Abandoning Reforms?

By Amir Zia
The News
September 22, 2011

By pulling out of the IMF programme, the government effectively averted reforms till 2013 and got itself a free hand to take those steps which are a firm “no” from the global lenders but are seen as crucial in the election year for any political party

Should we celebrate the fact that Pakistan has managed to get rid of the International Monetary Fund (IMF) umbrella yet again and has won back its economic “independence and sovereignty” as many opinion-makers, experts and politicians have been demanding for some time? Will the decision to part ways with the IMF - considered the ultimate villain by many rightwing and leftwing pundits - bring prosperity, growth, and better days for the toiling masses? Will it put the country back on the high-growth trajectory and help reduce double-digit inflation? And does this mean that the era of IMF programmes is now over for Pakistan?

These questions remain pertinent as another IMF programme with Pakistan met a premature death due to the government’s unwillingness to deliver on the promised reforms seen necessary to end the low-growth and high-inflation cycle that has been plaguing the country for the last three years. Despite repeated promises, the government failed to deliver on any of the performance benchmarks, including imposition of the Reformed General Sales Tax (RGST), slashing the fiscal deficit gradually to below four percent and phasing out the untargeted subsidies, especially in the energy sector that cost the national exchequer a whopping 350 billion rupees in the last fiscal year.

These benchmarks were not thrust on the government unilaterally by the IMF. It was the PPP government which agreed to these reforms when it signed the Standby Arrangement with the IMF in November 2008 in the wake of a balance of payment crisis. The conditions were not imposed, but were homegrown. That is why it is called the IMF-supported programme.

Former finance minister Shaukat Tarin, who signed the deal, kept the programme on track in its initial phase. Once Tarin was gone, his successor, Abdul Hafeez Shaikh, failed to match his words with actions. The politics of expediency, bitter opposition from PPP allies, and rivals and interest groups never allowed reforms to take off under Shaikh’s leadership. Yes, there were floods and terrorism that prevented Pakistan from realising its economic potential, but these were factored in as the IMF repeatedly shifted the goal post. However, the government failed to meet any performance benchmarks, which were lowered to accommodate Pakistan’s difficult circumstances. This noncompliance resulted in the suspension of the programme in May 2010 following which disbursement of the last two tranches worth $3.7 billion of the $ 11.3 billion loan were put on hold. Since then, Shaikh and his team have made a number of promises concerning the implementation of the programme, all of which were subsequently broken. Shaikh hardly had a chance to get the stalled programme revived as doing so necessitated tough, unpopular steps such as imposing the RGST, introducing power-sector reforms and slashing untargeted subsidies. But such measures remained out of the finance ministry’s power – especially when the political masters have their eyes set on the next elections due sometime in 2013. And going by conventional wisdom, whenever electoral politics is about to gain momentum, it is not the time to take tough measures. The easy way out for the government was to pull out of the IMF programme, which it did, by announcing the decision on September 16 on the eve of Shaikh’s departure to Washington for annual talks with the multilateral donors.

By pulling out of the IMF programme, the government effectively averted reforms till 2013 and got itself a free hand to take those steps which are a firm “no” from the global lenders but are seen as crucial in the election year for any political party. This means giving subsidies and benefits to select sectors and interest groups that help consolidate a vote-bank. In the PPP case, the prime beneficiaries remain farm owners and feudal lords, who already made a windfall following the government’s controversial decision to increase the support prices of key commodities including wheat, which has a high inflationary impact.

The government’s confidence to go solo comes from its relatively comfortable fiscal position - thanks to around $18 billion foreign exchange reserves, continued flow of high remittances from Pakistanis working abroad and higher exports. Certainly, this is enough to keep the government going in the remaining months of this fiscal year and the next – in which elections are due - without facing a balance of payment crisis. If the government manages to import oil on deferred payments, it will get more breathing space.

But the real issue is not surviving from one year to the next. The real question is whether the government and Pakistan’s ruling elite want to go for structural reforms which are a must to keep the state viable. Unfortunately, there is hardly any resolve or even serious debate when it comes to pressing economic issues. No wonder even the big decision to end the IMF programme was largely ignored by the opposition. There was hardly any comment, evaluation, or criticism from parliamentarians, which underlines the fact that the economy is one issue which is not on the radar of the country’s ruling elite. Only some economists discussed the pros and cons of this decision which will have a catastrophic impact on the economy in the mid to long-term as a delay in reforms means that the country will remain stuck in a high-inflation and low-growth cycle in the years to come.

