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Scrapping sugarcane support price

Support price of agriculture commodities are viable built-in stabilizers to induce farmers to boost productivity of this sector which enhance their income. But the incumbent federal government dominated by the mercantile class has decided to do away with the support price mechanism for sugar cane and introduce a new price mechanism that will be linked with the wholesale price of sugar. The decision was taken in a cabinet meeting, which is apparently aimed at appeasing the farmers who are being persistently exploited by the sugar barons.

It remains to be seen how far this political gimmick will benefit the farmers because the intended pricing formula will frequently undergo variations due to fluctuations in the wholesale price of sugar in the national and international markets. It also gives certain degree of leverage to sugar mill owners in the mode of payment to growers. According to the proposed pricing mechanism sugar mill owners will make 75 percent advance payment of sugarcane and will withhold the remaining 5 percent for almost one year keeping in view the average wholesale price of sugar in the market. This seems to be no incentive for the sugarcane grower as they will be still at the mercy of powerful sugar mafia for receiving full payment of their produce.

In the government of President Ayub Khan, the mill owners were legally bound to keep a revolving fund in the branches of National Bank of Pakistan located in the premises of sugar mills. Accounts branch of the mill issued payment invoices of sale proceeds of sugarcane for encashment from the relevant branch of National Bank within a couple of days. It was a fairly transparent system of payment according to support price of sugarcane. In 2012, the previous PPP government revived almost the same mechanism for sugarcane purchase. It introduced a cane purchase receipt, convertible into bank cheque, to save sugarcane growers from the exploitation of millers. However, the present PML-N government failed to implement it. Even the Ministry of industries and production sent a comprehensive summary in that regard to the cabinet but it was not approved. The cane purchase receipt, convertible into bank cheques, would have been a supported document of the agriculture sector and would have safeguarded the interest of growers.

Instead of approving the receipt mechanism, the mercantile class dominated PML-N government doled out billions of rupees in the form of export subsidy to sugar barons. Total hit to public exchequer, both federal and provincial, will be at least Rs. 20.4 billion. This is in addition to the benefit of Rs. 30 billion that the millers will get by claiming a subsidy of Rs. 20 per kilogram on export of 1.5 million tons. The millers are reportedly paying low price to farmers who are receiving Rs. 140 per 40 kg of sugarcane against the suppoprt price of Rs. 180. The farmers are also cheated in calculation of weight of sugar and deductions on account of binding materials. The farmers are hence doubly at loss.

Farmers get support price of the commodities they produce even in the developed countries where the share of agriculture gross domestic product is much less in the gross domestic product (GDP) as compared with manufacturing sector. In Pakistan, it is still the main stay of the economy with 20 percent direct contribution to the GDP. A prompt and transparent mechanism of support price must be implemented so that the area under cultivation of sugarcane may not shrink, which will result in the closure of a number of sugar mills in the provinces of Punjab and Sindh like the four sugar mills in Khyber Pukhtunkhwa.

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Using trade leverage

China is using the Free Trade Agreement (FTA) as a cruel leverage under the umbrella of CPEC to the detriment of the economic interests of Pakistan. FTA- II will provide 75 percent zero tariff lines for a wide range of cheaper Chinese imports. It will destroy the local industry and shatter the hopes of much trumpeted new phase of industrialization in the form of joint ventures between the Pakistani and Chinese entrepreneurs in the special economic zones (SEZs).

Ironically, the Ministry of Commerce is not taking on board the Federal Bureau of Revenue (FBR) and Board of Investment (BOI) about the tariff lines slashing import duties to zero. The FTA-I which offer 35 percent tariff lines with zero duty has caused huge losses to domestic business. Pakistani manufacturers are now compelled to import goods from China and sell them as ‘Made in Pakistan’ in the local market. It is widely believed that FTA-II will adversely hit the federal revenues from custom duty, but advisor to the Prime Minister Miftah Ismail has created an impression that it will boost exports from the current level of $ 1.5 to $ 9billion, which is a false notion keeping in view the devastating effect of FTA-I raising trade with China from 3.5billion to $ 12.5 billion. If an FTA-I with 35 percent zero tariff lines has brought such a big disaster in external balance then how FTA-II providing 75 percent zero tariff lines for Chinese imports will give a tremendous boost to country’s’ exports to $ 9 billion.

