only 1% of total

health expenditure, is estimated to increase

to equal ¼ of government spending or

11.1PKR. Philanthropic spending is estimated

to increase to 15% of current government

spending.

Corporate giving

Corporate Philanthropic spending is es-

timated to increase to 15% of current govern-

ment spending. According to an assessment

the total donations given by the corporate in

a year exceeds PKR 8 billion (Pakistan Cen-

ter of Philanthropy- PCP) in 2012. Fortunately

the 25 top companies that contribute over 75%of the donation amount operate from Karachi

Sindh. It is also favorable that most of this do-

nation amount (40%) is pledged for strength-

ening health sector.

Individual giving

Individual Philanthropy is part of the

cultural tradition in Pakistan. According to a

study conducted by the Aga Khan Develop-

ment Network (AKDN) in 1998, the volume

of indigenous philanthropy by Pakistani indi-

viduals stood at US $ 1.5 billion. This included

monetary giving (42 %), giving in kind (16 %)

and value of time volunteered (42%).

The reforms strategy spells that private

sector partnerships, including that involved

with the services delivery (not-for-profit and

for-profit) and those who contribute or have

the potential to add to financial resources (in-

dividual and corporate philanthropy), have

not been developed. Moreover international

donors have not been encouraged to come out

of their traditional bases and program focus to

invest in health needs of Sindh. Apart from the

lack of appropriate and coordinated efforts to

solicit the strengths of private partners includ-

ing philanthropists and international donors

there are following challenges that require at-

tention to strengthen the PPP processes:

• Significant capacity building of the

public health system is needed in con-

tract management.

• There needs to be great clarification

of specific management and service de-

livery responsibilities that are expected

from the contracted entity.

• The major issue with contracting outat a large scale as PPHI is that there is a

very low ex ante competitiveness (‘large

numbers bidding’), as no provider of-

fers primary health care facilities at this

scale. Generally also the ex-ante com-

petitiveness that exists in the private sec-

tor cannot be taken for granted in public

sector contracting out.

• The design as well as the implemen-

tation was exclusionary as the pivotal

office of District Health Office- DHO

(Health) had no role to play in the PPHI

contracting out model.

A few recommendations on the topic

could be:

1. To develop specific Health Sec-

tor PPP Contractual Guidelines is a

necessary initial step to bridge the gap

between PPP Policy and sectoral needs.

These guidelines will also identifyand

overcome the issues of capacity of pur-

chaser to develop and manage contract.

2. Defining the contract process and

involved steps is important to develop

capacity of the department. It will alsohelp design specific/ individual service

delivery packages according to the par-

ticular nature of the health facility and

services required by the communities.

3. It is recommended that the Speci-

men Contracts are more precisely and

clearly defined, and the scope and deliv-

erable are defined after consultation with

all relevant stake holders. An example of

the contractual agreement is appended

as annexure in detailed concept paper.

4. The contracted health facilities may

be divided into smaller sets/ clusters, for

example rather than giving all facilities

over to one contractor, several service

providers may be contracted, this would

rationalize the size of the contracted

out facilities, as well as ensure hea lthy,

post contract award, competition, thus

improving the service delivery, which

would directly benefit the people.

5. Provincial and district health admin-

istrations should change its role from

mere purchaser to a purchaser focusing

on monitoring and evaluation based on

agreed upon performance indicators and

goals. The extension of contracts should

be based on quality not just quantity of

services offered by the provider.

6. Provincial Partnership Board is

important to translate the sectoral needs

and priorities for the partnerships in

health. The Sindh PPP Policy recognizes

and leaves a space for such sectoral reg-

ulatory body to identify policy, structure

and system that promote and protect ac-

cess, equity and quality of the services.

It also will ensure credibility and trans-parency of the involved processes and

harness trust of the stakeholders.

7. Unit (Hospital) Management

Board is recommended an autonomous

board to run the operations of the unit/

hospital in accordance to the local con-

ditions and needs.

8. Capacity Building is needed to

manage Public Private Partnerships in

the department; Dissemination of poli-

cy, tools and specific skills in interpret-

ing PPP policy, instruments, role of part-

ners, conflict resolution skills, etc.

9. Developing Local/ Community

based PPP programs more holistically

and innovatively through Area based or

UC community mobilization and par-

ticipation for sustainable impacts.

10. Grant-in-Aid (GIA) a necessity

today targeted towards the poor and un-

der-served areas. Its resumption and use

in the financing the performance based

contracts.

11. Contracting out selective services

including capacity building and managementsolutions to private sector/CSOs.

12. Innovative partnerships, exploring

and developing it with industry (Pharmaceuti-

cal, Health Insurance, Private Care Providers),

education and universities for improved solu-

tions to both public and non-elite private sec-

tor.

13. Linking PPPs with training, re-

search and innovative initiatives.

The author can be reached [email protected]

When it comes to trade

relations between Indiaand Pakistan, both coun-

tries have created highly

nationalistic narratives

of why their relations are troubled. Each side

projects itself as pursuing the correct course

of action and blames the other side for being

responsible for conflict and tension in the re-

gion. Of late, the relations have suffered se-

vere strain as trade at Line of Control and bus

services are put on hold following bilateral

stand-off over narcotics smuggling.

The intransigence between these two

countries has had deleterious effect on intra-

regional trade flows within the South Asia

region. Consequently, the region remains

marginalized in regional trade integration

compared to other regions of the world.

On both sides, there are people and

groups that have made careers out of preaching

hatred against the other side. They have been

socialized into a negative narrative. However,

the hostile relations cannot be normalized u ntil

they look beyond the historical baggage and

foresee some out-of-the-box solution.

