Blog Archives
The Credit Squeeze (or Scam)
Anyone darkening the doorstep of a financial institution nowadays looking for credit is usually informed that the “ceiling” has “burst” meaning that the bank’s lending limit has been exceeded. In the case of foreign banks who have limited credit ceilings and blue-chip corporate clients, this is an understandable reply, the response of the nationalised banks becomes intelligible only when you begin to understand the deep-rooted nepotism and cronyism practiced in the higher echelons of these financial institutions.
An Economic Plan for Sindh
The growing polarisation between the populations of the major urban centres in Sindh compounded by the deteriorating law and order situation calls for drastic changes in conceptual planning for economic emancipation. This is the PM’s main electoral base, escalation in the level of violence will not be conducive to either economic progress or democratic rule. She has to take firm steps to contain the law and order situation from becoming worse, the government must look at economic means for long-term solutions for the Province as a whole.
Economic Exploitation of the Coastal Areas – II
At Gwadar, a Belgian company is engaged in the construction of a Fish Harbour for US$ 45 million provided mostly under Belgian Grant/Soft Aid. A telephone and telegraph facility based on DOMSAT satellite has recently been inaugurated. The fish catch in the area will justify the size of the facilities, the harbour when constructed can also easily accommodate naval vessels, more importantly it can be easily expanded to cater for larger vessels. The works parameters may be expanded so that benefit is derived from present construction mobilisation. Placed just outside the Gulf, Gwadar has strategic importance, it is a natural staging port for the Gulf in case war between Iran and Iraq should ever break out again, a distinct possibility. Supertankers may not be able to go into the Gulf this time with Iranians better equipped to interdict them with naval forces.
Economic Exploitation of the Coastal Areas – 1
Since independence, Pakistan has been dependant upon only one Sea-port, Karachi, for its maritime communications. Most of the industries came up in Karachi because of the port or in the vicinity. From little more than a sleepy fishing village at the beginning of the century (population 100,000) to a population of about half a million in 1947 rising to the present level of 9 million, the city of Karachi has outgrown all possible permutations and combinations of socio-economic infrastructure and facilities, causing tremendous social and economic strain on the city’s masses. While over-population has been bad enough, the amalgam of various ethnic groups drawn to the city either as refugees from India or in search of employment from up-country has created social unrest, the various groups competing for economic dominance. This has been further exacerbated by different waves of refugees from Burma, Iran (pro- and anti-Shah), Afghan Refugees and a large influx of Bangladeshis as domestic help (and now, industrial labour).
Year of the Economy
The past year has seen a pragmatic approach to the handling of the economy by the PPP Government, it has succeeded in at least slowing our abysmal slide towards economic apocalypse. Ms Bhutto was voted into power by a mixture of positive and negative support generated by her undeniable charisma, enduring adulation for her late father, widespread resentment against the years of martial law and the economic aspirations of the people fed on populist slogans. However, early on in her administration she modulated the known stance of the PPP manifesto and resorted to judicious airing of populist slogans for mass audiences only. To select audiences mainly entrepreneurs petrified at the memories of the earlier PPP regime’s penchant to nationalise everything in sight, she made known her rightward shift in ideological preferences, sweet manna from heaven for entrepreneurial ears, a shot in the arm for private enterprise.
The Year in Retrospect
Prime Minister Ms Benazir Bhutto has recently held marathon sessions with her ministerial colleagues reviewing the performance of each ministry in some detail. This is a welcome exercise and if she can take incisive action, cutting through the smokescreen that the bureaucrats are capable of manipulating to cover their misdeeds and shortcomings, sometime making their nominal masters, the various ministers unwitting collaborators, we are going to have measure of accountability, performance-oriented maybe but a start nevertheless.
De-congesting Traffic in Karachi
All major cities in the world face traffic problems but the problems of the city of Karachi are unique, mostly they stem from extremely bad town planning. Except for Islamabad where some order is apparent there is a visibly disorganised pattern in all the cities of Pakistan of hasty growth and bad planning, hopelessly misconceived to suit vested interests.
State of the Economy
A year into the PPP’s ascent to Federal power, it is time to take stock of the economic health of the nation. While the effect of long-term measures cannot be visibly discernible during this short period, the economic indicators are more apparent and a coherent picture emerges of the performance of Ms Benazir’s Government.
How to Attract Investment
he Federal Government has recently launched a major investment effort in the public sector, this is in utter contrast to the recently (and oft) stated intention of the PM to go in for privatisation of the nationalised industries. The question arises, is this a major shift of policy, a volte-face on earlier pronouncements or is there more to it than meets the economic eye? On the face of it the Federal Government’s machinery is emanating conflicting signals, not surprising that along with other “encounters of the strange kind” we have been blind-sided by them. Mr Ali Nawaz Shah, Federal Minister for Industries, accompanied by Mr Tariq Sayeed, President Federation of Pakistan Chambers of Commerce and Industry, and a high level delegation visited the US to solicit foreign investment in late August this year. Widely reported in the business media, he reiterated PM Benazir’s avowed intention to go the Thatcher route, her Ambassador-at-Large, Happy Minwala, has been negotiating happily and willy-nilly with investment banks (Rothschilds in particular) along with other consultancy firms in the UK to devise ways and means to accomplish such an eventuality. On the other hand, Raja Shahid Zafar, Federal Minister of State for Production, has uncovered a series of initiatives in the public sector which must have been some time in the works and could not have been plucked out of thin air. It would be interesting to note where the money is going to come from, rich Arab uncles are running scarce (and scared) these days!
Reorganising the Banking Sector
Third World countries that aspire for economic prosperity have to ensure that their financial sectors are adequately equipped to fuel sustained growth. Financial institutions are the bedrock on which to plan the building of industry and commerce in a world perennially short of development funds, lately Less Developed Countries (LDCs) are concentrating their energies on revitalizing this sector. In Pakistan, we pay a lot of lip-service to such notions, in actual practice we consign reformation ideas to the dustbin and progress is far from satisfactory.