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PPMA Circular regarding PIC case and the effect on Pharmaceutical exports from Pakistan

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PPMA Circular No. 016/2012PPMA-logo

February 10, 2012

To:        All Member Companies of PPMA

LETTER FOR THE EMBASSIES

Dear Members,

As you may already know regarding the unfortunate deaths reported at the Punjab Institute of Cardiology in the past few weeks.  We, the Pakistan Pharmaceutical Manufacturers’ Association (PPMA), the representative body of the Pakistan pharma industry have been shocked by this tragedy and have full sympathies with the affected families.  We have been having contacts and meetings with the authorities and also with the technical personnel in our member companies all over Pakistan.  The main purpose of the contacts and meetings was to

1. To ascertain the facts

2. To review the Quality Assurance/ Quality Control and cGMP guidelines and SOPs for validation.

These measures would be vital to prevent any further mishap of this nature.

Coming now to the facts; the samples were sent to the government labs as well as independent labs in the UK and Belgium.  So far we have seen reports of one batch from a particular company being contaminated.  However, we are unable to share the details as the matter is subjudice as the Supreme Court of Pakistan has taken Suo Moto notice of the entire matter.

We would like to mention here that due to lot of hype created by the media, panic has been created in the public’s mind that all locally produced medicines are spurious and sub-standard.  We started getting enquiries from the foreign buyers of our medicines, asking our manufacturers to clarify the matter.  In at least two cases, the orders have been cancelled by the foreign buyers.  We held press conference in Karachi, Lahore, and Islamabad where we stated the facts of the matter with a view of restraining the media not to spread the misinformation campaign as it would shatter the trust that the National pharma industry has built in the public over several decades, and would lead to its collapse, paving way for counterfeits to fill the vacuum that would be created in the market.  The National pharma industry is exporting to over 60 countries and the total exports are around USD 170 million.  40% of the leading brands of medicines marketed by MNCs in Pakistan are manufactured by National companies under contract manufacturing. This is reflective of the quality manufacturing of the National industry and the trust reposed in it.  We would like to mention that the exported drugs also undergo stringent quality control checks in their respective importing countries (case in point, Afghanistan where all batches are quarantined for 15 days by their Ministry of Health and then released for marketing after QC clearance), suggesting additional safeguards for the patients.

Incidence like this one, though unfortunate, happens even in developed markets and big MNCs have recalled contaminated batches, after deaths were reported.  We strongly feel that the entire industry’s image should not be damaged because of once in a lifetime incident like this one.

We hope that we have been able to give our viewpoint, and would like to assure you that the PPMA is doing whatever it can to prevent such an occurrence in the future.  Our members have already started the process of re-validation in their manufacturing process.  We seek your understanding and support in the matter.

Thanks and regards

Riaz Hussain

Executive Director/ Secretary General PPMA

c.c.      Mr. Tariq Ikram, Acting Chairman PPMA

           Mr. Muhammad Asad, Chairman PPMA (on leave)

PIC case gets a new twist | Efroze Chemicals ISOTAB was not prescribed to most of the victims – Mubashir Luqman

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Free medicine at Punjab Institute of Cardiology (PIC) becomes a death sentence. 130 plus deaths. Political mud-slinging. Conspiracy theories. Spurious accusations. Pakistan’s pharmaceutical industry in trouble. Catch up on the news first then read on.

Now that you are up-to-date on this bizarre story here’s a new twist! (Forward to around the 27 second mark)

What’s that now? Mubashir Luqman is on Dunya TV saying Efroze Chemical’s ISOTAB, the alleged killer drug, was not even prescribed to most of the PIC patients who died? Yes read that again. ISOTAB may not have been prescribed to those who died. Wait wasn’t the anti-malarial inadvertently added to ISOTAB conclusively responsible as the cause of death? Talha bin Ayub wrote a few days back in a guest blog on Teeth Maestro that things don’t add up medically and that a overdose from the anti-malarial can be reversed also.

We need to step back and really investigate this whole incident properly without political circuses or lynch mobs baying for blood. For the sake of the 130 plus who passed away. For the sake of the thousands that may die in the future if this entire episode is not used to structure the pharmaceutical industry, to build in safeguards, to strengthen our institutions, and to protect our people.

What do you think of this entire episode and these new developments?

Cosa Nostra in Karachi

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A Cross Post by Majyd Aziz

“This is a moment of choice for everybody, for politicians, and for people right the way down through every part of the community.” Peter Hain (British MP from Wales)

Although Hain was talking about the situation in Ireland, the fact of the matter is that if Hain was a MNA from Karachi, he would be expressing the same sentiments about his metropolitan city. At this time, it is the month of Ramadan, whenMA-LAUGH-1 the faithful perform their ordained religious obligations of fasting, praying, and distributing charity and Zakat. This is the month when retailers and suppliers rake in most of their yearly profits and reduce their held up inventory. This is the month when social welfare organizations bombard citizens with pleas for donations and contributions. This is the month where children look forward to new clothes, new shoes, and new gifts on the occasion of Eid-ul-Fitr, the Muslim day of feast.

Come Ramadan 2011 and Karachi has been transformed into a city where streets have become rivers of blood, where the candles of happiness have been extinguished in hundreds of households, where the citizens, no matter how brave, walk or drive to their places of worship in fear and apprehension, and where there are no signs of security or sanity. This is the city where, instead of religious sermons and religious poetry heard from loudspeakers, one hears the rat-a-tat of gunfire by snipers and even desperadoes brazenly roaming around the city streets and lanes.

There is talk of thousands of policemen, Rangers, and other para-military forces devotedly performing their assigned tasks of maintaining peace and providing security to citizens. This claim is assiduously proclaimed by President Zardari’s Interior Minister Rehman “Baba” Malik as well as by newcomer Sindh Home Minister Manzoor Wassan. Unfortunately, one is a publicity-freak who ensures that he comes up with a new weekly theory, however preposterous, while the other professes to have “dreams” on every subject except how to usher in peace.