Exports to China cannot be increased due to lack of diversification and high cost of doing business caused by sky high energy input prices and irrational taxation structure. Pakistan has slipped to 147th position in the World Bank Index of Ease of Doing Business index over the past two years. A few months ago, BOI asked the Commerce Ministry for a coherent investment policy so that negative impact of FTA-II could be minimized. The Commerce Ministry agreed but did not frame a policy to ward off the likely fall out of the second phase of Free trade agreement with China.

The government made the people believe, in a report of the State Bank of Pakistan, that CPEC may see relocation of complete industrial units and transfer of technology to SEZs which will include low end textile manufacturing and basic food processing units from China. Later, fertilizers, steel, automobiles, plastic products and other manufacturing industries may also see a similar trend. But all this is now at stake due to the FTA-II. Because of the barrage of tariff and non-tariff restriction slapped on Pakistani goods and primary commodities, the value of exports to China remained feezed at $ 1.5 billion over the past eight years but Chinese imports rose from $ 4 billion to $ 14 billion because of zero tariff concessions given to it under FTA-I

Pakistan does not have much to offer to China. Its exports of cotton, rice, raw hides and skins, vegetable and food products face numerous tariff and non-tariff barriers. On the contrary, Chinese imports of machinery, fertilizers, chemicals, yarn, iron , steel, synthetic textile fiber, road vehicles and auto parts, fruits and vegetables and a number of other goods enter our markets with zero tariff. The negative effects of FTA are like the IPP agreements that were made by PPP government giving the impression that the agreements will turn Pakistan into another industrial and business hub like Hong Kong. But these agreements trapped the country into the quagmire of recurring massive circular debt accumulations and abnormal increase in the cost of doing business, resulting in the transfer of large number of textile units to Bangladesh in the pursuit of inexpensive energy inputs.

US President Donald Trump, as a part of his America first campaign, levied heavy duties on the import of steel and few other items to reduce the trade deficit. If a resilient economy of the United States cannot endure the jolts of free trade agreements and a wave of protectionism has started in Europe then how a weak and debt riddled economy of a developing country like Pakistan can afford the luxury of 75 percent tariff lines with Zero import duty. The incumbent government should avoid the signing of FTA-II with China at the tail end of its tenure. It is now for the opposition political parties, particularly PTI, to agitate this issue in the parliament in the larger interest of the country and its people.

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Basha Dam approval, a happy tiding

It is more of a happy tiding that at last construction of Dia-Mir Basha Dam project was cleared by Central Development Working Party (CDWP) and final approval will be given by Executive Committee of National Economic Council (ECNEC). The initial cost estimate of the project is RS.625 billion as the construction of power generation component has been excluded as of now. It will be built later with an estimated cost of Rs. 744 billion. Hence the total cost of the project is Rs. 1.4 trillion.

Dia-Mir Basha Dam project will be mostly funded through local resources as the international financial institutions and even China showed reluctance to help the country build this big water reservoir. The water storage capacity of the reservoir is 8, 1000,000 acre feet. The completion of Dia-Mir Basha Dam will reduce the silting rate in the Tarbela Dam reservoir and prolong its life and utility further. If the construction of power component does materialize, it will induct 4500 megawatt very inexpensive electricity in the national grid. The federal government will provide Rs. 370.2 billion from its budget in a grant which will cover 57 percent of the cost. WAPDA will raise Rs. 115.9 billion from its own resources as equity investment and it will borrow 163.3 billion in commercial loans.