India’s immense uncertainty hovers over

the next general election, which is due by May

2014. The leading contender to be the prime

minister in India is Narendra Modi, of the BJP.

Mr. Modi is a Hindu nationalist, a modernizer

and strongman who currently runs the state of

Gujarat, bordering with Pakistan. It is believedthat Modi would be at a better place than oth-

ers in order to make compromises and deliver

a broad peace deal with Pakistan.

Despite having potential, the bilateral

trade volume between Pakistan and India is

as low as $2.7 billion. In contrast, Pakistan’s

bilateral trade with China during the last finan-

cial year (July-June) was $9 billion. However,

the volume of informal trade is said to be many

times higher than the formal trade. Legal trade

can be enhanced to $25 billion in the next 10

years through collective efforts of business

communities of Pakistan and India.

In recent times, there have been healthy

developments advantageous in resuming busi-

ness ties between the neighbors. Interestingly,

the business community on both sides is con-

vinced that liberalization of bilateral trade

would be in their mutual interest. The policy

makers also seem to have overcome their res-

ervations and a momentum has been built up

in the last several months to move the process

forward.

The breakthrough came in the form of

Pakistan’s decision to grant most favored na-

tion MFN status to India and moving away

from a highly restrictive positive list of items

that could be imported from India to a negative

list. The negative list was to be phased out by

December 2012 but there has been some unex-

pected delay due to the concerns expressed bythe agriculturalists of Pakistan.

The negative list of importable items has

been reduced from 8,000 items 1209 items.

The remaining 6,800 items can be imported

from India now. The previous positive list

only had 2,000 items. This is a significant

change whereby 85 percent of tradable goods

can now be procured from India compared to

25 percent a year ago.

Pakistan and India together make the

biggest population of the world and the larg-

est consumer market. Collectively, they can

bring lots of social and economic benefits to

their people.

Pak-India trade, good forboth countries

Manzar Abbas

REPORT




Four wars and countless skirmish-

es later, Kashmir’s reputation as

a nuclear flash point remains un-

disputed. It is a volatile patch of

land that has a recurring role in

South Asian conflicts, emotional round table

conferences, and fiery drawing room debates.

Where a partial understanding of the conflict

adds to the strained relationship, and cements

the arch-rivalry status -the long simmering re-

sentment regarding both accession and own-

ership casts a long shadow over the Indo-Pak

region.

A forensic study examines the convo-

luted plot by removing distortions from his-

torical records contaminated by sentiment and

governed by self-interest. The accompanying

voice-over addresses people on both sides of

the divide allegedly provided with skewed

statistics by their respective spin doctors. The

state sponsored palette with its dramatic ove r-

tones is quickly discarded in favor of a moreneutral grey in Christopher Snedden’s new

book that views Kashmir from a different van-

tage point. ‘The Untold Story of the People

of Kashmir’ broadens the canvas tracing the

problematic roots of a thorny issue while con-

fronting the tower of misconceptions crafted

to cloud judgment. It then sets out to deter-

mine how the people of Kashmir fared while

both Pakistan and India called dibs on their

home.

Christopher Snedden is a politico-

strategic analyst specializing in South Asian

affairs and Director of Strategic and Interna-

tional Relations at the ASIA CALLING con-

sultancy. His research is based on interviews

with politicians, bureaucrats, journalists, and

newspapers (both defunct and in circulation)

and legal documents.

Raking through six decades worth of

conflict and neglect is arguably a daunting

task. Christopher divides these findings into

two parts. The first delves into the brutal his-

tory of a strife torn land with its accompanying

string of insurgencies; the second deals with

the economic, administrative and political

side of the equation. By adding layers of cold,

hard facts to the sentimentality driven storyline, he creates a powerful counter-narrative

that allows readers to re-assess the region’s

troubling history by asking them to abandon

their sanctimonious stance.

Snedden’s sobering account is a reveal-

ing portrait that attempts to clarify the status

of Azad Kashmir, a landlocked region with a

‘poor and dependant’ economy, endless ad-

ministrative woes, its people shortchanged

by bickering neighbors and a political system

unflatteringly described as ‘a constrained,

controlled, and compromised ‘democracy’.

His book employs a fresh approach that en-

courages the marginalized people of the val-

ley to step forward and stake a claim to their

heritage. He then offers solutions to the messy

debate hoping that both nations will quit the

‘intractable bilateral dispute over J&K’ like

the British quit the Subcontinent and let ‘J&K-

ites’ run things for a change.

Every year since 1990, 5th February has

been designated as Kashmir Day as a mark

of solidarity and Pakistan’s desirability in

terms of geographic and economic reasons is

duly acknowledged but the writer asserts thatboth nations, ‘underestimated the disunited

J&K people’s deep religious differences and

strongly held, but differing, political desires,

as a result of which neither India nor Pakistan

was guaranteed majority popular support.’ He

goes on to establish that Jammu & Kashmir

- J&K, was ‘a disunited and essentially unde-

liverable entity in 1947.’

Accession, then is not such a straight-

forward matter as previously thought, since

the book calmly announces that prominent

Hindus favored Pakistan while many Muslims

did not. It also challenges fiery rhetoric used

to arm the Indian propaganda machine regard-

ing Pakistan’s interference in October 1947.