It will not just hurt the poor, the lower and the middle-income groups, but will also further erode the investment climate. It sends a negative signal to foreign investors, already wary of Pakistan in a climate in which even the domestic investors are on the sidelines and busy finding safe havens for their money abroad.

The absence of an IMF-supported programme will make it difficult for Pakistan to raise funds from other multilateral and bilateral donors, who doubt the government’s ability to run and govern the economy in a transparent manner. Indeed, the PPP government can gain political mileage in the short term by abandoning the IMF programme, but its long-term price will be paid by the people and the economy - already battered by floods, rain, terrorism, violence, political instability and poor governance.

The people of Pakistan rightly deserve an assurance from finance ministry wizards in loud and clear terms that in quitting the IMF programme, they are not abandoning the process of reforms. The civil society, economists and the political parties need to keep pushing the government to take measures to expand the tax base – that include taxing the agricultural income, controlling unnecessary expenditure and providing clean governance. Failure to do so will take us back to the IMF door sooner rather than later as has happened so often in the past.

The IMF and After

By Amir Zia
Money Matters
The News
Sept. 19, 2011

The bitter pill of IMF-supported reforms could have been the right prescription to achieve high growth and lower the inflation rate, but it meant taking unpopular decisions. For the PPP and its allies, implementing a meaningful reform agenda when elections are drawing near, could be a recipe for disaster