The CDWP also cleared the construction of Momda Dam project, the estimated cost of which is Rs.303 billion, showing almost five times cost escalation over the past 14 years. Initially its estimated cost was Rs. 60 billion. It is largely a power generation project with a potential of generating 800 megawatt cheap power. Since the decade of 1970s Pakistan’s history about the construction of big dam resevoirs is not an enviable one as the civilian governments showed almost animosity to construction of big dams and reservoirs, voilating the provisions of Indus Basin Treaty. Pakistan could not benefit from its share enormous water resources as lower riparian country from the three westerly rivers of Indus, Jehlum and Chanab. The apathy shown towards the construction of big dams over the past 42 years and making the multi-dimensional Kalabagh Dam project politically controversial strengthened the stance of India in International Arbitration Courts in cases pertaining to the construction of controversial dams of Kihan Ganga, Baghliar and Salal.

The annual loss of water resources to the country has been assessed by experts worth 12 billion dollars which reflects the myopic vision of our leadership which pushed the nation to the brink of water and power crisis. Had Kalabagh dam been launched either in 1975 or 1985 it would have provided sufficient irrigation water for millions of acres of arid land in Punjab and Khyber Pukhtunkhwa., besides adding 3000 plus cheap electricity to the national grid. The issues of load shedding and circular debt would have not been that worse.

In the backdrop of CDWP clearance for Dia-Mir Basha project, Sindh Chief Minister Syed Murad Ali Shah has announced that he will strongly oppose the construction of new dams on river Indus without prior consultation of all stakeholders including Sindh Government. The announcement came to fore when the country is bracing for water and power crisis amid lack of storage dams in the country. He argued, “Under the National Water Policy (NWP) no new water storage dam on River Indus is applicable until and unless a consensus is developed among all the stakeholders, particularly the lower riparian.”If this interpretation of NWP is correct then the policy is contrary to the supreme national interest. The political leadership had miserably failed to evolve consuls in the past on Kalabagh dam and the whole nation is paying a heavy price of the so called consensus mantra in the form of shy-high electricity prices and steep decline in the productive capacity of the economy.  National policies are framed and approved for the entire nation and not for a particular class of people or part of the country. Enough is enough; the federal government should make the construction of big dam- storages a national priority.

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Bridging credibility gap

Prime Minister Shahid Khaqan Abbasi ,in his visit of Washington, has tried to convince President Trump administration about Pakistan’s persistent efforts for the resolution Afghan imbroglio. But he could not succeed to allay the misgivings of the United States leadership about the existence of alleged safe havens in Pakistan. The Prime Minister met US Vice President Mike Pence and during the meeting he was handed over the message of President Trump repeating the ‘Do more’ demand from Pakistan and describing its actions against militant outfits insufficient.

The response from the military leadership is loud and clear. Director General Inter Services Public Relations Directorate (ISPR) Major General Asif Ghafoor said in an interview with Gulf News that Pakistan has eliminated sanctuaries of all terrorist groups including the Haqqani Network from its soil through a well-thought-out military campaign Zarb-e-Azb. But all this has come with a huge price  in blood of over 75000 Pakistanis and economic loss of $ 123 billion to the national exchequer.  He said that there are no more organized sanctuaries and for the elimination of remaining disorganized scanty residual presence of militants operation Raddul Fasaad is in progress.

Pakistan has intensified its efforts for a negotiated settlement of Afghan problem. National Security Advisor, Lieutenant General(r) Nasser Janjua in his visit of Kabul held meeting with Afghan President Asraf Ghani and Chief Executive Abdullah Abdullah to explore the possibility of bringing Taliban to the negotiation table. The National Security Advisor has urged Taliban leadership to accept the Afghan Government offer of peace talks to end the ongoing conflict to restore peace and stability to Afghanistan.

Pakistan’s spectacular success in war against the amorphous enemy operating in the form of terrorist organizations is unprecedented but its efforts are not recognized and appreciated by Washington. The US pressure on its dependable ally will further intensify if Afghan Taliban refuse the talk’s offer of Asraf Ghani government and go ahead with their likely spring offensive. The periodicity of terrorist attacks has already increased in Afghanistan. To ward off that pressure a proactive diplomacy needs to be started immediately with clear parameters of Afghan Policy.