At the same time, it assigns Pakistan its share

of the blame over later events that ensured

that ‘the road to ruling Muzaffarabad passes

through Islamabad.’ The popular narrative of

invading Pakhtoon tribesmen who infiltrated

Kashmir remains in place but his investiga-

tion acquits Pakistan of fermenting ‘all’ the

unrest, and finds Pakistani’s silence to the

charges surprising, given how India used this

to strengthen its position. Blame is neatly

divided and later, Pakistan is called out for

demoting Azad Kashmir to ‘local authority’

level, rather than empowering it as a genuine

and dynamic alternative government for all of

J&K’.‘The Untold Story of the People of

Azad Kashmir’ provides valuable insight into

a sixty year old crisis and attempts to exorcise

ghosts of entitlement and bitterness that con-

tinue to haunt the region. The saga of Kash-

mir gets a revised beginning and a spruced up

middle with helpful sign posts pointing to an

alternate ending in this enlightening piece of

research that gives decades of hostility some

much needed context.

The writer is a freelance journalist who blogsat hp://afrahjamal.blogspot.com. She canbe reached at [email protected] and ontwier @Afrahjh

The untold story of the

people of Azad Kashmir

Afrah Jamal

The courts have yet to decide the

fate of huge and allegedly cor-

rupt investment in the real estate

by the bigwigs of state-managed

Employees Old-age Benefit In-

stitution (EOBI), while the Auditor General of

Pakistan surfaced another corruption case in

the same institution. The fresh revelations are

about shady deals of lands in Karachi, Lahore

and Sukkur. The EOBI officials made these

purchases at higher prices as compared to mar-

ket rates and caused loss to national exchequer

to the tune of Rs388.83 million.

EOBI is an organization meant to man-

age worker’s funds and has a vital role in

providing social security to poverty stricken

factory labors. The institution does not receive

any financial assistance from the government

for carrying out its operations. A contribu-

tion equal to 5% of minimum wages has to be

paid by the employers of all the industrial and

commercial organizations where EOBI act is

applicable. In the last fiscal year (July 2012

to August 2013), EOBI collected Rs1,609 mil-

lion from employees working in industries.

Currently, the EOBI is the custodian of a fund

worth Rs100 billion (approximately).

Despite having a huge fund of worth

trillion rupees, on the event of retirement it

gives away a paltry of Rs3,600 monthly to the

pensioners. The EOBI failed to increase the

minimum scale of pension only because of

massive corruption in the organization.

Auditor’s General report for the year

2012-13 revealed that the funds from poverty

stricken factory labors’ had huge financial ir-

regularities to the tune of Rs388.83 million

because of making unauthorized purchases of

properties at higher rates. The Auditor Gen-

eral has recommended the investigation of

these serious irregularities and the fixation of

responsibility to the person involved.

The Operating Manual of the EOBI pro-

vides that before purchase, valuation of land/

buildings shall be carried out through govern-

ment controlled consultants i.e. PEPAC, NE-

SPAK, REMCO etc. only. The audit report

mentioned two cases where the EOBI high-

ups’ made purchases at higher rates compared

to the market value.

In the year 2011-12, the EOBI manage-

ment invited bids to buy a piece of land mea-

suring 19,360 sq. yd., located near Karachi

airport. The piece of land was owned by Mr.

Deh Mehran. As a contradiction to the rules,

the EOBI hired a private firm M/s AAA Part-

nership (Pvt.) Ltd, to evaluate the land price.

The evaluation firm rated the monetary

value of land at Rs95,000 per sq. yd. The au-

dit team observed that the assessment of land

by M/s AAA Partnership (Pvt.) Ltd was only

an exercise to determine pre decided value

and was also wastage of fee paid to evalua-

tion firm. Even then the EOBI management

ignored the evaluation by a private firm and

purchased the land at Rs104, 500 per sq yard,

causing a loss of Rs 183.92 million to national

exchequer.

Still, when contacted, the EOBI authori-

ties insist that the purchase was made in accor-

dance with the rules and approved by BoT.

Another example of such malpractice

was observed in the procurement of land in

Lahore and Sukkur. According to the latest

audit accounts of the EOBI, it was found that

in response to bids invitation by the EOBI for

purchase of land, two properties were consid-

ered by the management for purchase of land

located in Lahore, measuring 01 Kanalsand 8

Marlas at Lower Mall Lahore and another in

Sukkur, measuring 2,428 sq.yards located at

Military Road. These properties were evalu-

ated at Rs84 million and Rs120.91 million

respectively. Surprisingly, the EOBI officers

did not negotiate and purchased the properties

at bid prices of Rs204.91 million, and again

made a loss to the national ex chequer.

The audit observed that the EOBI didn’t

announce the date and time for opening the

bids and the bids were not opened in the

presence of the bidders. The properties were

evaluated/assessed by private evaluation firms

instead of government controlled consultants,

like PEPAC. NESPAK, REMCO. etc.

The audit team recommended investiga-

tion of the matter for fixing responsibility on

the person(s) at fault. In recent years, a num-

ber of incidents of corruption were unearthed

in the EOBI, each of them were worth billions.

The government needs a complete overhaul to

eliminate corruption that has a very bad im-

pact on the financial health of the pensioners’

institution.

------------------------------------------------Reference: Auditor General of Pakistan’s

Audit Report on The Accounts of Public SectorEnterprises Audit Year 2012-13, Pages 154-155

Financial irregularities

snags EOBI affairsShiraz Nizami

REPORTBOOK REVIEW




REPORT

Pakistan and the Kingdom of Saudi

Arabia enjoy genealogical rela-

tions that are entrenched in com-

mon faith, traditions and com-

monality of views on all issues

of mutual interest. Pakistan and Saudi Arabia

have always stood by each other in testing

times and the people of Pakistan deeply value

relations with the Kingdom of Saudi Arabia.

Purposeful engagements during his

two days visit, Saudi Foreign Minister, Saud

Al Faisal met President Mamnoon Hussain,Prime Minister Nawaz Sharif and Adviser on

Foreign Affairs and National Security, Sartaj

Aziz to make better understanding towards

emerging regional and international geo-

political and geo-strategic issues.