The main causes for this bloodshed, for this deteriorating law and order, for this breakdown in Karachi are not something that arose overnight. These are the outcome of the past decade of buildup of brutal power, manipulation, and control by new and old political and religious organizations. Bagh-e-Qassim at Sea View Clifton in Mid-Night...

In USA, especially in New York City, there was a time when five Families of Italian-American origin made life hell for the people and the government. In everyday terms they were known as The Mafia. Among themselves, their operations were known as Cosa Nostra, which meant “Our Thing”. They were also referred to as The National Crime Syndicate and today they have an informal set up known as The Commission. The five main Mafia Families are known as the Gambino, Lucchese, Genovese, Bonanno and Colombo Families. They are all independent but nationwide coordination is thru The Commission consisting of the heads of each Family.

These Families have branched out into various legal and illegal activities but one fact still remains. They are hoodlums and they have a penchant for muscle power. They are ethnic based, they deal in drugs, they deal in land grabbing, they deal in extortion, and they have learnt how to influence the political environment. As Mario Puzo’s Godfather Don Corleone would say, “Make an offer you can’t refuse”. The five Families have faced legal challenges and a lot of laws were used to break them but inspite of all social and governmental pressure, the Mafia is still strong, powerful, and can create havoc.

The Karachi of today is also under the control of five Families. They are also primarily ethnic-based, have well-trained militants, display and use arms openly, have been accused of extortion, murders, bombings, and political muscle. Some are major players in drugs supply, land grabbing and encroachments, extortion, and can even make or break the democratically elected government. These five Families are Pakistan People’s Party, Muttahida Quami Movement, Awami National Party, Sunni Tehrik, and Tehrik-e-Taliban Pakistan.

The sad fact is that gradually over the past many years all these Families have enhanced their influence over the city and have carved out their own turfs. Three of these Families are basically political parties while the last two are more oriented towards their religious manifestations. They masquerade as religious entities but in effect they too indulge in many illegal operations such as extortion, taking over of mosques, bank robberies, etc. The PPP uses the paraphernalia of a Lyari-based radical organization, euphemistically known as Amn Committee (Peace Committee). This organization has been propped up with official backing of PPP leadership to counter the influence of MQM. The Amn Committee indulges in blatant extortion, gang-wars, drugs, and protection rackets.

The business community is faced with constant threats and demands from all those forces that are on the warpath against one another. The leaders of various markets in Karachi have devised a system where they collect a fixed amount from every shop in a particular market and the money is divided between various extortionists. The government announced the disbandment of the Amn Committee but that was just for public consumption. The Amn Committee is very much active and the chits for extortion are routinely sent to businessmen. The market gossip is that an erstwhile Sindh Home Minister who has a penchant for verbal diarrhea wants to be the Don of Karachi thru this Amn Committee.

The business community has to become strong and fight back. Enough is enough. The task is difficult but when push comes to shove then drastic steps must be taken. The businessmen are tired of being coddled by Rehman Malik. He comes up with his reassuring statements and gets live coverage on the electronic media courtesy the Chamber or the Associations. As always, his bombastic proclamations turn out to be nothing but hot air. Even the police do not take him seriously. One micro example: Few days ago at SITE Association of Industry, the industrialists questioned the procedure of parading alleged criminals by making them wear a hood so that their faces are not seen. Malik assured the meeting that this would be ended immediately. As always, the police hierarchy is all deaf-ears and the old system continues. It is time the business leaders refrain from inviting him at business forums. Business organizations do not need this grotesque publicity.

Businessmen must now have their own armed militia a la the notorious Blackwater of Eric Prince. They should not demand guns for themselves because this is not a doable or advisable step as the soldiers of some of the Families have, according to Malik, latest Israeli guns. Instead, they should obtain the services of counter-terrorism experts who have retired from Pakistan Army to train an elite force. In the short term, retired Army personnel should be hired as mercenaries. Karachi businesses need atleast 300 such commandos. The modus operandi would be that whenever a market or a company receives the demand for extortion, the militia hotline would be informed. The collector would be asked to come and receive the money at a mutually agreed time, and on his arrival he would be caught, hanged upside down, and submitted to third degree torture to extract information from him. Then, gasoline would be poured over him and he should be burned to death. The CD of the whole event would be dispatched to the media, the Supreme Court, and to the Family that sent the collector. This is the pragmatic approach rather than succumbing to pressure from the extortionists and also rather than handing over the collector to the police. All that is needed are four or five such actions and the extortionists would flee the city. The ludicrous step taken by the Sindh government and Malik to “mildly warn” the extortionists to leave the city is proof positive that they have no desire to control this menace.

The other steps that businessmen should take are to compel Karachi Chamber to organize a non-violent, non-cooperation protest where all members would stop depositing their taxes and utilities bills and instead would submit these with pay orders to KCCI so that the government is forced to listen to the cries of the Karachi citizens. At the same time, KCCI must get the top hierarchy of the five Families to come to KCCI where an ultimatum would be issued to all of them to stop their nefarious activities and allow the City to flourish and live in peace. They should also be given a warning to desist from calling protest days and strikes. They should also be told in no uncertain terms that these Families should voluntarily surrender their illegal arms and ammunition, not to the police but to the Pakistan Army. They should also be categorically warned that land grabbing and drugs supplies should end immediately and all such persons within their organizations should be expelled from membership and not provided any political support.

Yes, this is a tall order and as always, the Families will not pay heed. Thus it would then be a desperate call to GHQ and Supreme Court to honor their obligations under the Constitution and help save Pakistan by purging Karachi, the City of Lights, from roguish elements.