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Islam phobia in Europe

In a fairly tolerant society of Germany, the Interior Minister Horst Seehofer made controversial remarks that Islam does not belong to Germany as apolitical slogan ahead of regional elections in Bavaria coming this fall. German Chancellor Angela Merkel rebuffed his comments by saying that the religion of four million German Muslim citizens is part of the country just like Christianity and Judaism. Germany has the second largest Muslim population in Western Europe after France.

Successive governments of Germany have shown a generous attitude to the incoming immigrants from Turkey and large number of asylum seekers mainly from Islamic countries even before the economic integration of West and East European counties. Among the country’s nearly 4.7 million Muslims, three million are of Turkish origin. Many of them are second or third generation of Turkish families who migrated to Germany in the 1960s and are almost well integrated in the country. In sharp contrast to the governments of other countries of European Union, Chancellor Angela Merkel opened her country’s borders to the heavy influx of Syrian war refugees despite the opposition from far right political parties like Alternative fur Deutschland (AfD). The party is known for its virulent anti-immigrants and anti-Muslims stance. AfD emerged the third largest political by securing 94 seats in Bundestag in October 2017 elections.

The main reason for the ant-Muslim feeling is socio-economic as the rate of unemployment and inflation has gone up and economic burden of unemployed immigrants and asylum seekers is affecting the German economy.  Germany is the only European country that provides health facilities to illegal immigrants and refugees at par with the German citizens. Like the US president Trump America first policy the AfD leadership stands for Germans first campaign. However, the German demographers propagate the opposite view and they support immigration. More than 60 percent of Germany’s population consists of old and retired people and 30 percent youth is sustaining the economy. In their view, the country needs young immigrants to be trained and skilled to contribute their services for supporting and boosting the German economy. In the decade of 1990s the asylum seekers and war refugees were denied the opportunities of getting education, training and employment but now the situation and environment is vice versa.

By default, Germans are imbibed with a true spirit of humanity because they have suffered oppression and atrocities of two World Wars, hence to assume their innate phobia for any religion or race is out of question. If somebody wants to probe the issue of Islam-phobia, he or she will find its roots in the American Imperialism, particularly in their agenda of New World Order. It was the conservative US leadership that introduced the phraseology of radical Islam and included it in the Lexicon.

Germany is the EU, s largest economy which has witnessed growing Islam phobia in recent years triggered by propaganda from far right parties which have exploited it over the refugee crisis and terrorism. Since 2015, Germany received more than one million refugees mostly from Syria and Iraq. In a backlash to Turkey’s military operation against Kurd militants in Turkey and Syria, the PKK/PYD rebels have attacked a number of Turkish mosques in Germany. These incident may also be exploited the far right parties to pent up feelings of Islam phobia but that will not influence the humane people of Germany.

A number of incidents of acid throwing have been occurred in Briton. A teenage Egyptian girl student Mariam Moustafa was lynched by a group of English girls’ right in front of a shopping Mall in Nottingham on February 20. Neither the people in the shopping Mall nor the British Police came to her rescue and stop the cold blooded murder of an engineering student who would have aspired for a bright future. It is time of introspection for the rulers of Islamic countries whose hands are at each other throats in the ongoing Syrian conflict.


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Pseudo optimism

Advisor to the Prime Minister, Miftah Ismail in a rare display of pseudo optimism neither univocally rejected nor accepted the alarming report of the International Monetary Fund (IMF) about the extremely bad health of Pakistan’s economy. Unlike the earlier furious and satirical reactions of Federal Minster, Ahsan Iqbal to sane advices of global lending agencies to take corrective measures for addressing the fiscal imbalances on time, Mr. Ismail gave a soft response to the recent IMF report that will affect the credit worthy image of the country in the international credit market.

