Commerce
The Ides of March
After the gyrations of the world economy beginning on Black Monday in October 1987, the world is passing through a relatively calm period. Stocks and shares have rebounded to their previous high levels and the US dollar has hardened against the Japanese Yen and Euro-currencies. All this has been possible due to international cooperation on an unprecedented scale. By the help of massive purchases of US dollars the West Germans and Japanese have halted and reversed further slide of the US dollars against their currencies. Due to the improvement of US export/import figures, the US dollar has been bolstered on the long road to respectability. The markets are no longer volatile though a deep suspicion remains dormant within the whole edifice. There is expectation that after 2 months and right upto the final run-up to the US Presidential election, the US dollar may weaken by as much as 10%. One can only hope that the money soothsayers are wrong because as Daniel Webster has said, “A disordered currency is one of the greatest political evils.”
Tender Shenanigans
Any public sector system must have an in-built system of checks and balances. A myriad number of Public Corporations came about because of sweeping nationalisation in 1972. That they were created in good faith and in the general public interest one is more than inclined to accept; that they have since become a source of indirect taxation on the people of Pakistan is also a fact of life. It makes it all the more necessary that a system must be designed to minimise nepotism, favouritism and corruption, that it must not become a hydra-headed monster fuelling not only inflation but also feeding on the economic potential for development by adding to non-developmental expenditure. One reason for rampant inflation is the result of erosion of honest dealing in the confidential processing of tenders for different commodities that need to be imported from time to time. An all-encompassing secrecy negates the inherent right of the public to ensure that no skulduggery takes place and more often than not, barring exceptional cases, the whole exercise of tendering becomes an elaborate exercise in public deception. In countries like Pakistan where some measure of state control is necessary, it becomes important to streamline the process in a manner that functionaries of the state cannot fiddle with it. It must be remembered that the sanctity of the tender remains till the Bids are opened and it is only thereafter that manipulations happen because of the secrecy of further proceedings.
Planning for Rainy Years
A griculture and land resources formed the major production factors in the US before the American Civil War. Though there has been a gradual reversal of roles thereafter, the predominant industrial base of the NORTH ground the vast agriculture strength of the SOUTH into ultimate submission in a war of attrition. What was true of the USA in a domestic quarrel more than a century ago has become true on a global scale as the industrial NORTH draws the largely agricultural SOUTH deeper into debt and financial apocalypse. As a symbolic manifestation of how things were meant to be, the American Civil War proved a definite point. The economy in the US is now firmly dominated by industry though US agriculture products continue to set the pace in the world market even today. Whatever may be the ills of the US economy, a combination of industry and agriculture makes it the giant locomotive that acts as a yoke for most of the economies of the rest of the world. So sensitive has the world become to any hiccups in the US economy that friend and foe alike ardently desire that no devastation a la 1929 overcomes it. Critics and cynics abound in plenty, all disparaging the US in many ways, particularly decrying many perceived ills of the economic sector, but all of them have a vested interest in the continuing good health of the US economy. The repeated crop failures in the Communist world make the COMECON countries particularly vulnerable in the ultimate irony of life in today’s times.
Re-establishing Business Morality
A system of free enterprise is meant to be just that, the absolute freedom for the citizens of the country to exercise in any enterprise of their choosing, within the laws of the land, without any hindrance from any quarter. As a statement of intention, the aforegoing is quite unambiguous and needs no elucidation of any kind, the qualification being manifest in the phrase “within the laws of land”. The creation of Pakistan embodied free enterprise as a prime working principle because the Hindu economic domination was so overpowering pre-1947, in undivided India it would have been translated into economic subjugation.
It’s the Economy
Two hundred days plus into the military regime the prime problem remains the revitalisation of the economy. Miracle men with magic wands and smooth rhetoric notwithstanding, the economy remains sluggish. Granted that the financial haemorrhaging that was the hallmark of the past political governments has been contained, client-patron relationships that have bedevilled Pakistan for over 50 years continues to flourish, one set of patrons have simply been replaced by another, the clients keep ever increasing, to their credit much slower in this regime. Except for one or two dishonourable exceptions, the khakis have remained squeaky clean. Economic initiatives taken have been enough for the manufacturing sector to show some life but nature has played a cruel hand to the agricultural sector, the backbone of the economy. There is a shortage of water in our rivers and severe drought in many parts of Balochistan and Sindh, is a potential disaster staring us in the face. We expected a bumper wheat crop, in the face of fickle nature, if at the least we do not get a reasonable one, we face a very bleak immediate future. To add to additional outlays for oil, add to that for wheat.
A season of devastation
The recent floods in Pakistan were reported to be the most devastating in the country’s history. It was preceded by a few weeks by unprecedented rains in Sindh, rendering the Province a disaster area even before the later calamity. The brunt of human and material cost for the season’s havoc and mayhem was thus borne both by the Punjab and Sindh, the only silver lining of sorts being that Sindh, to an extent, escaped the full brunt of the later floods and thus from double jeopardy. The overall collateral damage has been a grievous blow to the economy of the country, while the short-term residual effects will retard the progress of the economy.
Sindh Situation
To revive the Sindh economy, pragmatic and bold initiatives must commence with Karachi which is not only the prime city of Sindh but that of Pakistan, being its only port. Karachi remained economically buoyant during the 70s because of a construction boom fuelled primarily by expatriate funds from the Middle East. While the money for housing is still there, the lack of water and power have rendered housing starts to virtually nothing. Consequently, a large percentage of the traditional labour force is unemployed, the residual effects spiralling upwards and cutting into white collar jobs. The net result has been an economic downturn of enormous proportion that has degenerated into (1) ethnic strife as the population has increased but the economic cake has become smaller (2) deterioration of law and order as the jobless have turned to crime and (3) consequently residual political factors breeding a general state of anarchy. This has been further accentuated by the machinations of RAW, (the terror arm of India), drugs and arms proliferation, activities of armed militants of various political parties, dacoits from the interior seeking kidnap victims from richer urban areas rather than their traditional rural hunting grounds, etc. To complicate the economic scene, entire industries have shifted northwards to safer havens, deepening the unemployment crisis.