As my friend Anwar-ul-Haq, a senior officer of Federal Board of Revenue writes:

In Bastion Ke Baasi Khudaya Teray Supurd

Toofan Uth Rahe Hain Kinaron Ke Saaath Saath

Dono Ki Ik Misaal Hai, Dono Hain Khokhlay

Insan Phat Rahe Hain Gubaaro Ke Saath Saath

Majyd Aziz is a Karachi based Entrepreneur and a senior leader of the business community. He is a former Chairman of SITE Association of Industry, former President of Karachi Chamber of Commerce & Industry, and has held posts on the board various public organizations and companies.


The Economic Genocide of Karachi

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MA-LAUGH-1A Guest Post by Majyd Aziz

Peaceful environment is vital for economic growth and national prosperity. Citizens need an assurance of quality of life and this is possible thru income generation, social and physical infrastructure, security and safety, and political stability in their locality. At the same time, foreign and domestic investors, business and industrial community, and banking and stock exchange clients and customers want solid surety that their investment would be safe and profitable.

Karachi is the largest city of Pakistan with an estimated population of around 20 million and has the largest informal sector as well as the largest number of home-based workers. It accounts for a lion’s share in Pakistan’s revenue generation by contributing about 68% (KCCI annual report 2010-11) or 65% (as per City District Government Karachi report) to the national exchequer. All national and international surveys, reports, and analyses confirm that Karachi is the mainstay of the Pakistani economy.

Karachi contributes about 55% to Pakistan’s GDP, that is, about US$ 98 billion, projected to reach $130 billion by 2015 provided peace is restored in the city and suburbs. Of course, Karachi’s high share in GDP is due to its large industrial base. Karachi has 15,000 formal industrial units in its 5 industrial zones while there are 360 markets spread all over the city. It is estimated by this writer that the daily loss to the national GDP is Rs 2 billion for every hour that Karachi remains non-operational.

During the previous government’s tenure, the policies of Premier Shaukat Aziz encouraged substantial bullish activity at the Stock Exchanges. This led to a huge cash surplus that needed to be channelized to productive usage. At the same time Dubai witnessed a construction boom. Thus a formidable flight of capital was witnessed as billions of dollars were transferred thru Hundi and Hawala or thru couriers from Pakistan to UAE. This was done neither due to law and order nor due to political instability. The prime reason was the fabulous opportunities for short-term profits and the enchanting lure of Dubai.

Today, the flight of capital is in tandem with the pull-out of investment and the root cause has been the criminalization of Karachi, the breakdown of the security apparatus, and the juvenile efforts and actions of the political parties. Moreover, the near-collapse of the energy sector has proved to be extremely detrimental. Resultantly, foreign investment has dipped by 35% while domestic investment is on hold at this moment. The Stock Exchanges are at a downward trend and this has affected investment in real estate and other hitherto profitable ventures. Non-performing loans portfolio of banks is alarmingly high and State Bank of Pakistan has not been able to curb the menace of inflation.

It is entirely possible, although there are no credible facts and figures, that billions of dollars have been transferred to Malaysia, UAE, Bangladesh, and even Sri Lanka. Although most of the entrepreneurs do not acknowledge their foreign investment, the market gossip confirms that between 9 and 12 home textile manufacturers have set up industries in Bangladesh. The readymade garments manufacturers are taking a delegation to Bangladesh after Eid to scout joint ventures and investment possibilities. It is to be noted that since January 2011, European Union has allowed semi-finished and finished fabrics from SAARC countries if used by other SAARC countries, including Bangladesh, under the regime of SAARC Regional Cumulation in which the value-added products made from these intra-SAARC exports by Bangladesh would also be eligible for GSP+.

The industrialists of Karachi have to suffer law and order situation, power shortages, low water supply, and gas difficulties, as well as Pakistan not enjoying GSP+ for exports to EU. Furthermore, the trade and industry community is subject to extortion and arm-twisting by political and other organizations. This bhattha collection syndrome has taken huge proportions in the last couple of years. Unfortunately, the political parties, the government, and the law-enforcing agencies have not been able to stem this menacing tide. All these factors have compelled investors to set up or contemplate the setting up of units in other countries. There is news of funds being transferred to Quality Industrial Zone in Jordan. In Malaysia too, Pakistanis are investing heavily with emphasis on construction and trading. This was also revealed a couple of months ago by the outgoing Malaysian Consul General in Karachi.

Education has been seriously affected due to continued violence and strikes. Educational institutions are closed without any notice and examinations are postponed at the last minute. The education standard has deteriorated and has put the schooling careers of thousands at stake. KCCI estimated that about 35000 students from violence-affected areas are not attending classes while around 700 teachers are unable to take classes in Kati Pahari and Orangi, etc.

Weddings, funerals, and social gatherings have been negatively impacted and this has also affected the viability of service providers as well as employment. Daylight robbery is the norm and burglaries are an every day thing. Citizens have started to erect barriers that limit access to their neighborhoods and there is a substantial increase in demand for armed guards.

Karachi has over 15,000 industries in the organized sector while there are more than 50,000 units in the informal or unorganized sector that are generally not under the purview of either Labor Department or EOBI/SESSI etc. The workforce figures do not reflect real employment because employers tend to understate the number of their workers to these departments and agencies. However, conventional wisdom reckons that if each factory on an average employs 200 workers, then the 15,000 industries should be having in excess of 3 million direct employees. If the workers of the informal or unorganized sector are included, plus taking into account home-based workers, then one could state that Karachi provides direct employment to over 5 million workers. This does not take into account domestic workers or volunteers working infrequently.