The government has formally announced its decision to end the International Monetary Fund (IMF) programme that has remained in limbo since August 2010 because of Pakistan’s failure to carry out the promised reforms considered vital to revive the country’s ailing economy and pull it out of the vortex of low growth and high inflation.
The timing of the announcement is significant as it came ahead of Finance Minister Abdul Hafeez Shaikh and his team’s departure to Washington for annual talks with the IMF and World Bank due later this month. The announcement shows that the government has abandoned all its plans to introduce reforms, which it promised in November 2008 while signing the Stand-by Arrangement with the IMF.
The government may boast that the decision to pull out of the IMF programme without its completion reflects the strength of the economy, but appearances can be misleading in the long-run and its implications serious for the country.
However, in the short-term, the government will be able to keep the economy afloat on the back of high foreign exchange reserves of around 18 billion dollars, continued record remittances from Pakistanis working abroad and expected high export yields. The Finance Ministry officials are not wrong when they say that Pakistan’s fiscal position remains comfortable – at least in the current financial year and perhaps in 2012-13, which will lead to the next general elections.
The bitter pill of IMF-supported reforms could have been the right prescription to achieve high growth and lower the inflation rate, but it meant taking unpopular decisions. For the PPP and its allies, implementing a meaningful reform agenda when elections are drawing near, could be a recipe for disaster. Therefore, pushing reforms to the backburner makes sense for the PPP think-tank until the hurly-burly of elections is over and the battle lost or won. Yes, the time for reform for any political government is at the start of the innings and not at its end. Ironically, the PPP did not make any serious attempt to push for reforms even at the beginning of the term, although it was PPP’s former finance minister Shaukat Tarin, who brokered the Stand-by Arrangement with the IMF.
The arrangement, revised to $11.3 billion from the initial sum of $7.6 billion, is the eighth IMF programme with Pakistan which met a premature death out of a total of nine. The only programme, Pakistan ever completed was in 2004 under the former military rule of General Pervez Musharraf when its economy was hovering in the high growth trajectory of seven percent on an average for five years in a row.
The vital goals under the IMF’s Stand-by Arrangement included the imposition of the integrated value-added tax (VAT), cutting down the budget deficit to 4.2 percent and below and scrapping all the untargeted subsides, including the ones given in the power sector. The programme had two objectives – “to restore macroeconomic stability and confidence through a tightening of macroeconomic policies; and to ensure social stability and adequate support for the poor and vulnerable in Pakistan.”
But the PPP-led government dragged its feet on all these fronts due to political considerations and opposition by strong vested interest groups, who were duly backed not only by the key opposition parties but even those in the ruling coalition. The initial goals agreed with the IMF were revised and readjusted scores of times, but the government still failed to achieve any one of them.
The strong resistance by businesses and traders forced the government to abandon its half-hearted attempts to impose the proposed VAT, and on paper got it replaced by a diluted reformed general sales tax (RGST). Then even the RGST plan was dropped, though the government promised to get it going by October 1, 2010. The government’s failure to impose the RGST simply means that all the plans to expand the country’s narrow tax base have been shelved – yet again. The powerful lobby of feudal lords, who like their fiefdoms also dominate parliament, effectively torpedoed the demand of taxing agricultural income. Thus, Pakistan has to remain contented with its slim nine percent or so tax-to-GDP ratio, which is among the lowest compared to economies of our size and even smaller in Asia and our own region.