The advisor on finance said in a vague manner that Pakistan will have no issue to arrange finances to meet its emerging needs but did not elaborate how this herculean task can be done. He did not disclose the sources where from the financial assistance would come. The contention that the global lending agency has adopted a different methodology to calculate the figures of foreign currency reserves is not tenable because in the same breath he vindicated the veracity of its report about the dismal performance of the economy. There is no iota of doubt that Pakistan’s external payment liabilities would surge to $ 24.5 billion this year and the reckless borrowing that continues under the recipe of ‘Darnomics’ would push it up to $ 27 billion in the next fiscal year.. If the borrowing spree goes on then and the economy is not turned around like the 2000-02 period then the external payment liabilities may go up to $ 45 billion in the financial year 2023.

The internal payment liabilities have also abnormally gone up. The cumulative burden of circular debt and tax refund to the business community has reached Rs. 1.3 trillion. The incumbent government does not have enough fiscal space to clear all these obligations, leaving a heavy baggage of economic mess to the next government. It would give Rs. 140 billion to the power sector including part payment of Rs. 80 billion on account of circular debt to IPPs and Rs. 60 billion to Pakistan State Oil. The government has not yet decided that how much of the Rs. 300 billion tax refunds shall be paid. It reflects acute liquidity constraints of the economy.

The external debt payment capacity weakened due to contraction of exports despite the generalized Scheme of Preference (GSP) plus facility allowing our exports tax free to the European Union market. Pakistan’s finished goods and primary commodities lost their comparative advantage because of high tariffs of energy input, multiple indirect taxes and lack of exports subsidy like the one given on the export of sugar. Neither the composition nor the market of exports has been diversified. Moreover, national interest has not been secured in the trade agreements with China, Indonesia and Turkey. The trade deficit with China alone is $12 billion plus and with Indonesia it is $ 2.3 billion. The economic scenario will become the worst if prudent fiscal and monetary measures are not initiated.

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Grim economic scenario

Presentation of the annual budget for the next fiscal year in the parliament is a month ahead and the grim economic scenario is fast emerging, leaving now little room of maneuvering for the economic wizards like Ahsan Iqbal to repudiate the ground realities. In a disclosure that could jolt the country’s financial market, the International Monetary Fund (IMF) has assessed Pakistan’s net foreign currency reserves, after excluding its international payment liabilities, to be negative at $ 724 million. The situation seems this time to be worse than October 1999 created by the economic hit man Senator Ishaq Dar. Back then the foreign exchange net reserves were $ 600 million positive.

The IMF used to be the global lender of the first resort, in its Post Program Monitoring report has exposed the shallowness of the current gross official reserves of $12.1 billion, which are largely maintained by double booking of reserves and taking into account Chinese loans deposits under currency swap arrangements. It reflects the accounting gimmick bequeathed by the Finance Minster on long leave in London to his successor Miftah Ismael. As of February 14, net international reserves stood at minus $724 million-down from $7.5 billion in September 2016 when IMF three year Extended Fund Facility Program ended. The situation in February was that Pakistan’s payment liabilities in foreign exchange were $ 13. 5 billion as against its gross foreign currency reserve of $ 12.8 billion. The reserves further slipped to $ 12.23 billion by March 2, which indicates fast depletion of foreign currency reserves.

The worrying factor is that the gross official foreign exchange reserves declined despite significant external borrowing by the government, including several syndicated bank loans and issuance of Sukuk and Eurobonds worth $ 2.5 billion. The gross official reserves may further slip to $ 9.37 billion by June if the government does not succeed to get about $ 1.6 billion fresh loans to shore up the reserves to $12.1 billion. The rising external payments liabilities caused by widening current account deficit, escalating debt servicing on account commercial short-term expensive loans and CPEC related outflows will slow down the economic growth rate. In case the capital inflow remains slow the GDP growth rate will stagnate at 3 percent in the next fiscal year whereas the independent economists are even critical of the expenditure led growth rate of 4.9 percent of the current year when they compare it with the income-led economic growth of 8 percent in India and 7.76 percent inBangladesh.