Recently, it has been seen that strikes are becoming common again. KCCI has noted that 36 announced strikes have taken place in the recent past. So much so, that even the Karachi Port has been shut off due to strike to protest the murder of a third-tier leader of an ethnic-based political party. PIA employees went on a strike against a politically appointed Managing Director, while the KESC management-workers imbroglio made Karachi hostage to loadshedding and riots for many weeks. Few days ago, the Custom people went on strike to protest the arrest of a colleague who was nabbed for committing a fraud of over Rs 1.50 billion. Pakistan’s trade was badly affected due to non-operational status at the Custom House.

The law and order situation alongwith prolonged loadshedding has affected worker‘s productivity severely. It is estimated that productivity has fallen by over 25% even when Pakistani worker’s productivity is acknowledged as less than a comparable Bangladeshi or a Sri Lankan worker. The official GDP figure of less than 2.40% is testimony to the difficult economic conditions of Pakistan; the main reason being the state of affairs in Karachi.

The situation in Karachi is primarily due to the machinations of political parties and due to their non-chalant attitude towards Karachi. This metropolis was called The City of Lights. This appellation was cherished with devout pride by the denizens of Karachi. What happened that today it is the City of Blood, the City of Darkness, and the City of Chaos?

So, can there be a U-turn by the political parties to seriously and earnestly endeavor to bring peace? Will they listen to the “signals” emanating out of the meeting of the Formation Commanders in GHQ? Will they seriously take cognizance of the daily killings and the mayhem in Karachi?

The political parties are basically fighting to maintain their turf. These parties have protectors of strong and dominant players in gun-running, land-grabbing, and drugs-marketing. The income from these activities is phenomenal and also provides power and importance. Most of the warehouses in Khadda/Moosa Lane/Kharadar/Boulton Market/Marriott Road are owned by unscrupulous importers to take advantage of the notorious Afghan Pakistan Transit Trade Agreement as well and other import “manipulations” by bringing foreign consumable goods. They pay about Rupees 100,000 per container for night-time unloading to store goods in the warehouses while “protection” of these warehouses is another big money-making racket that was partly exposed during the Ashura bomb blast and arson at the Boulton Market two years ago.

At the same time, where on the one hand, an ethno-political party has a mesmerizing control over Karachi, then on the other hand, the other parties are striving to get a foothold in the City’s political arena and to wrest seats from the control of this ethno-political party. This has naturally brought about a harsh reaction resulting in a brutal law and order situation culminating in daily deaths in double figures.

Do the politicians really want to bring about a peaceful and livable environment in this city? The task is onerous and the journey difficult. But, if there is a will there is a way. The first and foremost step to be taken is that all party flags, posters, graffiti, and slogans must be eliminated and wiped out from the city. Secondly, there would be no display of arms at political meetings nor would the politicos move around with armed escorts. Thirdly, what is of prime importance is that the political parties must keep at bay their hardcore militants and must ensure that political patronage is not accorded to militants arrested by the law-enforcing agencies.

There have been so-called De-weaponization campaigns and at the same time clarion calls for ridding this City of arms. It is easier said than done. Thousands of arms licenses are being issued on political grounds by the Home Department. The Interior Minister reveals that sophisticated Israeli arms have found their way into Karachi. The solution is however possible. Enact a Federal law making illegal arms a crime punishable by life imprisonment. Then make sure that once a culprit is arrested, that person must be sentenced if found guilty and if there is political pressure on the law enforcers, the name of the politician pulling rank must be forwarded to the Prime Minister for taking action against that politician. Meantime, an amnesty may be declared for those possessing illegal arms. This is a tall order but efforts must be continuously made in this matter.

Lack of employment opportunities is one major reason for the despondency and for the escalation in the crime rates. A massive, fast-track program must be initiated by the government to introduce projects such as low-cost housing in this country. This would directly spur up activity in 45 industries and provide jobs for millions. This is the only viable initiative for reducing unemployment and attacking extremism, terrorism, and crimes.

Therefore, it is high time all leaders of political parties must seriously, for once, have a two-day All Parties Conference to deliberate and agree on a three-point agenda:

  1. Economy
  2. Law and Order
  3. Code of Conduct

This would be the Charter of Peace. This would be guaranteed and monitored by the Armed Forces, by the Judiciary, and by the Business Community.

HO CHUKI KHAK O KHOON KI HOLI

AE KARACHI AA TUJHE GULAB KARAIN

AAG JIS NE LAGAYI GULSHAN KO

AAO AB IS KA EHTESAAB KARAIN

 

Majyd Aziz is a Karachi based Entrepreneur and a senior leader of the business community. He is a former Chairman of SITE Association of Industry, former President of Karachi Chamber of Commerce & Industry, and has held posts on the board various public organizations and companies.



Businessmen’s Silence is Deafening

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MA-LAUGH-1A Guest Post by Majyd Aziz

PAKISTAN is fortunate to have a formidable number of experienced, visionary, and dedicated entrepreneurs who have carved out a name for themselves in trade, in industry, in social activities, and at global forums. Inspite of monumental odds and roadblocks, whether in the domestic environment or in international markets, Pakistani businessmen and industrialists have persevered and succeeded. Over the years, they also formed Chambers, Associations, Forums, and Groups to protect, promote, and project their views, their endeavors, and their organizations.

"Our lives begin to end the day we become silent about things that matter." Martin Luther King, Jr.

The trade and industry community has also boldly taken stands whenever the need arose. In 1990, under the aegis of SITE Association of Industry and APTMA, a forum SICORLO was formed to protest the deteriorating law and order situation. At that time, SICORLO issued advertisement on a daily basis making fervent appeals for the restoration of law and order. Millions of rupees were spent, and this campaign proved so effective that the government had to step in, literally pleading that this “sob-story” was giving a notorious reputation to the country and that it could turn out to be counter-productive in the long run. Things did improve for a short time thereafter and then the country was back to square one mainly due to juvenile politicians.

