Declining industrial Output, Pakistan (JR85)

 

Declining industrial Output, Pakistan (JR85)

Introduction

Pakistan is ranked among the countries of the world in nominal GDP, 26th in GDP with purchasing power parity and number 55 in the world in factory output Pakistan's industrial sector accounts for about 24% of GDP. Cotton textile production and apparel manufacturing are Pakistan's largest industries, accounting for about 66% of the merchandise exports and almost 40% of the employed labor force. Cotton and cotton-based products account for 61% of export earnings of Pakistan.  

Economic growth in Pakistan has historically remained volatile, lacking a steady growth path and adding to the economic uncertainty about the country’s economic conditions. Historical data suggests that the economy reached a high of above 10 percent growth level in 1954, but the following year it declined to 2 percent and went up again to above 9 percent in 1969 and 1970. Then it dipped again to 1.2 percent in the following year. Likewise, it reached 7.5 percent in 2004-05 but slowed down to 5.6 percent next year and further dropped to 5.5 percent in 2006- 07. From 2007-08 to 2012-13 the economy grew by 3.2 percent on an average

Major sectors in industries include cement, fertilizer, edible oil, sugar, steel, tobacco, chemicals, machinery, food processing and medical instruments, primarily surgical. Pakistan is one of the largest manufacturers and exporters of surgical instruments

It is ironic that Pakistan, which was among the first of the “East Asians” emulated by Korea in the early 1960s, has now to relearn not only from the East Asians who have left it far behind, but also lesser, albeit significant, successes elsewhere.

Pakistan was at the forefront of export promotion, while retaining very high levels of protection and what has been labeled an “import substitution industrialization” strategy. In 1965, its manufactured exports at US$ 190 million (current $) were almost double those of Korea (US$ 104 million); some 42 percent and 15 percent higher than Brazil and Mexico, respectively; and exceeded the combined total of such exports from Indonesia, the Philippines, Thailand, Turkey, and Malaysia. By 1985, exports of manufactures from Pakistan, at US$ 1,731 million, were well below all these countries’ exports (manufactures), ranging from 80 percent of the level in Indonesia to 6 percent of that in Korea.

Historical Background

At the time of independence the total large scales industrial contribution was only 1.8% to GDP. The small-scale industries however, contributed 4.6% to GDP. Pakistan at the time of partition in 1947 had a negligible industrial base. It got only 34 industries out of 955, while remaining were held by India. Such a small number of industries were not enough for a newly born country to face the industrialized world. With the passage of time Pakistan utilized it’s all available resources domestic as well as external for rapid development of manufacturing sector.

GROWTH OF MANUFACTURING SECTOR FROM 1947- 1950

In 1947 Out of 955 industrial units operating in the British India, Pakistan got only 34 industries i.e. 4% of the total industries established in the Subcontinent. The rest were located in India. The industries which came to the share of Pakistan were of a comparatively small size and were based on raw material. These industries included small sugar mills, cotton ginning factories, flour mills, rice husking mills and canning factories etc. In 1947 it was suggested in the Industrial conference of Pakistan to establish industries, which use locally produced raw material like jute, cotton, hide and skins. The Government also set up an Industrial Finance Corporation, Industrial Investment and Credit Corporation in 1948. In the period from 1947 to 1950, the private entrepreneurs invested in those industries which showed the highest profit. The contribution of manufacturing sector was 6.9% to GDP in 1950.

GROWTH OF MANUFACTURING SECTOR IN 1950'S

In 1952 the Government took the initiative and established Pakistan Industrial Development Corporation (PIDC) to invest in those industries which require heavy initial investment. PIDC major investment was in paper and paper board, cement, fertilizer, jute mills and the Sui Karachi gas pipeline. PIDC by June, 1971 had completed 59 industrial units and created a base for self sustained growth in the industrial sector. A large number of new industries were established. The production capacity of the already existing units like fertilizers, jute and paper was considerably expanded. The reduction of export duties and the introduction of Export Bonus Scheme in 1958 increased export of the manufactured goods. The share of industrial sector to GDP rose from 9.7% in 1954-55 to 11.9% in 1959-60.