As short term measures the government would need tight monetary policy by avoiding the election expenditure slippages in the form of releasing billions of rupees of development funds to lawmakers. A stronger fiscal discipline and decisive efforts to contain losses in the public sector enterprises are also inevitable to address external imbalances and fiscal risks. The cumulative losses of Pakistan International Airline are Rs. 320 billion and are still incurring annual losses of Rs. 40 billion.  The losses of Pakistan steel Mill have reached Rs. 166 billion. That is why the De facto Finance Minister Miftah Ismael has made a generous offer that whoso pay the entire debt of PIA, he will get Pakistan Steel Mill free of cost, the inventory  landed other assets of which are worth hundreds of billions. It was because of immense value of its assets that Supreme Court of Pakistan stopped its sale for $ 270 million in 2007 when it was earning reasonable amount of profit.

The main reason for the ballooning current account deficit is that national interest was ignored in the Free Trade Agreement with China and Preferential Trade Agreements with Indonesia and Turkey. The imports from these countries are exempted from tariffs and non-tariff restrictions whereas heavy import duty is charged on Pakistani exports besides quota restrictions and Quarantine formalities. Pakistan’s decision to control import bill through administrative measures like imposing regulatory duties and maintain cash margin requirements has limited effect as foreign currency reserves continued to decline. The solution lies in boosting exports by taking immediate measures for improving the economic environment through reduction in tariffs of energy inputs and rationalizing the number and structure of indirect taxes.

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Raiwand suicide attack

The terrorist groups most often succeed whenever they want to hit the targets of their choice, tall claims of the federal government about smashing the terror outfits notwithstanding. As compared with the worst affected provinces of Baluchistan, Sindh and Khyber Pukhtunkhwa, Punjab remains relatively at peace but it is not completely safe from the terrorist attacks. At least ten people, including five police personnel were martyred and over a dozen injured in suicide blast on the outskirts of Lahore on Wednesday night. The explosion occurred near a police camp set up for the security of the annual congregation of Tableeghi Jamat in Raiwand and the police appear to be target.

This is the first incident of such nature in Lahore this year; however, almost 60 people lost their lives in terrorist attacks in 2017. At least 45 people were injured in an explosion in fruit market at a truck standing in the parking lot in August. In July, 26 people including nine policemen were martyred and 58 others injured in suicide hit on Ferozpur Road. In April, six people, including army personnel were killed in a suicide attack on Census team on Bedian Road. On February 13, over two dozen people including two senior police officers were killed in a suicide blast on Mall Road.

The government has deliberately kept itself oblivious of dangerous changes occurring in this region, particularly the alarming increase in suicide attacks in Afghanistan. The rise in violence and US drone attacks inside Afghanistan or close to the Pak-Afghan border have a backlash in Pakistan. The government seems to be least bothered about improving the internal security situation and always take shelter behind conspiracies theories, which is nothing but burying head in a heap of sand like Ostrich in front of imminent danger.  Almost the entire leadership of PML-N, baring a few exceptions, is treading a path of confrontation with state institutions at the behest of former disqualified Prime Minister.  The critique of the Apex verdict of 28th July by Captain (R) Safdar and ensuing verbal brawl between him and PTI MNA Dr. Arif Alvi is a sad reflection of our political culture.

The essential matter of streamlining the inland security laws is out of their priorities. No fool proof security mechanism is in place for providing security to VVIPs. How come that two religious extremist managed to reach near the stage in Jamia Naeemia and threw shows on the former Prime Minister Nawaz Sharif. Ironically, the response of PML-N leaders to this incident was a display of mundane political behavior rather than rational one. The next general elections are a few month away and political leaders will address public meetings and hold rallies for which a secure and peaceful environment has to be created.