The budget deficit target has been eluding the government from day one because of its inability to raise revenues and cut expenditures. During the last three fiscal years, the budget deficit has remained on the high side of six percent and above against the initial targets of 4.2 and below. Most economists call high budget deficits the “mother of all troubles” for an economy, which results not just in high inflation, but also macroeconomic instability. Curtailing the deficit is seen as a must to eliminate the financing of government expenditures by the State Bank of Pakistan (SBP). The heavy public financing by the SBP and other commercial banks fuels inflation and crowds out the private sector from the credit chain – as has been happening since this democratically elected government came to power in early 2008. No wonder that Pakistan’s public debt has soared to more than 11 trillion rupees at the end of the last fiscal from 4.8 trillion in June 2007.
The federal government has also failed to broker an agreement with the provincial governments that they maintain fiscal discipline – which remains necessary to the overall lowering of the budget deficit.
One of the key steps, which the government had to take to lower expenditure, was phasing out the energy subsidies. The power sector subsidies and losses cost the national exchequer around 350 billion rupees in the last fiscal year. According to the IMF programme, the reduction had to be achieved with the assistance of the World Bank, but courtesy the vested interests, Pakistan’s power sector continues to bleed because of the rampant electricity theft and distribution losses of up to 35 and 40 percent.
The election fever, for which political wheeling and dealings have already started, is unlikely to give any space to Finance Minister Shaikh to take any firm measures to lower budget deficit, curtail government borrowing, slash power subsidies or to expand the tax base. At the most, he will try to remain glued to the wicket and keep the economy floating in a run-up to the elections or worse he may quit – though the chances are unlikely – as his predecessors have done.
But what will be the implications of the government’s decision of walking away from IMF and not implementing reforms?
The worst part is that Pakistan is all set to remain stuck in the low growth and high inflation cycle for another three to four years at least –as the government has failed to take measures to turn the tide. This means that the poor will sink deeper into poverty on the one hand while on the other, more people will be joining their ranks because of unemployment, lowering of income and erosion in the purchasing power of the rupee – which will hit people with a fixed income the most.
Abandoning the IMF programme will also make it difficult for Pakistan to raise funds from other multilateral and bilateral donors.
At a time when even domestic investors are not betting on Pakistan's economy and have put investments here on hold or have redirected them to other parts of the world, the government’s decision to say “goodbye” to the IMF will shatter their confidence even further. Similarly, it will be much harder to lure foreign investors in an environment where they are already staying away from Pakistan.
The decision will prove a blow to the country’s privatisation programme, which remains stalled since the PPP government assumed power in early 2008. It is a bad omen because it means the loss-making public sector utilities will continue to remain a huge drain on the economy.
Pakistan economy is all set to remain in a mess and brace itself for tougher times in the mid- to long-term in the absence of an IMF programme and monitoring which helped the country’s financial managers to stay on course and resist the demands of their political bosses. But clearly, for the ruling coalition, elections are more important than the country’s long-term economic interests.

Rain Havoc

By Amir Zia
The News
September 15, 2011

This annual rain mess in Karachi remains a management disaster, reflecting the lack of planning, vision and indifference of successive governments, which have collectively failed to give this city even a proper drainage system

“We live in Karachi in a world removed from reality... For instance, it is our conviction that it does not rain in Karachi. That it has never rained in Karachi. That it will never rain in Karachi. Everything in this city is anchored to this conviction. The roads, the drainage systems, power, telephone and telegraph cables... Despite our bravado, we are, I feel, victims of a misunderstanding with nature. For it is not at all true that it does not rain in Karachi. And when it does, it pours. The roads are flooded, some are washed away. Power fails. Telephones do not work. Cars and buses are stranded... This happens every time it rains in Karachi.”