In 1986, under the dynamic leadership of a brave business leader, the late Ejaz Shaffi, the SITE Association of Industry led the campaign against the enforcement of a draconian system in Excise Duty that the mandarins in the erstwhile Central Board of Revenue had tried to introduce by camouflaging it as “simplification procedures”. This was a hectic nine-day protest, where five to six hundred industrialists would gather daily at SITE, keeping their factories shut, and listening to the motivational oratory of Ejaz Shaffi and other leaders. After nine days, Premier Junejo had to fly to Karachi, and at a meeting with the industrialists at the Sindh Governor House, declared that this draconian exercise planned by the egoistic CBR officers would be ended immediately. All this happened during the martial law tenure of General Zia.

The above events are narrated because I was fully involved in both. These brought me into limelight and established by bona fides as a representative of trade and industry.

In recent times, businessmen have had their protests but these have been few and ineffective. Once even FPCCI went on strike during the tenure of Benazir Bhutto but she got the better of it. Recently, a self-styled leader of small traders called a strike against extortion and law and order. Initially, the Karachi Chamber President agreed to support it but Interior Minister Rehman Malik and the Sindh Governor prevailed upon the KCCI leadership to cool down. Resultantly, the strike fizzled out and the small traders’ leader got, what Andy Warhol once said, his fifteen minutes of fame. He was a hot item for a couple of days on the media but then the party was over.

The reason I am presenting these examples is that today, when Pakistan needs to sort out its various problems, the role of the business community is zilch because it is at a crossroads. It has this feeling that policies and events in this country are working against businessmen and their very survivability is at stake. The businessmen have this feeling that they have lost whatever ground they had achieved in the last some years. A situation has developed where it seems that the businessmen are damned if they do anything and damned even if they do not do anything.

The leaders of the business community generally tend to play it safe when it comes to dealing with the ruling party, even in these days of democracy and freedom of expression. The present economic scenario and the recessionary trends in the country along with cost increases, utilities shortages and high rates, coupled with low demand, volatile business conditions, uncertainty of the rupee-dollar parity, and the deteriorating law and order situation, not to mention the upsurge in strike calls, have brought businessmen into a frenzy. Their long-term planning has gone to the dogs while in the short run the capital crunch is proving disastrous. The stock exchange is going down like a roller coaster and the media is showing the mess in vivid colors. It seems that in Islamabad the economy is on the lower strata of the government’s agenda, and the Finance Minister is spending more time in the corridors of IMF and World Bank rather than interacting with the businessmen. In his absence, the FBR fudges figures and the Finance Ministry gets pie in the face. All budgetary calculations are based on what loans and aid Pakistan will or can receive rather than endeavoring to expand the tax base at home.

Pakistan faces on-going violence in Karachi, resulting from political grievances which have been enormously magnified by extremism and lawlessness. It is a shame that the law-enforcers are so impotent that they are not able to control the city. There have been reports that they tend to become silent spectators rather than assiduously performing their obligations. Moreover, if there were no Edhi, Aman, or Chhippa ambulances, how would the injured and dead be transported to the hospitals or the morgue? And the less said about KESC, the better.

The political impasse has been putting a heavy toll not only on Karachi’s economic picture, but also on the nation’s economic progress. At the same time, the effect on foreign investment in Karachi is also being felt. The head of a multi-national stated bluntly that “foreign businessmen are now becoming reluctant to invest under the prevailing circumstances and the only option left for them is to check out other countries.” Another declared in clear terms that the US investors have lost interest in funding projects due to civil strife in Karachi. His colleague added “although foreign investment is not a panacea of all ills, yet the influx of foreign investment in power generation, infra-structure development, and other sectors could help solve crucial issues.” A Japanese representative of a trading company stated that the Karachi problem has discouraged Japanese investors from coming here and that there “is a general feeling among the foreign investors that Karachi is no longer safe to invest.” Another Japanese moaned the circular debt when requested to invest in an upcoming coal-based power project. Ominous words that further erode the image of this city.

The beef against the business leadership is that matters are taken in stride and, if need arises, a press release is issued condemning this or that. That’s it. There is apathy even when rates of utilities are increased multifold. There are murmurs but no conviction in statements or actions. Extortion by vested interests is a daily occurrence but there is acquiescence within the business leadership. Market leaders collect funds on a shop-basis and then distribute them to various extortionists and political elements. Quite easily done. No hassles.

There is no better time than now for the business leadership to catch the bull by its horns. There have been no overtures made to the political parties or to the government or even to the armed forces and judiciary. There has not been a unified stance by businessmen to play a prominent and purposeful role to handle the crisis. The silence is truly deafening. Silence is not golden in this case. The FPCCI President with the support of business leaders like Tariq Sayeed, Siraj Teli, S M Muneer, Aqil Karim Dhedhi, and Asad Umar must initiate the dialog and must energize everyone towards the resolution of the crisis. Hope is there if businessmen mediate and if businessmen put some sense in the ranks of politicians. The FPCCI President is also a Senator and thus is better placed to carry on the task.

So, what it boils down to is that circumstances could look favorable for a solution to the political and economic imbroglio that Karachi is facing. The process should begin. All it needs is a pragmatic, resolute, and sincere push from the businessmen. From Asif Ali Zardari, Altaf Hussein, and the twenty million residents who want their City to become once again a peaceful, secure, and bustling city, this is the message. Peace and prosperity soon!

"There are a million ways to lose a work day, but not even a single way to get one back."

Tom De Marco and Timothy Lister

 

Majyd Aziz is a Karachi based Entrepreneur and a senior leader of the business community. He is a former Chairman of SITE Association of Industry, former President of Karachi Chamber of Commerce & Industry, and has held posts on the board various public organizations and companies.