Revival of joint economic

commission & joint business

council

Speaking at a media conference after

completing his engagements, the visiting Saudi

Foreign Minister said: “Saudi Arabia and Pak-

istan enjoy commonality of views and under-

standing on regional peace.” The two countries

also agreed to convene

a meeting of their Joint

Economic Commis-

sion (JEC) to discuss

the various proposals

for cooperation in trade, economy, investment

and energy. Saudi Arabia expressed particular

interest in investments in the energy sector.

The two countries decided to activate their

Joint Business Council (JBC) for increasing

involvement of the private sector.

Pakistan’s expected privatization

drive & exploration of shale gas

The government also intends to disin-vest its Public Sector Entities (PSEs), which

can be another area of interest to Saudi busi-

nessmen. The government is also working on a

new exploration policy to tap the huge natural

resources in the country especially the “Shale

Gas, the new revolution in the energy sector”.

Pakistan expects Saudi businessmen to invest

in the field of exploration that would be a win-

win situation.

Saudi arabia’s investments in

Gwadar

Saudi Arabia can also participate in

the development of Gwadar by financing or

investing in some of the areas related to Port

infrastructure such as storage, warehousing

etc. hotels, motels, travel and tourism, indus-

trial sector, seafood processing and export,

date processing and export, construction of-

fice spaces etc. in social sector and other. The

investments in oil refinery would be vital for

both the countries in the days to come.

Resumption of saudi-pak

economic commission

Pakistan Finance Minister Ishaq Dar

praised the resumption of the Saudi-Pak Eco-

nomic Commission, which was not so active

for several years. It is hoped that the revival ofthis Commission will provide a forum to both

the countries to explore new areas of coop-

eration, boosting their economic strengths and

potentials for mutual benefit and prosperity.

Pak-Saudi Arabia’s bilateral trade

According to official figures the bilat-

eral trade between Pakistan and Saudi Ara-

bia in 2012 stood at $4.7 billion out of which

Pakistan’s exports to Saudi Arabia accounted

for $456 million whereas imports from Saudi

Arabia stood at $4.29 billion.

Pakistan’s exports to the Kingdom have

more or less been stagnant during the last 10

years and have been hovering around $300 to

400 million. In 2012 Pakistan’s exports for the

first time crossed the $450 million mark.

The balance of trade between the two

countries has historically been in favor of Sau-

di Arabia, due to Pakistan’s dependence on

imports of oil and petroleum products for its

local needs, which accounts for approximately

75 percent of Pakistan’s total imports from

Saudi Arabia. Meanwhile the Saudi authori-

ties are already in the process of lifting the ban

on poultry imports from Pakistan, which will

allow the country to tap into the $400 million

Saudi poultry import market.

Prospects of Saudi Arabia

investments & pledge of saudi

fund for development

Prince Saud said the prospect of invest-

ing in Pakistan’s energy sector could be dis-cussed during the next joint economic com-

mission meeting. He pledged that the Saudi

Fund for Development would continue to fi-

nance Pakistan’s development projects. Most

recently, Saudi Fund for Development (SDF)

has announced an additional fund of $57 mil-

lion for 106-megawatts (MW) Golen Gol Hy-

dropower Project being constructed in district

Chitral of Khyber Pakhtunkhwa province. The

Saudi Fund has earlier provided financial as-

sistance of $40 million for civil works of Go-

len Gol Hydropower Project.

Moreover, the SDF has already com-

pleted 498 impressive schemes out of 585

for the community infrastructure restoration

and rehabilitation in six tehsils of disturbed

areas of Swat. According to Saudi mission in

Islamabad, the schemes completed so far com-

prise of street pavement, link roads, drainage

channels and bridges etc, and they have been

handed over to communities concerned.

Saudi concern about Afghanistan

Saud Al-Faisal said there was a need

for joint efforts to eradicate the menace of ter-

rorism. He said that international troops were

being drawn from Afghanistan by the end of

this year and efforts were required to stop the

terrorists from regrouping and filling the gap

which has been created due to the withdrawal

of international forces. He said that Afghani-

stan was going through a critical phase and a

cautious approach should be adopted to restore

peace in the c ountry especially after withdraw-

al of the US forces.

The Prince urged that its various main

stakeholders and groups should work together

and prevent foreign parties from exploiting its

poor security situation. Sharif reaffirmed that

Pakistan remained committed to facilitating anAfghan-led peace and reconciliation process,

adding that a peaceful and stable Afghanistan

was in his country’s interests.

Saudis stand with the will of

Syrian People

On Syria, Prince Saud said the irrespon-

sible statements by some international parties

would affect the success of the Geneva II con-

ference. “I'm afraid these statements are aimed

at diverting the conference from implementing

the Geneva I resolutions.” The Saudi minister

said Syria needs a new interim coalition gov-

ernment with wide-ranging powers that does

not include Bashar Assad or key figures in

his regime. Pakistan and Saudi Arabia agreed

to deepen their defence cooperation and sup-

port each other’s position on regional issues,

including Syria and Afghanistan.

Special privileges to Saudis

Pakistani Prime Minister Muhammad

Nawaz Sharif offered special privileges to

Saudis investing in Pakistan’s energy, infra-

structure, agriculture, livestock and other key

sectors.

Need for a new strategicrelationship

The prime minister met Prince Saud and

discussed bilateral and regional issues. Paki-

stan and Saudi Arabia need to enhance bilater-

al trade by holding regular meetings between

its commerce ministries, the premier said.