Omar Kureishi, one of the finest journalists, writers and broadcasters of his times, wrote these lines more than five decades ago for a publication called “Pakistan Standard”. It is part of Kureishi’s first book – Black Moods, published in 1955. If this article, titled “Rain” were reproduced with the omission of a few lines on the sufferings of refugees in the downpour, it would seem as if the late writer penned his thoughts in today’s Karachi.

Yes, when it comes to rain and its aftermath, not much has changed in Karachi since the early 1950s – we see submerged roads, stranded vehicles, open manholes, overflowing gutters and broken power cables. And we see the callous attitude of the country’s high and mighty and the sufferings of commoners who dangle from buses in heavy rain and wade their way for miles through knee-deep water to reach their homes. The unfortunate ones die when they step on a snapped power cable or an open sewer, while the fortunate ones arrive home to narrate their ordeal with a sense of pride. For, now being safe in Karachi is also an achievement.

If in the 1950s, the McLeod Road and the Drigh Road used to get inundated, in 2011, their fate has not changed despite the change of names to I I Chundrigar Road and Sharae Faisal. In fact, the situation is now even worse thanks to population explosion and manifold increase in the traffic.

Most major roads and streets of the city – whether new or old – have been flooded with rain and sewerage water with only up to a maximum of 140 millimetres of rain in some parts of the city in two days. This is hardly a downpour to deluge a city and cripple normal business and industrial life. But in Karachi it does.

Representatives of industry, business and trading communities say that they suffered accumulated losses worth billions of rupees in lost working hours and due to the fact that rainwater immersed many of their warehouses, shops and factories.

The same roads and areas get flooded in rains year after year even in the main commercial and business districts of the city and where government offices and buildings are located. Even Chief Justice Iftikhar Chaudhry got a taste of Karachi rains when his car got stuck in the water. He had to abandon his vehicle and take another to reach the Supreme Court.

Can one get away by calling the rain havoc in Karachi a natural disaster? No, definitely not. This annual rain mess in our city remains a management disaster, reflecting the lack of planning, vision and indifference of successive governments, which have collectively failed to give Karachi even a proper drainage system.

The city, which contributes almost 68 percent to the country’s revenue collection, always lurches back to normalcy on its own and the resilience of its citizens rather than steps taken by rulers to alleviate their sufferings.

Poor governance, clash of petty interests, a confused mindset and corruption are manifested at every level. The empowered local governments can help resolve the festering civic problems in a far better way, but we have turned them into a controversial political issue. We continue to debate and argue over the merits and demerits of the system and keep changing its laws. The lack of centralised command in Karachi is also responsible for most of its civic problems. There are seven cantonment boards, which operate independent of the city district government. This is the greatest obstacle in taking a holistic approach for the development and planning of the city and its infrastructure.

The rain havoc could have been mitigated if the local authorities had taken the trouble of dredging the sewerage and storm water lines in time and removed encroachments blocking the natural and manmade waterways. But we are more tuned to shedding crocodile tears after every mishap brought about by our own doings.

Veterans like Kureishi have written a mountain of words. Minor writers like me continue to add to the pile after every rain. But there are many unpleasant issues and topics which never change in this land of the pure. And one of these constants for this generation – as it was for Mr Kureishi’s – and perhaps for the future ones too, is the crumbling and non-functioning drainage system.

The rainwater will subside in the coming days and the sun will shine again. Life will be as normal as it can get in a city like Karachi, but come another rainy season and it will be the same old grind.