The ruling leadership has abandoned the implementation of National Action Plan (NAP) solely for political reasons and lack of moral courage. The most important points of this plan have been shelved. It includes strict action against militant groups having sleeper cells in the Southern Punjab and Interior Sindh; strengthening National Counter Terrorism Authority (NACTA); chocking finances for terrorist organizations by improving the counterterrorism financing regime; Seminaries reforms; and revamping and reforming the criminal justice system. A comprehensive plan for antimony laundering and choking of finances to terror groups has to be put in place without any further delay. The national narrative ‘Paigham-e-Pakistan’ turned out to be a onetime public relation exercise as even a single inch progress has not been made on its implementation. It is time to stop the diatribe against the state institutions; mantra of ‘why I was shown the door,’ and so called campaign of restoration of the sanctity of vote. National Security should be held supreme and not hue and cry for personal interest.

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Myth and reality of CPEC

Eminent economists and technocrats has emphasized that government should fully define the Nitti Gritty of China-Pakistan Economic Corridor (CPEC) by removing the mystery shrouding it. They suggested the government should consider establishing a CPEC unit within the framework of Council of Common Interest (CCI) to manage the project with transparency and efficiency. The findings of the top policy making brains vindicate what has been featured in these columns about this project in recent months.

The Institute of Public Policy launched its 10th Annual Report Titled, “The State of Economy: CPEC Review and Analysis on Monday.” It reveals that the Chinese funded project has not been fully defined and developed. Renowned economist, Shahid Javed Burki stressed that to realize tits full potential CPEC program must have the support of all citizens. This seems to be a subtle reference of the changed priorities of PML-N government for the implementation of this project. He exploded the  myth created by incumbent federal government about CPEC and highlighted its true picture. Shahid Javed Burki said the project was touted as game changer but it would possibly add 2 percent to growth rate of GDP. This is in sharp contrast to the claims of what the Federal Minister for Interior, Planning and Reforms, Ahsan Iqbal is making the people believe. However, he agreed to the notion that the project will bring greater integration of Pakistan’s backward areas into that of more developed ones.

Former governor State Bank of Pakistan, Dr. Ishrat Hussain said that we should not accept false hopes through CPEC project, as the case of establishing industrial zones is in infancy, so we are just analyzing about industrial zones. The former central bank governor was of the view that the great hope through CPEC should be advancement in technology and human development. He said for future competition among nations it will be human resource and technology as resources like oil and other things will become secondary. Dr. Ishrat Hussain has struck the right not because the economic progress and prosperity of Japan, and South Korea rests on their advancement in technology and enormous pool of highly skilled human resource. But the governments in Pakistan deliberately neglect human resource development to perpetuate the hold of feudal and mercantile classes over the corridors of powers and national resources.

Further deflating the game changer balloon of CPEC, former Foreign Secretary Shmshad Ahmad Khan dispelled the impression that the project will benefit Pakistan alone. He said it will connect Asia with Europe. He made a very pertinent point that it should be completed as nation’s economic core program and our politicians should remain out of this project otherwise CPEC will become another Kalabagh dam for Pakistan.

The report of Institute of Public Policy provides valuable and workable guideline to the government to make CPEC really beneficial for the people in general and not for a handful of elites. The government has not clarified the media reports that certain road projects on the western route have hit snags, modernization and refurbishment work of Peshawar-Karachi railway track has not been delayed indefinitely and Diya Mir Bash Dam has been withdrawn from CPEC framework because China’s conditions for its financing ran contrary to national interest.  The government is not disclosing the details of contracts about the thermal power plants projects to know as to whether these contracts also include the clauses of capacity charges like the contracts of local IPPs which is a major cause of massive circular debt accumulation. There is nothing in black and white as to which environmental laws will be applicable to health hazardous Chinese Coal based thermal power plants as these plants do not have built-in Carbon Scrubbles to reduce the carbon content emission like the German thermal power plants which are relatively environment friendly, having the built-in provision for Carbon Scrubbles.