Impact of the OBL episode on Pakistan’s economy

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MA-PP-20110505-WB-SMALLA Guest Post by Majyd Aziz

 

The Doomsday theorists and the ignorant anti-American elements in Pakistan have become over-active after the showdown in Abbottabad. Suddenly, they are back into action with their I-told-you-so rabble rousing posture and are trying to galvanize the citizens into a universal condemnation of not only Washington but also the civilian leadership and the military hierarchy of the country. President Obama is being considered as a re-incarnate of the younger Bush while all hell is being let loose on the two well-protected high rollers safely ensconced in Islamabad. The brave among this inciting crowd, all the more fortified by the drawing room analysts and pseudo-democrats, are out to get the scalps of the two Generals who had their tenures extended.

The Formation Commanders made the right noises by warning the White House, in fact, warning the world not to attempt such an adventure again inside Pakistan’s territory. There was the usual talk about ending the drone "culture", reduction in the number of Americans moving all over this nation, and threatening to "review" cooperation between Pentagon and Rawalpindi. Hallelujah. It reminds one of the classic Peter Sellers’ movie The Mouse That Roared. It may play well in maybe Gujranwala.

However, what is missing in all this wailing and blaming is that no one has seriously considered the impact this draconian adventure would have on Pakistan’s tottering economy. Come next fiscal year, there is going to be a fundamental shift in the nation’s budget planning and revenue expectations. The Finance Minister and his jolly band went to IMF with a structured begging bowl but the high priests sitting in the citadel of this institution showed them unusual courtesy by escorting them out the exit door sans any largesse. State Bank of Pakistan big boys have put their hands up in desperation that inflation is still an uncontrolled albatross around the economy. The euphoria in Trade Development Authority of Pakistan and in the minds of less knowledgeable spin-doctors of the ruling party that the export figures would be at all-time high, based on the extraordinary performance of the raw cotton and spinning sector is fizzling out sooner than expected. Half of the spinning mills are switching off their machines because all of a sudden the global demand went poof.

Copyright: Sajjad Hussain | Getty Images

The Finance Ministry officials transformed the Ministry from a being a facilitator to trade and industry by playing their own version of contract bridge by considering themselves as "us" and the businessmen as "they". When there was genuine opposition to the introduction of the macabre Reformed General Sales Tax, some hare-brained official came out with the asinine proposal to get the country’s President to issue three Ordinances as part of the Plan ‘B’ conjured up by minions in Federal Board of Revenue. Lo and behold. The trade and industry representatives got these officials on the carpet and within no time, the Ordinances became stale jokes.

The Federal Budget is due on May 28 and the energetic but elusive Finance Minister will again attempt to teach the Parliamentarians a lesson or two in Economics 101. He has already received a bagful of help from the Presidency who outmaneuvered seasoned politicians and got them to do the tango with him. The budget would be approved but at what cost? Is the country ready to bear the ramifications of what the good Senator Doctor Sheikh has in store for the 175 million denizens? Would it be an ingenious financial vision or would it be dictated orders from IMF and other International Finance Institutions? The answer would be certain when the dust clears on the last Saturday of this month.

Should one recount what is happening on the physical infrastructure scene? Very casually and without fanfare, the nation is now short of 7000 mw of power. Very brazenly, the natural gas people unilaterally decree that gas would not be available for industries and CNG Stations. Those who decide at what cost Pakistanis would get petrol ritualistically but forcefully announce that petrol, diesel, and other petroleum products would now cost an arm and a leg.

The reason why this economic picture is being presented is to bring to the fore the very fact that the OBL episode has come at a very delicate time for Pakistan. The billions spent on the Global War on Terror by this cash-starved nation, the fabulous military victories in eliminating terrorists and extremists from the wild, wild north of the country, and the confidence reposed in the valiant forces by Pakistanis have suddenly burst like a pin pricked balloon. The general feeling was that in spite of the difficulties people faced on the economic front, it was essential and crucial that the Armed Forces were provided with everything to protect and secure the borders and the strategic assets.

This confidence in the Armed Forces must not be allowed to wane. Pakistanis must continue to support and encourage the brave forces. The entire Defense establishment must learn whatever lessons it has to learn and must carry forward. Demagogues and Fifth Columnists must be ignored and should not be given prominence by the electronic and print media.

There should not be despondency and blame-game either within the forces or among the politicians. Dejection at this stage will ruin the country by hampering its economic progress. This is the time for all decision makers to sit with the mainstream businessmen and industrialists to get the country out of this economic quagmire. The Pakistan Business Council attempted to get the politicians to sit with them at the same table and discuss the economic agenda. A noble step, but it did not create any waves because mainstream trade and industry representatives were excluded while third or fourth tier nominees from the political parties came to Serena in Islamabad to make the usual pompous statements. (Incidentally, this writer had proposed such an All-Parties Conference while taking part in a PTV program hosted by Dr Huma Baqai a couple of months back. So, credit to PBC for following it up and spending money to get politicians together).

The impact of the OBL drama would not be as damaging to the country as propagated by many analysts. This is not the time to strain relations with USA and other Western countries. Secretary of State Hillary Clinton has offered a comfort zone to Pakistan. Assurances are coming from Foggy Bottom as well as from Capitol Hill that Pakistan would be supported and that Pakistan needs maximum cooperation from Washington. This is the time for the government and even the Armed Forces to ensure that American financial assistance is not squandered away and also that Pakistan should be provided all facilities to procure smart defense technology to continue its frontline role in exterminating terrorists and extremists from this country. Emphasis should be on foreigners who have created havoc by assuming the role of so-called Jihadis. The Saudi Arabian, Sudanese, Egyptian, and the Chechen Jihadi elements must be declared persona non grata and their native countries be forced to take them back.