Two Worlds

By Amir Zia
Weekly Money Matters
The News
Sept. 12, 2011

As politicians heap scorn on one another and fan emotions, establishing the rule of law, bringing peace and stability – all vital to get the economic activities going –are not even part of their discourse

Springfield –a small, rural town of less than 3,000 inhabitants in the US state of Kentucky – is trying to attract and retain workers, investors and entrepreneurs not only from its own Washington county but also the neighbouring ones so that it can serve as a regional economic and agricultural hub. Lush green meadows and acres and acres of corn and tobacco fields, dotted by family-run wineries and horse and cattle farms, remain the backbone of its economy. Here, the local government welcomes and facilitates people from other regions to set up new business ventures and establish trade links with locals. The aim is to boost the home market and products in these challenging economic times when there remains a tough competition to attract investment and businesses.
Louisville, the largest city of Kentucky, located at about an hour’s drive from Springfield, replicates the effort of attracting human resource and investment on a grander scale. The local authorities of this city –the hometown of Muhammad Ali, the cultural icon and champion boxer of the 20th century – have launched an innovative talent attraction programme called the Greater Louisville International Professionals (GLIP). It targets foreign talent to come, work and live in this city of around 700,000 people and showcases Louisville as a “welcome and inclusive city of possibilities.” So far, the GLIP– launched in 2009 –has representatives of 94 countries, which includes Pakistan. These representatives, called ambassadors, serve as point persons and resource for their respective countries and help new international residents acclimate to Louisville. GLIP has more than 800 online members and database of 2,700 foreign-born professionals, executives and entrepreneurs, international academia and local business executive and recruiters, who work internationally.
Concerns about global terrorism make the process of getting a visa and immigration to the United States slow and cumbersome – an issue which the local authorities have taken up with their federal government. However, international talent continues to trickle into this “land of opportunities.” The high US rate of unemployment – recorded at 9.1percent in August 2011 – the recent debt crisis that resulted in the downgrading of the credit rating of the US government’s bond for the first time in the country's history, and the sluggish economy, fail to deter people from pursuing the American Dream.
Many American economists, planners and the man on the street believe that the current difficult economic phase will pass as it happened during the Great Depression (1929-1941) and the inflation woes of the 1970s. They see that 10 to 30 years down the road, the United States would need a vast talented pool of human resource and investment – and the foundations for which are being laid today. No wonder that from a small rural town to a mid-sized city and to the state level – efforts at every tier appear in one direction.
In the globalised world when regions, countries, cities, towns and villages – each in their own respective spheres compete with one another to attract talent and capital – this vision and strategy is vital for success. Prospering economies around the world are following it – from the Far East to Middle East and Europe to the United States. Even our South Asian neighbours including India, Bangladesh and Sri Lanka, are on a road to progress and trying to integrate themselves into the region and the globalised world.
On the contrary, in Pakistan, we do our best to scare away potential investors and threaten and rob those who happen to be here. Let alone foreign, even many local investors are being forced to shut businesses and look for other options. A number of educated and professional Pakistanis are looking for an escape route from this land of the pure. Political instability, inconsistent policies, terrorism, crime, insecurity, extremism and corruption –all have made Pakistan unlivable and an international pariah despite the fact that the country offers a vast market of around 180 million people, tremendous natural resources and a pool of talented and hardworking people, including highly educated professionals.
The lack of vision is reflected at every level. Many of our regional politicians see workers even from outside their province as a threat, let alone trying to attract talent and investment from abroad. Balochistan is a case in point, where there has been a systematic campaign of terror and violence going on against people who are being dubbed as “settlers,” though many of the victims have been living there for generations. The lawlessness in Balochistan has halted all the exploration and drilling for new hydrocarbon resources for years now.
The small port city of Gwadar, seen as an investor’s dream and a happening place only a few years ago, has lost its steam. The reason: terrorism and violence that spring in the region from the misconception that the local population will lose rather than gain because of the influx of outside talent and resources. While successive government can be criticised for their failure in removing this fallacy, local politicians, too, remain unable to see the opportunity and find ways to become part of the development and act as a catalyst for progress in the larger public interest. The parochial tribal mindset and unimaginative and rigid bureaucracy and officialdom in Islamabad have been unable to build a consensus and find a way forward.
A couple of years ago, while interviewing a prominent nationalist leader, who was railing against the supposed threat of outside workers and investment to the local population, I could not help but saying that his political position appears against the global trend and makes no economic sense. His prompt reply was that his province was no Dubai, Singapore or Malaysia nor does he want it to become like them. The irony remains that the children of this politician studied at an expensive private English-medium school in Karachi, but having similar institutions in places like Gwadar or Turbat, which can attract students from across the country, was not part of his agenda, vision or political discourse.
Coming to Karachi, the country’s economic and industrial hub and once our own local city of opportunities and dreams, we see that it has been brutalised to its core. This megapolis still draws workers from all over the country, but its economic pace and rhythm has been broken – thanks to the political mafias which patronize extortion, kidnapping for ransom, robberies and all the other sort of crimes. As these mafias fight bloody turf wars and torture and kill rivals, it is economic activity which has taken the biggest hit. Many of the established businesses are struggling, while new investments remain on the hold. Many small, mid and large players have shifted to other places, even abroad, and many more plan to join this exodus as every part of the city has become unsafe and insecure.
As politicians heap scorn on one another and fan emotions, establishing the rule of law, bringing peace and stability – all vital to get the economic activities going –are not even part of their discourse. We have started to look at one another with suspicion and distrust –both individually and collectively, divided along political, ethnic and religious grounds. Instead of creating economic opportunities, we are bent upon destroying them brick by brick. Political parties, the government, and the state institutions – all have failed to rise to the challenge and provide the vision which brings back peace and puts economic development and progress back on the agenda. As the world moves forward, the parochial mindset is slowly but surely stifling the country at every level.