The reason for the creation of revolving fund in commercial banks for advance payment to Chinese thermal power generation companies is not disclosed in the parliament. The essential ingredient of transparency in the award CPEC contracts is totally missing as only Chinese companies are allowed to submit their tenders and take part in bidding process. The Ambassador of the United States David Hale, in his visit of Islamabad Chamber of Commerce and Industry on December 24, complained in lighter vein about ignoring American highly reputed companied in CPEC contracts. The government has not shown seriousness for human resource development and creation of a sound base for the indigenization of 5th generation technology that would with the Chinese special economic zones. The proposal of the Institute of Public policy to establish a CPEC unit in the Council of Common Interest is worth consideration.

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Improving Pak-US relations

It appears that the dust of President Trump harsh tweet accusing Pakistan of telling ‘lies’ and committing ‘deceit in return for receiving billions of dollars has gradually settled down, and  bitter tone public posturing of Pakistan ,s civilian leadership for public consumption has gone to the back ground. Away from public notice, Pakistan and the United States are working their way out of current impasse gradually through ‘Quite diplomacy’ carried out by the career diplomats of foreign office. Although relations between the two ostensible allies hit a new low after President Trump scathing New Year tweet, the two countries remained in touch to find some common ground on critical issues-including the Afghan endgame.

As a part of quiet diplomacy, there have been flurry of exchanges between the two countries over the past two weeks. Trumps senior aid, Lisa Curtis, was in Islamabad long ago and held low level meeting both with foreign office and military officials. Foreign Secretary, Tehmina Janjua travelled to Washington then to meet senior US administration officials. The discrete efforts have started paying dividends then, as there is softening of the US public posturing. The two sides have covered considerable ground in ongoing talks on a number of issues-including how to put an end to the lingering conflict in Afghanistan as well as Pakistan’s strategic grievances.

It is note worthy that CENTCOM Chief General Joseph Votel and Principal Deputy Assistant Secretary of State for South Asia and Central Asia, Alice Well have spoken positively of Islamabad’s role in the resolution of Afghan conflict. The top US Commander, in a statement before a panel of Congress admitted that Pakistan has indeed taken some significant steps recently over the last of couple of months. Likewise Alice Wells, during a session on Afghanistan and Kabul peace process at the US Institute of Peace in Washington said on Friday that US believes that Pakistan can play a much more important role in shaping in shaping in Afghan Taliban behavior. She stressed on Pakistan’s critical role to provide incentives to Afghan Taliban for understanding the value of negotiations with Ashraf Ghani Government. “Pakistan has also interest that it wants to ensure are met during the course of stabilization of Afghanistan which we take seriously, “She told the audience. So the dialogue that we have with Pakistan whether it is through military or civilian channels seeks to address these concerns.

Efforts towards the restoration of peace in Afghanistan are moving in the right direction. US Defense Secretary, James Mattis in his unannounced visit of Kabul on Tuesday and after meeting with Afghan President Ashraf Ghani revealed that some elements of the Taliban are open to talks with the Afghan government. As a confidence building measures, the US has made successful drone attacks against the TTP and Daesh in Afghanistan and announced head money of $ 5 million on TTP Ckief Maulana Fazalullah , $ 3 million each for another prominent figure Wali Muhammad alias Khalid Umer Khrasani and Lashkar-e- Islam Chief Mangal Bagh. These are significant developments in the contest of Afghanistan peace process. But the incumbent PML-N government has shown a non-serious attitude towards the improvement of Pak-US relations for which a discrete attitude has to be demonstrated instead of public outburst by the federal Ministers against the United States and either  ill conceived or deliberate decision of appointing a businessman Jahangir Ali instead of a veteran career diplomat at Washington at a time when the signs of a negotiated settlement of Afghan issue have emerged  which has made this region a powder keg for the last 38 years. It is time that the civilian leadership to take seriously the valuable input from the foreign office on the Afghan imbroglio and earnestly pursues the national interest in the Afghan endgame. The crisis in domestic politics should not be given preference over the emerging opportunity of restoring peace and stability in Afghanistan.