GROWTH OF MANUFACTURING SECTOR IN 1960'S

 In 1960’s there was a shift in the establishment of consumer goods industries to heavy industries such as machine tools, petro-chemical, electrical complex, iron and steel. The industrial performance in terms of growth, export and productivity increased during the Second Five Year Plan period. The share of industrial sector to GNP went up to 11.8% from 1960 to 1965. The manufacturing sector could achieve a growth rate of 7.8% against the Plan target of 10%.

PERFORMANCE OF MANUFACTURING SECTOR IN 1970'S

The industrial performance in terms of growth, exports and production was disappointing from 1971 to 1977. There were various reasons for the poor performance of the manufacturing sector. One wing of the country (East Pakistan) was forcibly separated. The Country had to fight a war with India in 1970. The suspension of foreign aid, loss of indigenous market (East Pakistan), fall in exports, unfavorable investment climate, and floods, recession in world trade and reduction in investment incentives caused a fall in the output of large scale industries. The annual growth rate fell to 2.8% in the manufacturing sector in this period. From July, 1977 to 1980, the Government initiated a large number of measures to revise the economy. Cotton ginning, rice husking and flour milling were denationalized. The private sector was encouraged to invest in large scale industries.

MANUFACTURING SECTOR GROWTH IN THE 90’s

Since 1990, Pakistan has fallen far out of the top rankings of the GDP growth league, with a rate of around 4.4 percent a year over 1990– 2010.  

MANUFACTURING SECTOR GROWTH in Period 2002-2011

The share of industrial sector was 5.8% in GDP growth rate in 2003-04. However it increased to 13.1% in the year 2004-05 mainly due to factors presented  as follows;  Monetary Policy v Financial Discipline;  Consistency and Continuity of Development Policies ; Strengthening of Domestic Demand ; Continuously Improving Macroeconomic Environment ; A Stable Rate v Global Expansion of Markets Due To Liberalization Of Trade In 2005 Years 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 Share in GDP (Rate) 5.8% 13.1% 9.9% 4.1% 8.8% 1.4% -1.9% 4.9%

In 2005 the contribution of industrial sector in GDP growth rate was 9.9% which was decline to 4.1% in 2006 REASONS the decline in manufacturing sector was due to multiple reasons like the reduced production of cotton crops, sugar shortage, steel and iron problems and global oil price.  From 2006 to 2007 there was an increase in the industrial sector contribution towards the GDP growth rate. REASONS: Major reasons for the growth in 2007 were production of sugar which was estimated at 61.5 Million Metric Ton (MMT), an increase of 12% over previous year due to increase in area under cultivation and yield. In 2007, the industrial sector grew by 14% and accounted for 27% of the gross domestic product (GDP) based on purchasing power parity. v Oil and gas exploration increased by 34% and 74%, respectively, in 2007 compared with that of 2006. Textile exports in 1999 were $5.2 billion and rose to become $10.5 billion by 2007.

In 2008 and 2009 there was a drastic decline in the industrial sector contribution towards the GDP growth rate. REASONS the industrial sector has recorded its weakest growth in a decade during fiscal year 2008-09 due to;.  impact of severe energy shortages; Decline in domestic law and order situation; The economic development has been slowed down in 2008 because of the large price increase of some commodities such as oil and food, global financial Crisis, and national political issues that affect the manufacturing growth.  During 2010-11, the domestic industrial sector recovered from the longest ever decline (seen in the previous year) to record a decent growth of 4.9 percent. REASONS: The recovery came mainly due to supportive macroeconomic policies, relatively lower inflation, improved prospects of global economy, and relatively better credit availability.  The growth in 2010-11 was the fourth highest growth rate in the decade, but was still below the 10-year average of 5.7 percent. The industrial growth during 2010-11 is mainly from a rebound in manufacturing and construction sectors as government reversed some taxes imposed last year.