The prime minister said Pakistan and

Saudi Arabia need to enhance bilateral trade

to reflect the strong fraternal bonds that ex-

ist between them by holding regular meetings

between the commerce ministers to explore

ways of enhancing bilateral trade. About the

energy situation in Pakistan, the prime minis-

ter said Pakistan would welcome investment

by the kingdom in energy sector and also in

other sectors like infrastructure, agriculture

and livestock.

“There is a need to start a new strategic

relationship between our two countries to fur-

ther broaden and deepen the existing cordial

relations,” Sharif said. “Pakistan supports all

efforts aimed at strengthening unity among

Islamic countries.” The premier thanked the

Saudi government for helping Pakistani work-

ers affected by Nitaqat regulations.

Concluding remarks

Pakistan and the Kingdom of Saudi

Arabia must have joint security shield, energy

cooperation, and food security, joint strategy

against terrorism and last but not the least ex-

tremism. Above all, both countries must initi-

ate integrated efforts for bringing peace in the

region, especially in Afghanistan.

Diplomacy of Brotherhood

Saudi Arabia’s

Mehmood Ul Hassan Khan

The writer is a research scholar, specializes

in geo-polical issues of the GCC, CIs andSouth East Asia. He has keen interests incross cultural dialogue and conct resoluon.



FEB 201433hp://www.economicaairs.com.pkEB 2014 32 hp://www.economicaairs.com.pk

In the backdrop of changing geo-political

situation in Afghanistan, Russians are

evaluating Pakistan with the security

threats and eco-political interests in case

the relations take a rout back-on-track.

“If security threats are lower than eco-

nomic and political interest of Russia, then

it will develop faster, effective and striving

cooperation with Pakistan” said Anvar A.

Makhmutov, the Deputy of Committee on

International Affairs of State Duma.

While talking to Economic Affairs,

he was of the view that Russia today is no

more an ideological state but is a pragmatic

country having its own interests. Discuss-

ing the post-2014 situation in Afghanistan,

he said that stability in Afghanistan directly

and indirectly will have its impact on Russia;

therefore Russia needs to act in this direc-

tion very profoundly.

“We have had positive experience

with Afghanistan in the days when it was

stable and we are pursuing that today as

well, for example we met with their politi-

cians and tried to come up with certain

policies in building a civilized society in

Afghanistan after 2014” he said. “Moreover,

Russia in past has trained many experts in

Afghanistan who are serving in their respec-

tive fields and we are looking forward to

continue such activities.”

Commenting on the present challeng-

es that Afghanistan is also facing, he said

combating smuggling, drug trafficking are

hard-pressing issues for Russia. To curtail

this phenomenon, Russia has been pursuing

effective strategies but other regional states

also have to act along these lines effectively

to squeeze this phenomenon because a sin -

gle country is never a victim when it spreads

across borders.

Responding to a question about cul-

tural ties between Pakistan and Russia,

Makhmutov said security situation in Paki-

stan is not only hampering Pak-Russia cul -

tural interaction but it is also affecting eco-

nomic cooperation in between these two

countries. “Russian artists willing to visit

Pakistan feel unsafe” he said.

Although the strategic interests of

Russia and Pakistan are the same, despite

economic depression, Russia is among the

developing countries. Russia is in favor

of any kind of cooperation with Pakistan,

which would be equally beneficial for both

the countries, said Makhmutov.

Talking about key challenges for Pak-

Russia relations, he said that “I do not ex-

pect any direct challenges from Pakistan but

its economic component bears the brunt of

political instability in the country.”

He said that when political situa -

tion in Pakistan was stable, Soviet Union

used to build big factories and plants, even

now there are opportunities that can be

implemented, but business always follows

stability.

Recognizing Pakistan’s role in the re-

gion, he said that Pakistan holds a very ideal

geo-political and strategic location in the re -

gion where it can play a very significant role

for regional stability and trade cooperation.

Adding further, he said that the con-

cerned authorities must come up with new

projects and broad strategies which will not

only promote political relations but will also

help to strengthen people-to-people con-

tact, economic and scientific cooperation.

Russia has come with new institutions

of economic interaction and is actively en-

gaged in the regional and global security

and economic institutions like Shanghai Co-

operation Organization (SCO), Brazil Russia

India, China, South Africa (BRICS), and Euro-

pean Union. “BRICS are serious states; they

are a driving force in the global economy. I

am sure that a lot of states would like to be

part of this club” he added.

Stability in Central Asia and former

Soviet Union republics is important for Rus -

sia and we support them but in South Asia,

particularly in Pakistan, if there is develop-

ment and stability, Russia will consider it as

its strategic interest, he said.

Talking about the Russian President

Putin’s visit to Pakistan in 2011, he said Mr.

Putin’s visit was planned but postponed due

to unavoidable reasons, ‘‘I am sure it will

take place in future” he added.

Almas Haider Naqvi is an Islamabad based Journalist, pursuing M.phil research onPak-Russia Rapprochement at NaonalUniversity of Modern Languages.

Pak-Russia relations

‘Russia to fastercooperation with

Pakistan’

Alman Haider Naqvi

What people perceive, how readily they

perceive it, and how they process this infor-

mation after receiving it are all strongly influ-

enced by past experience, education, cultural

values, role requirements, and organizational

norms, as well by the specifics of the informa-

tion received. Accurate intelligence analysis

means we are usually referring to the quality

of writing, types of analytical products, rela-

tions between intelligence analysts and agen-

cies consuming intelligence, or organization of

the analytical process. Little attention is actu-

ally devoted to improving how analysts think

which the principal cerebral process demands.

