Trade woes

LAHORE: Pakistan has gradually lost its advantageous global positioning in trade mainly due to deterioration of all governance standards and unceremonious termination of the tenures of elected governments.

At the start of the century we were positioning ourselves as the trade corridor for Central Asia; today our road infrastructure is in shambles; Railways have almost derailed and PIA has gone out of air. The transportation cost of a 40 feet container from Karachi to Lahore is higher than the shipment cost of the same container China to Karachi. The CPEC has not really taken off. But even if CPEC was fully operative the container cost with our existing transport fleet would have been higher.

The answer to our high transportation cost is to shift effectively and prudently to Railways for goods transportation as it is the cheapest and quickest mode of transport. Railways operations have become redundant but its rail track is still in good shape. Private sector can operate all trains if the state charges fair wheeling charges from private operators. The public appeasing mode of operating passenger trains by the state must be stopped. Let private sector operate even passenger trains without any share of Railways in the operations. The only condition for the private should be to pay the rent of the track they use. They should not be asked to share the revenues that they earn as it would increase the cost of the service.

On the road transport side the state should stop providing preferential treatment to public sector companies and provide a level playing field to all transporters. This will foster fair competition.

It has become a fashion to blame all our woes on outside sources like foreign powers, war on terror or even weather but the fact of the matter is that this is the situation of our making. Politicians, bureaucracy, military and economic planners all played their role in pushing Pakistan to the turmoil we are facing. The mess has to be controlled sooner than later.

In desperate situations which we are almost ever in we look towards foreign assistance. We were bailed out for sure but at a cost as we compromised on our national interests and punished our consumers for the sin committed by those in power.

The IMF is always knocking at our doors and extending a helping hand after we have smoothened our relations with the United States. Unfortunately we continue with public appeasing policies as long as we get waivers from the IMF.

This drowns us more in debt and distorts our economy. Time has come when we stop all unnecessary spending, withdraw all concessions and general subsidies, and curtail our expenses in line with our income. if the government lacked the will to tax the rich equally according to their incomes.

Barring Pakistan the entire South Asian and Far Eastern region prepared itself for the opportunities that were coming towards the south. But our resource allocation remained flawed. We are facing gas shortages because the exploration policy for new fields took out incentive to explore.

We continued sanctioning fossil fuel based power plants and are paying the capacity charges as most of the time we cannot afford to import high cost fossil fuel. Today, we are low cost, low quality and low value added producers of goods while our competing economies have gone high tech. Successive governments showed urgency in signing international agreements and conventions without bothering to analyze whether these were in our national interest or not.

Pakistan for instance has signed ILO conventions that have not even been signed by the United States, Japan, China or India. The economy has to be treated on merit and should not be left on the whims of the rulers.