The recent positive outcome of the talks between the Interior Secretaries of India and Pakistan in New Delhi and the Commerce Secretaries in Islamabad and Bhurban will open new vistas of economic cooperation not only between the two countries but among all SAARC nations. This is a breath of fresh air and the expectations are positive and beneficial for Pakistan. Furthermore, there is expectation of foreign investment not only from India but also from other countries. This is the time to invite massive investment in minerals exploration, in information technology, and in livestock. These would create jobs and pump up the economy.

Pakistan cannot afford to be strangled by the OBL opera. Once lessons are learnt, once accountability has ended, and once the nation’s skies are really made impregnable, the concentration should be on the economy. The most unpatriotic thing a citizen can do at this juncture is to be persistent in carping about the capability and competency of the Armed Forces while at the same time, all those who are neglecting efforts to rejuvenate the economy are guilty of the same crime too. This is the ideal time to say "YES" to the Founder’s motto: Unity, Faith, and Discipline. By the way, what happened to Pakistan First?

 

Majyd Aziz is a Karachi based Entrepreneur and a senior leader of the business community. He is a former Chairman of SITE Association of Industry, former President of Karachi Chamber of Commerce & Industry, and has held posts on the board various public organizations and companies.


This article is taken from another source. Views expressed in this article are those of the author and may or may not be the views of From The Pulpit and DiscoMaulvi. To submit content for From The Pulpit, please email FromThePulpit [at] MuhammadAly [dot] Com.

Pakistan: Traditional security challenges and response

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Majyd Aziz

A Guest Post by Majyd Aziz

PAKISTAN is on the global radar nearly every day. The world leaders, the universal media, and the international analysts and think-tanks have their daily dose of news and views from Pakistan. The country has never been so embroiled in safeguarding its sovereignty and its security than in these intense and severe times.

EXTERNAL THREATS

  • GLOBAL WAR ON TERROR:

PAKISTAN has, over the past some years, become the flashpoint as well as the most important country in the Global War on Terror. The Al-Qaeda obsession, the fear of Pakistan’s strategic assets falling into the hands of militants and extremists, the Western penchant for containing political Islam, the ever-increasing thirst for Middle Eastern oil, the fascination with mineral resources in Afghanistan, the domineering and influencing China factor, and the fixated concern for the safety and defense of Israel, have all resulted into an ominous scenario for the Islamic countries, with the paramount brunt being borne by Pakistan.

  • MUSLIM BATTLEGROUND:

PAKISTAN has, directly or thru outside influence, become one of those Muslim countries that is now a battleground where the armed forces of various countries have joined as a coalition to achieve the American great game objectives enumerated above. The oft-repeated American mantra of “Do More” has created a deep chasm between the Washington’s flawed Af-Pak policy and the pragmatism of the High Command in Rawalpindi.

  • GEO-POLITICAL LOCATION:

PAKISTAN is in an unenviable geo-politically strategic location and is the sole Islamic nuclear power. It also borders China, India, Iran, and Afghanistan and thus any vibrations from these countries are strongly experienced within the borders of this nation. Pakistan’s international commitments to the Coalition Forces has put a disastrous dent in the already-strapped financial resources of the country, although since 2002, the United States has pumped in over US$ 10 billion in security-related support and nearly US$ 4 billion in economic support.

  • PROXY WAR:

PAKISTAN has also, for many decades, become involved in a proxy war between the two major sects of Islam. This has primarily been supported by Saudi Arabia and Iran thru financial resources, thru ideological guidance, and thru tapping of the myopic approach of the clergy of both the sects in Pakistan. This has also intensified with the rise of militancy and extremism that has played havoc with the peaceful internal environment of Pakistan.

  • INDIAN INTERFERENCE:

PAKISTAN has also been embroiled in the never-ending militaristic, propagandistic, and diplomatic onslaught by the traditional nemesis India. The non-resolution of the Kashmir issue and the atrocities committed in the Valley by the Indian armed forces, New Delhi’s skewed mindset for blaming Pakistan for every event or problem faced by India even if these are concoctions or perpetrated by third forces, the blatant interference in Balochistan by Indian-supported militants, and the demonic influence of India in instigating Kabul against Pakistan have played a disastrous toll on the resources of Pakistan.

WAY FORWARD

PAKISTAN policymakers have to juggle various options in order to maintain its relationship with the Coalition Forces and at the same time, address the concerns of citizens who see Pakistan being a pawn in what a former American National Security Advisor, Zbigniew Brzezinski, referred to as “The Grand Chessboard”. At the present moment, there is an exploding anti-American sentiment and its negative consequences are directed towards the political and at times the military hierarchy. The army is the last bastion of assurance for the people and thus this must be further consolidated and strengthened. This requires that a proper approach should be initiated by the GHQ in which the denizens of Pakistan are taken into confidence and the ground realities are presented thru a correct media approach. It is imperative that the population be mobilized, it is important that the country’s strategic assets must be modernized and deployed within a given time frame, the nation’s political elements must have the stamina and critical mass to generate diplomatic and moral support for the armed forces, and more importantly, trade and industry must provide the needed back-up thru mobilization of financial resources, thru international image building, and thru private–public partnerships in areas crucial for the military to become a potent power. The Ministry of Foreign Affairs needs to be pro-active in economic diplomacy, in promoting a soft image of the country, and being aggressive in public international relations. This rethinking is essential in the countering the negative implications of external threats as well as removing the perception that Pakistan is subservient to Washington’s dictates.