Essential principal of cognitive psychol-

ogy is that individuals have no conscious ex-

perience of most of what happens in the hu-

man mind. Many functions associated with

perception, memory, and information process-

ing are conducted prior to and independently

of any conscious effort. Spontaneous reaction

in consciousness is the result of thinking, not

the process of thinking. Weaknesses and bi-

ases inherent in human thinking processes can

be alleviated by conscious application of tools

and techniques that should be in the analytical

mind-set toolkit of all intelligence analysts.

The understanding of situation gets

greatly influenced by the mind-set through

which we perceive those events. Expected

reaction of the Intelligence Analysts towards

many problems is to collect more information,

even though analysts in many cases already

have more information than they can digest.

What analysts need is mostly reliable informa-

tion from knowledgeable insiders to help them

make good decisions. Or they require a moreaccurate mental model and validated analyti-

cal tools to help them get the most out of the

available ambiguous and conflicting informa-

tion.

Heuer in his “Analysis of Competing

Hypotheses” notes, that analysts often reject

the possibility of deception because they see

no evidence of it .The possibility of deception

should not be rejected u ntil it is disproved or,

at least, until a systematic search for evidence

has been made and none has been found.

Analysts generate three principal strate-

gies which include the application of theory,

situational logic, and comparison. As com-

pared with policy makers, intelligence analysts

have more time available to “analyse rather

than analogize.” Intelligence analysts tend to

be good historians, with a large number of

historical precedents available for recall. The

greater the number of potential analogues an

analyst has at his or her disposal, the greater

the likelihood of selecting an appropriate one.

The greater the depth of an analyst’s knowl-

edge, the greater the chances the analyst will

perceive the differences as well as the simi-

larities between two situations. Even under

the best of c ircumstances, however, inferences

based on comparison with a single analogous

situation probably are more prone to error than

most other forms of inference.

A more accurate analogy for describ-

ing how intelligence analysis should work is

medical diagnosis. The doctor observes symp-

toms of what is happening, uses his or her spe-

cialized knowledge of how the body works to

develop hypotheses that might explain these

observations, conducts tests to collect addi-

tional information to evaluate the hypotheses,

then makes a diagnosis. This medical analogy

focuses attention on the ability to identify and

evaluate all plausible hypotheses. Collection

is focused narrowly on information that will

help to discriminate the relative probability

of alternate hypothesis. To the extent that this

medical analogy is the more appropriate guide

to understanding the analytical process, there

are implications for the allocation of limited

intelligence resources. While analysis and col-

lection are both important, the medical anal-

ogy attributes more value to analysis and less

to collection than the mosaic metaphor.

It is urged that organisations using intel-

ligence analysts take steps to establish a con-

ducive environment that promotes and rewards

the kind of critical thinking. It should expand

funding for research on the role such mental

processes play in shaping analytical judg-

ments and foster development of tools to assist

analysts in assessing information. Organisa-

tions and marketing agencies can rely on sharp

cognitive performance by its intelligence ana-

lysts. It is critical that they must stay abreast of

studies on how the mind works—i.e., on howanalysts reach judgments.

Although this changed view is becom-

ing conventional wisdom, the intelligence

consumer agencies have only begun to unravel

the outer core of its implications. Intelligence

Analysts can observe and get a feel for these

problems in small-group and organizational

processes which would aid in securing suc-

cessful outcome in simple and complicated

situations.

The writer is a Forensic Psychologist at

the University of York and has presented re-

search papers at International Psychiatry and

Psychology Conferences.

Shaping organizations

with accurate intelligence

Fajar Fawad

Shaping Organisations with Accurate Intelligence

OPINIONINTERVIEW

– Anvar A. Makhmutov Deputy of Committee on International Affairs of the State of Duma




dashed hopes for bumper rice production,” he said.

The U.N. Food and Agriculture Organisation (FAO) downgraded

its forecast for Pakistan’s rice production in its November 2013 Rice

Market Monitor because of the past year’s torrential rains and flooding.

In the financial year 2013-14, the FAO expects Pakistan to pro-

duce around 8.7 million tonnes of paddy - 0.6 million tonnes less than the

target of 9.3 million tonnes set by the Federal government.

Rice is sown on 3 million hectares (7.4 million acres) of land in

Pakistan. More than 1.6 million hectares have been affected by rain and

floods, according to officials in the Food Security and Research Minis-

try.

The FAO forecasts that Pakistan will have 2.9 million tonnes of

rice available for export in 2014, 3 percent less than that of 2013.

However, Raja Ali Khan Baloch, parliamentary secretary at the

Food Security and Research Ministry, argues that the country has no

shortage of rice.

“Despite the crop losses, adequate rice will still be available for

achieving export targets and domestic consumption,” he said.

Nonetheless Baloch cautioned that the country would suffer on

both fronts if extreme weather events continue and if flood-resilient va-

rieties of rice are not introduced among farmers.

A particular concern is that demand for rice in Pakistan is growing

along with the country’s population which is 180 million currently.

According to the Pakistan Bureau o f Statistics, domestic rice con-

sumption grew to 3 million tonnes in 2013 from 2.4 million tonnes in

2011, a 25 percent increase.

Commodity dealers say reports of flood-related damage to rice

crops have hiked prices on the wholesale and retail markets.

“Last year we sold the finest quality of aromatic rice for 10,000

rupees ($94) per 100 kg. But now it sells for above 14,500 rupees ($136)

per 100 kg,” said Sheraz Ahmad, a rice exporter and chief executive of

MS Enterprises in Karachi.

“Any downward change in rice production means escalation in

hunger and malnutrition,” warned Abid Suleri, a food security expert

and executive director of the Islamabad-based Sustainable Development

Policy Institute.

