The term
South Asia commonly refers to seven countries namely: Bangladesh, Bhutan,
India, Maldives, Nepal, Pakistan and Sri Lanka. These countries are also part
of South Asian Association for Regional Cooperation (SAARC), a bloc
established in 1985. Afghanistan has been included as 8th member of SAARC in
2006 and China, Iran and Myanmar are also seeking full member status of the
bloc.
According to
various reports SAARC member countries have millions of acres of cultivable
land, reasonably robust agriculture and manufacturing base, but very large
percentage of population of these countries lives below the poverty line. Often
South Asia is termed the poorest region in the world after Sub-Saharan
Africa. While over a quarter of the world's poor people live in Africa, half of
them live in South Asia. According to a report there are more poor people in
eight Indian states than in the 26 poorest African countries.
According to
a World Bank report released in 2007, South Asia was the least
integrated region in the world. Trade among countries in the region is around 2%
of the region's combined GDP, compared to 20% in East Asia. According to
some analysts due to similar climatic conditions, soil composition and mindset
of ruling junta these countries still compete with each other in the global
markets. Despite enjoying close proximity and often common borders, these
countries have failed in complementing each other due to hostilities against
each other.
Three of the
largest countries by population, Bangladesh, India and Pakistan have elaborate
agriculture and manufacturing base but hardly enjoy cordial diplomatic relations.
This virtually closes down doors for economic cooperation, particularly sectors
like agriculture, manufacturing and even services. One of the reasons for the
prevailing situation is ‘trust deficit’ as the hawks present in these countries
try to portray that economic cooperation among the member countries will make
the smaller countries subservient to the those having rather robust economy.
All the
countries of the region suffer from acute shortage of energy products, the
lifeline of economy. A closer look at the power generation potential, installed
capacities and actual output one could say without mincing words that the
energy crisis looming for nearly three decade is the outcome of following
inconsistent policies and gross mismanagement. Below optimum capacity
utilization of power generation capacity is partly due to non-availability of
fuel and partly because of inadequate maintenance of the power plants but poor
cash flow is the mother of all evils.
Pakistan has
an aggregate installed electricity generation capacity of nearly 30,000MW but
average output hovers around 15,000MW or 50 percent capacity utilization. Equally
shocking is the news that India also suffers from the same contentious problem.
The third largest economy of the world has an aggregate installed generation
capacity of 250,000MW but actual generation hovers around 150,000MW. A point
that distinguishes two countries is that while efforts are being made in India
to overcome looming energy crisis, little effort is being made in Pakistan.
One can just
forget two of the gas pipeline projects Iran-Pakistan-India (IPI) and
Turkmenistan-Afghanistan-Pakistan-India (TAPI). Both the pipelines were aimed
at catering to Indian gas requirement but Pakistan was to benefit in two ways:
1) getting millions of dollars transit fee and 2) also gas for meeting domestic
requirements. It was believed that after easing of economic sanctions on Iran,
Pakistan will succeed in completing portion of gas pipeline located in its
territory. However, it seems that Government of Pakistan (GoP) does not wish to
complete this project due to the US pressure. Fate of TAPI is also in doldrums
as NATO forces are likely to vacate Afghanistan in 2014. Therefore, Pakistan
will have to accelerate oil and gas exploration activities in the country and
also complete LNG project on war footings.
Pakistan is
a natural corridor for energy supply because on one side are energy-rich
countries and on the other side are energy-starved ones. Pakistan can also
follow Singapore example and establish state-of-the art refineries on the
coastal belt. In this regards help can be sought from China, Russia and other
Central Asian countries. Pakistan already has a mid-country refinery and two
pipelines to carry black and white oil products up to Multan. This can pave way
for export of white oil products to Afghanistan and Chinese cities enjoying
common border with Pakistan. Realization of all these projects can help the
country in earning millions of dollars transit fee.
Ironically,
Gwadar port project has been put on back bumper after the departure of Pervez
Musharraf. In fact the paraphernalia should have been completed prior to
transfer of management control to China. Though, India is facilitating in the
construction of Chabahar port in Iran, Pakistan will continue to offer shortest
and most cost effective route up to Central Asian countries passing through
Afghanistan.
Lately, some
of the Middle Eastern countries have shown keen interest in acquiring
agriculture land in Pakistan but local feudal lords have emerged to be the
biggest opponents to leasing of cultivable lands to other countries. Pakistan
has millions of acres of land which is not cultivated, mainly due to shortage
of irrigation water. Leasing out land to other countries is not a bad proposal
because it would help in improving the infrastructure i.e. construction of farm
to market roads, and modern warehouses. Construction of water courses and
installation of tube wells would have helped in raising sub-soil water levels
in arid zones.
Pakistan
produces huge quantities of wheat, rice, sugar, fertilizer but a significant
portion of these commodities is smuggled to neighboring countries. Plugging of
porous border and formalizing trade with India, Iran and Afghanistan can
increase Pakistan’s export manifold. It is estimated that nearly one million
tons wheat and half a million tons rice and sugar each is smuggled to the
neighboring countries.
The increase
in lending to farmers has started yielding benefits with Pakistan joining the
club of wheat exporting countries. The recent initiative of State Bank of
Pakistan, Warehouse Receipt Financing and trading of these receipts at Pakistan
Mercantile Exchange is likely to improve earnings of farmers, though reduction
in wastage and better price discovery. It is encouraging that British
Government has offered assistance equivalent to Rs240 million to complete the
project at a faster pace. The key hurdle in the realization of this project is
lack of modern warehouses and absence of collateral management companies.
It is
necessary to remind the GoP that nearly 1000 palm oil plants were grown in
Sindh near the coastal line. While a large percentage of plants have died due
to improper management, extracting oil is almost impossible because no crushers
have been installed. Achieving self sufficiency in edible oil can help in
saving over US$2 billion currently being spent on import of palm oil.
Pakistan
often faces ban on export of seafood because to not abiding by international
laws. While local fishermen face starvation deep sea trawlers from other
countries intrude into Pakistan’s territorial waters and take away huge catch.
On top of all use of banned net results in killing of smaller fish that are
ultimately used in the production of chickenfeed. This practice going on for decades deprives
Pakistan from earning huge foreign exchange besides ‘economic assassination’ of
poor fishermen.
Pakistan’s
agri and industrial production has remained low due to absence of policies
encouraging greater value addition. Pakistan is among the top five largest
cotton producing countries but its share in the global trade of textiles and
clothing is around two percent. The
country needs to establish industries that can achieve higher value addition.
Pakistan should export pulp rather than exporting fruits which have shorter
shelf life.
Pakistan has
overwhelming majority of Muslims but still goods worth billions of dollars are
imported which are not Halal. Ideally, Pakistan should be exporting Halal food
products to other Muslim countries. The country need to focus on breeding of
animals (i.e. chicken, goat, cows) and export frozen meat and dairy products. If
countries like Australia, and Holland can produce Halal Products what is
stopping Pakistan.
Another
example to follow is Bangladesh, which does not produces cotton but its export
of textiles and clothing is more than that of Pakistan. This is because
Bangladesh has focus on achieving higher value addition and Pakistan continues
to produce law quality and low prices items. This is waste of precious resource
and to be honest value addition is negative.
Pakistan has
also not been able to benefit from being a member of SAARC. Some of the
analysts say it is difficult to compete with India but has Pakistan really made
any effort to achieve higher value addition? The reply is in negative due to
prevailing mindset of Pakistanis who want to lead ‘easy life’.