INTERNAL THREATS

  • ISSUES:

PAKISTAN also suffers from the ignominy of being in a quagmire of internal problems that either are fallout from the effects of the external threats or are also self-created or self-generated due to non-resolution or diffidence to these issues in the past. These threats are as follows:

  • ECONOMIC FRAGILITY:

PAKISTAN has witnessed a severe economic downturn over the past couple of years. The nation has seen inflation inching towards the 20% mark while the State Bank of Pakistan is religiously increasing the discount rate in every Monetary Policy announcement. The unemployment lines are increasing daily while industrial investment has stagnated. Non-performing bank loans have breached the Rs 500 billion threshold, while the government keeps obtaining loans from commercial banks and the State Bank of Pakistan. The foreign exchange reserves are positive and at an all-time high, but at the same time, the external debt is over US$ 57 billion and growing. IMF has blocked the release of the next Tranche citing the inability of the government to undertake taxation reforms, specifically Reformed General Sales Tax (RGST).

  • NATIONAL NON-INTEGRATION:

PAKISTAN is currently facing the negative ramifications from various actions taken or ignored by successive governments especially in trying to achieve national integration. The hard stand taken by the Musharraf government in the Kalabagh Dam issue pitched Punjab against the three smaller Provinces. The Akber Bugti episode alienated a significant percentage of Balochis resulting in the influence of the Balochistan Liberation Army which itself became fodder for Indian and other countries’ manipulations and machinations. The renaming of NWFP as KPK brought Pakhtuns and non-Pakhtuns at loggerheads and the issue continues to create heartburns. Even the disastrous Lal Masjid imbroglio created rifts within the country. Recently, the exercise to amend the Law of Blasphemy has further vitiated the already traumatized nation. Punjab’s Governor became a fatal victim due to his vociferous views on this law. The obsession of various political parties to use the parochial card also aggravates the delicate environment. While PML (N) uses the Punjab Card, the PPP depends on flashing the Sindh Card to achieve desired objectives. Of course, the Raymond Davis problem is another gigantic headache for the government and other political parties.

  • SECTARIAN DIVERGENCE:

PAKISTAN also suffers from the menace of sectarian divide. The Sunni-Shia issue is exploited by inimical forces to create a disturbing law and order situation in the country. The Deobandi and Barelvi routinely fight over ideology and rituals and this has been intensified by suicide attacks on shrines and mosques. Ahmadis, Christians, and Hindus also face threats to their lives, property, and places of worship. Hindu families prefer migration to India rather than living in perpetual fear. Theocracy has managed to exert control over many aspects of daily lives of citizens. Unrestrained leeway is accorded to rabble-rousers who cash in on the misguided sentiments of people and use this to further their own agenda. The misuse of the Madrassahs has eroded the sanctity of these important learning institutions

  • ETHNIC POLARIZATION:

PAKISTAN is also facing suffocation due to ethnic distrust or ethnic hegemony. The emergence of ethnic-based political parties has further intensified this polarization. The country is still trying to figure out how many ethnic nationalities are dominant in the country. Turf wars between the land mafia or the drug mafia or even criminals are portrayed as ethnic clashes and this tainted colorization destroys civic peace and harmony. Karachi is a perennial hostage to the conflict created by the two major ethnic groups, each with its own vituperative agenda and blatant disregard for the consequences.

  • POLITICAL STABILITY:

PAKISTAN is endowed with juvenile politicians who are still unsure whether they have grown out of the influence of military rule since they still harbor the draconian tendencies and wield the proverbial machete on real or perceived political enemies. The concept of a democratic order is espoused ad nauseam and every action or statement against them is defined as an anti-democracy offensive. Opposition for the sake of opposition is the norm and the advent of talk shows on electronic media has further stoked up this instability and this infighting. Moral as well as material corruption has generally been the hallmark of a political government and this has ensued into a situation where institutions are brought to the precipice of disaster and where the country’s resources, whether these are financial, human, natural, infrastructure, or strategic are ravaged, plundered, and brazenly exploited.

WAY FORWARD

PAKISTAN is a country that in the past six decades has been subject to five or six wars, that has seen devastation due to floods and earthquakes, that has never reconciled to the fact that all its residents are Pakistanis firsts, that has seen political experimentation that has always boomeranged diabolically on the experimenters, and in the process, brought pain and sorrow to the citizens. What is imperative is a sincere effort to achieve reconciliation and integration that would usher in progress and prosperity, and would open new avenues of economic support and improvement in the quality of life for the citizens. What is essential is that intellectuals and social activists must ensure that people are motivated towards achieving a better and livable Pakistan rather than developing an apathetic mindset that gradually erodes every sense of nationalistic participation.

PAKISTAN has the largest percentage of youth in the world. 60% of the population is under 25 years of age. At this moment, the present, as well as the future, looks bleak for them. This negativism leads to resignation and that in turn impels them to drift towards anti-state elements who then use these young people as human cannonballs. The passion and energy of the youth have to be harnessed in a positive mode thru a visionary process that can be possible only when the policymakers themselves become immune to narrow-mindedness and parochial biases. The Armed Forces can play a prominent role in this respect. ISPR can initiate and finance motivational programs that can ignite the fire of patriotism, national integration, and challenges in the youth of today. The business community can contribute towards the development of the youth by supporting programs for entrepreneurship, for skills development, and for venture capitalism. The reason why focus should be on the youth is very logical. Nationalism and patriotism are forgotten words today. The youth of Pakistan must be steered on to the right path as they hold the key to the future prosperity of this motherland. Chinese President Hu Jintao, in his speech to the Chinese Parliament stated, “Let’s build a harmonious society in which the no-holds barred economic growth will be replaced with a more socially responsible form of development, with increased spending on education, healthcare and rural infrastructure”.

February 18, 2011

Majyd Aziz is a Karachi based Entrepreneur and a senior leader of the business community. He is a former Chairman of SITE Association of Industry, former President of Karachi Chamber of Commerce & Industry and has held posts on the board various public organizations and companies.

Views expresses in guest posts are the opinions of the author and may not necessarily reflect the opinions of DiscoMaulvi and From The Pulpit…

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