The possibility of a decline in production has wider economic con-

sequences too. Pakistan exports rice to countries in the Middle East, Af-

rica and Southeast Asia. After cotton, rice is the country’s biggest source

of foreign exchange, accounting for over 40 percent and worth $2 billion

annually, according to the State Bank of Pakistan.

Pervaiz Amir, an agricultural scientist and former member of the

Prime Minister’s Task Force on Climate Change, said flood-resilient

crop varieties are the way forward to a void - or at least reduce - damage

to crops that are critical to food security.

Sensitizing farmers about the advantages of these varieties is im-

portant to increase demand for them, he said.But Pakistan’s agricultural researchers have failed on this count,

Agri Forum’s Mughal said.

“Farmers have been left with no option but to sow old rice varieties

that are not flood-resistant and yield less than 485 kg rice per hectare, as

compared to improved flood-resistant varieties sown in India, Bangla-

desh, and Taiwan that yield 890 to 990 kg per hectare,” he said.

Senior officials at the Food Security and Research Ministry said

the joint venture with IRRI, funded by a $1 million grant from the Asian

Development Bank, began in August last year.

Under the project, led by the Punjab Agriculture Research Board

(PARB) in Lahore, IRRI is providing technical assistance to develop rice

varieties that can survive floods, droughts and heat waves.

PARB head Mubarak Ali hopes that flood and drought-resistant

varieties - which are now in an experimental phase - will be introduced

to farmers by the end of this year.

ENVIRONMENT

“Last year we sold the

finest quality of aromatic

rice for 10,000 rupees

($94) per 100 kilo. But

now it sells for above

14,500 rupees ($136)

per 100 kilo”

Saleem Shaikh is climate change and development journalist.

First time

in many

years,

farmer

Zulfiqar

Ali cannot afford to

sow winter wheat.

Damages to his stand-

ing rice crop from

heavy monsoon rains

last year has left him

penniless.

“My rice crop

on 18 hectares was

flattened by lashing rains in July,” said Ali, standing next to his paddy

field in Sialkot district, some 190 k m (120 miles) from Islamabad, Paki-

stan’s capital. “I have already landed in a debt trap, and my children have

been hungry for many days.”

Although Pakistan produces enough rice to meet both its domestic

and export needs, the country’s longer-term food security is at risk, as

demand for the staple crop continues to grow and increasingly extreme

weather threatens yields.

Experts say the solution lies in adopting flood-resilient and high-

yielding rice varieties, but the government is doing too little to promotethese, leaving farmers like Ali exposed to economic ruin.

Ali is now worried about how he will clear the loan of 240,000

Pakistani rupees (around $2,300) he borrowed from a moneylender ear-

lier in the year to buy his rice seed.

Some 150,000 hectares (370,000 acres) are brought under paddy

in Sialkot every year in June or July. The crop is harvested in Septem-

ber and October, and the land is then prepared for planting wheat in

November.

Farmers typically use earnings from selling their rice harvest to

meet household expenditures, clear their debts and sow the nex t crop.

But 85 percent of rice fields in Sialkot were hit by devastating

rains and floods in 2013, a ccording to Ibrahim Mughal, chairman of Agri

Forum Pakistan, a national farmers’ association based in Lahore.

“Although Pakistan (has) managed to bring more area under rice,

above-normal rains and subsequent riverine flooding in Punjab and

Sindh – where over 70 percent of the country’s rice is produced – have

to introduce flood tolerant

Pakistan prepares

Saleem Shaikh

ricevarieties




ECONOMY

contracts have recently been awarded.

In addition to this, financial services

benefited from the booming economy, grow-

ing at an annual rate of 10.5 percent with 5.8

percent in the first quarter alone. Government

and social services, together with electricity,

gas and water, all grew in line with the addi-

tional demand from the growing population.

The key driver of growth will therefore

continue to be the non-hydrocarbon sector at

least until 2015, when the Barzan gas project

is expected to start production. It is predicted

that large fiscal and current account surpluses

would provide Qatar with ample resources to

invest in major infrastructure projects, pushing

further the process of economic diversification

into a manufacturing and services hub.

According to the Global Competitive-

ness Report 2013-2014 released by the World

Economic Forum (WEF) Qatar has moved

up to 13th place in the overall rankings of 148

economies. Qatar tops the rankings in the Mid-

dle East and North Africa region.

The above table reaffirms Qatar’s posi-

tion as the regional leader. Other factors that

provided a good basis for heightening ef-

ficiency in the country include low levels of

corruption, high efficiency of government in-

stitutions and strong security.

MDP&S says that Qatar’s economy,

with the highest per capita income in the

world, is estimated to grow 6 percent during

2013 higher than the earlier 5.3 percent due

to phenomenal increase in gas production

revenues but growth will moderate to 4.6 per-

cent in 2014.

Moreover, Qatar is investing its as-

sets across the globe as it seeks to reduce its

energy dependency. In this connection, the

$US100bn-plus Qatar Holding, the foreign in-

vestment arm of the Qatar Investment Author-

ity, has been the most active of the region’s

sovereign wealth funds in recent years. It has

stakes in companies including Barclays, Volk-

swagen, Porsche, Xstrata and Credit Suisse,

which earned a 17 percent return on its invest-

ments in 2012.

Moreover, S&P Dow Jones Indices and

Morgan Stanley Capital International have

also already upgraded its “Emerging Market”

status.

Doha Bank (December, 2013)

Qatar finance ministry and Central Bank

indicate that “Qatar’s economy continued to

maintain its strong growth momentum in Q2

of 2013. Its real GDP expanded at a robust

6 percent (year-on-year), spurred by double-

digit growth in construction, transport and

communication, and financial, real estate and

business services.