Destination Pakistan

By Amir Zia
Money Matters
The News
Sept 5, 2011

The Commonwealth Business Forum offers a unique platform where the government can reposition the country as an attractive, investment-friendly place

Packaging and selling Pakistan as an investment, trade and business destination at international forums has never been the strength of our successive governments. Whenever we interact with the outside world on global or regional platforms – be it the United Nations, Commonwealth, Organisation of Islamic Conference, or the South Asian Association for Regional Corporation (SAARC) – the focus, by and large, remains more on politics or highlighting the protracted conflict of Kashmir with India, rather than the economy.
Permanent state interests, indeed, cannot be ignored and should remain part and parcel of any international engagement, but at the same time Pakistan needs to broaden its canvas and use foreign relations as a tool to advance its economic interests. In today’s competitive, globalised world, both the developed and emerging economies are vying hard to attract investment, the best possible human resource and opening trade and business avenues for their products. However, Pakistan has been found lacking on these fronts due to its lingering political instability, internal conflicts and the war on terrorism – which have held back its enormous economic potential.
The situation has especially been challenging since the Pakistan Peoples’ Party (PPP) government took power in 2008 as it not just struggled to give a clear economic vision, but failed even to keep its economic team intact. No wonder, there has been a steady and steep decline in both local and foreign investment as Pakistan’s economy remains stuck in a low growth and high inflation cycle for the last four years after witnessing a robust economic growth of around 7.0 percent from 2001-07.
While on the domestic front, the government needs to take tough decisions in line with the International Monetary Fund’s stalled programme that includes doing away with untargeted subsidies, expanding the tax-base, carrying out power sector reforms and reviving the country’s stalled privatisation programme, on the international front, it needs to aggressively market and sell Pakistan as an investment, trade and business destination.
The coming Commonwealth Business Forum (CBF) scheduled for October 25-27 in Perth Australia, offers a unique platform, where the government can reposition Pakistan as an attractive, investor-friendly country and try to refocus the international community’s attention on opportunities here, moving away from the narrow prism of extremism and terrorism.
"The CBF aims to deliver $10 billion in business deals," said Arif Zaman, Commonwealth Business Council’s advisor on South Asia and Corporate Governance. “Pakistan should also aim to get a slice of it.”
The Commonwealth Business Council has sent Zaman, a British national of Pakistani origin, to Pakistan for an extended stay of six months in the build-up to the CBF and the Commonwealth Heads of Government Meeting set for October 28-30.
Prime Minister Yousuf Raza Gilani also plans to participate in the meeting with a high-powered delegation comprising government officials and leaders of the country’s business and corporate world.
“The CBF will provide a unique opportunity for both businesses and governments to learn from more than 100 distinguished speakers and panelists, including heads of governments, finance ministers and businesspeople,” Zaman said.
The forum will allow participants not just to meet and discuss trade, investment and partnership opportunities and prospects, but develop new business leads and identify trade and investment partners, he told Money Matters in an interview.
There will be opportunities to conduct and conclude business deals in one-to-one meetings, build networks, influence the global debate on important trade and investment issues and contribute to policy recommendations to the Commonwealth heads of the government, added Zaman, who has also authored the bestselling briefing on “Reputational Risk” in 2004.
Zaman said that after a long gap Pakistan would participate in the meeting of heads of governments of the Commonwealth as a full-member.
“The good thing is that issues relating to military rule and democracy (in Pakistan) are no longer on the agenda. This creates space to talk about other things, especially the economy and investment.”
After the United Nations, the Commonwealth is the largest grouping of countries, comprising 54 members. It remains the only organisation -- outside the UN itself -- to transcend regional organisations and bring together North and South.
According to a handout of the Commonwealth Business Council, which is organising the CBF, the member countries of this forum now account for 20 percent of world trade and some of the fastest growing economies in the world are part of this association, including Australia, Canada, India, South Africa and the United Kingdom.
“Over four trillion dollars in trade happens every year within the Commonwealth and its combined GDP nearly doubled between 1990 and 2009,” the handout said.
Zaman, who has been meeting government officials and business leaders in Pakistan in an attempt to ensure their maximum participation in the forum, said that Pakistan has been invited to chair a roundtable discussion with key business leader on opportunities in the country.
“This is one of the most supportive developments to have come from the Commonwealth since both Pakistan’s return as a full member in 2008 as well as since the current government in Islamabad took office,” he said.
“A special session on South Asia will bring together the Jang Group and The Times of India to talk about the award-winning Aman ki Asha initiative on Pakistan and India and the progress made by business leaders of both countries.”
The Aman ki Asha initiative was launched by the Jang Group, Pakistan’s biggest media group, and the Times of India Group in January 2010 as a campaign for peace between nuclear-armed Pakistan and India which are uneasy neighbours and have remained locked in a protracted dispute over the divided Himalayan region of Kashmir. The two nations have fought three full-scale wars and one mini-war on Kashmir since their independence in 1947.
The peace campaign has evoked huge interest both in the region as well as abroad and helped strengthen peace lobbies in both the countries.
Zaman said that India and Pakistan remain the two biggest member countries of the Commonwealth in terms of population and the association wants to help facilitate efforts for peace at a time when both New Delhi and Islamabad have resumed peace talks.
The Commonwealth document says that the CBF is taking place at a critical time when the developed world continues efforts to secure recovery from the recession and tackle challenges of maintaining open markets and when emerging markets are enjoying a greater prominence on the world stage than ever before.
“At a time of growing interest in emerging markets, Pakistan should not underestimate but underline the opportunities the Commonwealth now provides for making the case and building the community for doing business here… No other forum brings together such diverse countries in order to do business.”
Zaman said that the Commonwealth Business Council looks forward to a significant presence from Pakistan at CBF and remains keen to work with stakeholders to make an intensive and extensive participation at this platform.
According CBF, it presents a unique opportunity for Pakistan on three levels. The first, an opportunity for increased trade and investment between Pakistan and Australia including but not limited to the dairy, infrastructure, energy, mining and education sectors.
The forum also gives Pakistan a chance for increased trade and investment in key Commonwealth markets where the Pakistani companies can leverage existing relationships and reach.
“There is a cost advantage to Pakistan of trading with the Commonwealth that many business people, policy makers and media may not fully realise.”
It also provides an opportunity to build the case for visiting Pakistan and doing business here in the coming months and for people to see for themselves the potential that Pakistan offers in established and emerging sectors and develop business relationships.
“A proposed international investment forum in Bhurban involving the Board of Investment in early December 2011 provides a tangible and early opportunity for Pakistani participants in CBF to extend to people they meet in Australia.”
Zaman said Pakistan never fully leveraged its membership in the Commonwealth. “Pakistan does not have to buy space, but sit in its place. It has got a platform,” he said.
This is an opportunity not only for big businesses, but also for small businesses, including women entrepreneurs and rural representation.”
The Commonwealth forum, undoubtedly, offers the government a chance to bring Pakistan and its economic potential back on the world stage. Let’s hope we make the best use of it.