The oil and gas sector only expanded by

1 percent year-on-year in Q2 2013, reflecting

the moratorium on further exploration of the

North Field. On the other hand, financial, real

estate, and business services was the fastest-

growing sector 15.4 percent year-on-year, as

banking intermediation accelerated and real

estate services were boosted by the growing

population. Construction activity accelerated

11.4 percent year-on-year as Qatar’s infra-

structure development program is gathering

momentum. In addition, manufacturing grew

by 6.4 percent boosted by production from the

new Pearl gas-to-liquids (GTL) facilities.

Acceleration in economic activity in the

second half of 2013 is expected to be driven

by the implementation of additional large in-

frastructure projects like the Doha Metro Rail

project. The key driver of growth will there-

fore continue to be the non-hydrocarbon sec-

tor at least until 2015, when the Barzan gas

project is expected to start production. The

Qatar nationals have the highest average GDP

per person in the world (more than $80,000 at

last count).

The fact points at just the tip of the ice-

berg as for Qatar’s growing economy and fi-

nancial stability.

Qatar’s National Vision 2030

Different Categories Ranking

Efficient goods market 3rd

High-quality institutional

framework4th

Stable macroeconomic envi-

ronment6th T

he Qatar’s Ministry of Devel-

opment Planning and Statistics

(MDP&S) forecasted that growth

of real gross domestic product

(GDP) during the current fiscal

year would grow by 5.3 percent. Different Qa-

tar’s official figures suggest that over the past

six years, its economy grew over five times

in size during 2002 to 2008, at an average an-

nual rate of 31.6 percent from $US19.4 billion

in 2002 to $US100.4 billion in 2008. Due to

which Qatar represents a sustained model of

macro-economic development. Due to diversi-

fied but integrated policies initiatives, constant

economic liberalization, robust service sector,

and substantial growth in manufacturing and

construction i.e. over 10 percent, the Qatar’s

macro-economy achieved 5.3 percent during

2013. According to Qatar central bank (De-

cember, 2013), its growth is expected to mod-

erate to 4.5 percent in 2014. The balance of

payments and fiscal surpluses would remain

healthy in the days to come.

The comparative study of the above,

table shows that over the past years Qatar’s

economy has undergone a huge and unprec-

edented growth. The government of Qatar

adopted a comprehensive strategy that result-

ed in building a solid and diversified economic

base meaning to decrease the dependence on

oil and natural gas and stand against the fluc-

tuations of world economy.

According to the latest World Economic

Outlook (WEO) forecasts, growth in the re-

gion will pick up from 3.3 percent in 2013

to 4.4 percent in 2014. QNB Group forecasts

somewhat higher growth of 4.5-5 percent in

2014, with Qatar leading the region in 2013

and 2014. It is the diversification policy now

that pays the dividends. The sources of nation-

al income have been further increased. The

economy’s production base has been widened.

The healthy relationships between public-

private sectors have been enhanced. Qatar has

also worked on preparing a favorable invest-

ment atmosphere to attract foreign capitals to

invest in sustainable and comprehensive de-

velopment projects, taking advantage of the

country’s stability. It is one of the ideal desti-

nations for FDIs & FPIs in the region.

Qatar Economic Insight report (De-

cember, 2013) indicates that manufacturing

remained the fastest growing sector 12.5 per-

cent boosted by production from the new Pearl

gas-to-liquids (GTL) facilities. Construction is

now booming, growing by 11.7 percent as an

indicator that the Qatar’s infrastructure devel-

opment program is gathering steam. The ac-

celeration in economic activity is expected to

be driven by large infrastructure projects that

are being implemented in Qatar including the

$US35bn metro and railway project for which

Economic ForecastsR ea l G DP N om in al GD P Infaton

2013 2014 2013 2014 2013 2014

B an k o f Amer ic a Mer ri ll Ly nc h ( May 2013 ) 5. 0 4. 9 - - 2.0 2.5

Business Monitor Internaonal (Feb 2013) 5.0 5.9 9.0 10.9 3.5 -

Ec on omi st In tel li gen ce U ni t ( May 2 013 ) 4. 7 5 .0 4 .1 2 .2 3. 1 4.0

Fitch Rangs (May 2013) 7.0 7.1 3.2 5.0 4.2 5.0

IMF (Jan 2013) 5.2 5.0 3.7 4.4 3.0 4.0

JP Morgan Securies plc (May 2013) 4.2 4.0 - - 3.6 4.9

Oxford Economics (Apr 2013) 5.0 6.0 12.9 5.4 3.9 4.3

Qatar Naonal Bank (Mar 2013) 6.5 6.8 4.0 1.0 3.7 4.1

Roubini Global Economics (Mar 2013) 5.0 5.0 - - 2.7 3.0

Consensus (Mean) 5.4 5.7 6.0 5.9 3.5 4.0

Median 5.1

5.45.1 5.5 3.5

4.0

High 8.3 7.6 12.9 13.7 4.7 5.5

Low 4.2 4.0 2.9 -1.0 4.7 5.5

Source: Qatar Central Bank (2013)

Unparalleled socio-conomic

prosperityQ atar’s

Tausif Ur Rehman

% 2013a 2013 2014

Real GDP growth 4.8 5.3 4.5

Nominal GDP

growth5.3 8.6 4.6

Consumer price

inaon3.5 3.6 3.6

Fiscal Surplus (% of

nominal GDP)5.4 8.1 4.7

Current account

surplus (% of nominal

GDP)

25.7 26.5 21.7

Source: Qatar Central Bank (2013)






Monthly Economic Affairs February, 2014

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