MANUFACTURING GROWTH 2011-2018

The large-scale manufacturing output is primarily based on Quantum Index Manufacturing (QIM) data, which show an increase by 5.06 percent from July 2016 to March 2017. Major contributors to this growth are sugar (29.33 percent), cement (7.19 percent), tractors (72.9 percent), trucks (39.31 percent) and buses (19.71 percent). High growth of sugar is based on production of 73.9

Million Tons of Sugarcane as compared to 65.5 million tons last year, which represents an increase by 12.4 percent. Large Scale Manufacturing growth has picked up momentum and posted a strong 10.5 percent growth in the month of March 2017 compared to 7.6 percent in March 2016. The YoY growth augurs well for further improvement in growth during the period under review. On average, the LSM growth stood at 5.06 percent during July-March FY 2017 compared to 4.6 percent in the same period last year. The sectors recording positive growth during Jul-Mar FY 2017 are textile 0.78 percent, food and beverages 9.65 percent, pharmaceuticals 8.74 percent, non-metallic minerals 7.11 percent, cement 7.19 percent, automobiles 11.31 percent, iron & steel 16.58 percent, fertilizer 1.32 percent, electronics 15.24 percent, paper & board 5.08 percent, engineering products 2.37 percent, and rubber products 0.04 percent. Pakistan is bestowed with all kinds of resources

During July-March FY 2017, the Large Scale Manufacturing (LSM) registered an impressive growth of 5.1 percent as compared to 4.6 percent in the same period last year. On Year on Year (YoY), LSM recorded exorbitant growth of 10.5 percent in March 2017 compared to 7.6 percent of the corresponding month last year.

The industry specific data shows that Iron & Steel products recorded highest growth of 16.58 percent, Electronics 15.24 percent, Automobiles 11.31 percent, Food, Beverages & Tobacco 9.65 percent, Pharmaceuticals 8.74 percent, Non Metallic mineral products 7.11 percent, Paper and Board 5.08 percent, Engineering Products 2.37 percent, Fertilizers 1.32 percent, Textile 0.78 percent and Rubber Products 0.04 percent. The other sectors that showed decline included Wood Product -95.04 percent, Leather products -17.97 percent, Chemicals -2.20 percent and Coke & Petroleum Products -0.32. In automobile sector, there has been surge in productions of all its sub sectors Remarkable growth has been witnessed in Farm Tractors which is recorded at 72.9 percent, Trucks 39.3 percent, Jeeps & Cars 4.68 percent, motor cycles 21.4 percent, Buses 19.7 percent during July-March FY 2017 as compared to corresponding period last year, whereas LCVs production declined by 36.9 percent. Automobile sector is among the top growth sector in the large scale manufacturing in Pakistan. The negative growth in case of Light Commercial Vehicles (LCVs) resulted from the discontinuation of Apna Rozgar Scheme but was compensated by increased production of other models and growth in tractors and trucks. The trucks production has risen due to economic activity in the country to meet CPEC related material and freight transport needs.

Pakistan's Industrial production fell 3.3 % YoY in Aug 2018, following an increase of 1.1 % YoY in the previous month. Pakistan's Industrial production index growth rate YoY  grew from Apr 2008 to Aug 2018, with an average rate of 2.6 %. The data reached an all-time high of 14.4 % in Jul 2017 and a record low of -19.6 % in Mar 2009.

Growth Rates (%)

List	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018
Industrial sector	17.37%	6.51%	3.63%	7.73%	8.47%	-5.21%	3.42%	4.51%	2.55%	0.75%	4.53%	5.18%	5.69%	5.43%	5.80%
Manufacturing sector	16.38%	16.03%	9.39%	9.03%	6.10%	-4.18%	1.37%	2.50%	2.08%	4.85%	5.65%	3.88%	3.69%	5.82%	6.24%
Large Scale Manufacturing	18.83%	18.12%	9.92%	9.58%	6.10%	-6.04%	0.41%	1.66%	1.13%	4.46%	5.46%	3.28%	2.98%	5.62%	6.13%
Small Scale Manufacturing	7.51%	7.51%	8.70%	8.25%	8.34%	8.57%	8.47%	8.51%	8.35%	8.28%	8.29%	8.21%	8.19%	8.15%	8.18%

Pakistan's industrial sector accounts for about 20.9% of GDP. In 2018 it recorded a growth of 5.80% as compared to the growth of 5.43% last year. Manufacturing is the most vibrant sub sector of the industrial sector having 64.8% contribution in the industrial sector and in GDP it accounts for 13.6%. Manufacturing sub-sector is further divided in three components including large-scale manufacturing (LSM) with the share of 79.6% percent in manufacturing sector, small scale manufacturing share is 13.8 percent in manufacturing sector, while slaughtering contributes 6.5 percent in the manufacturing. The government is privatizing large-scale industrial units, and the public sector accounts for a shrinking proportion of industrial output, while growth in overall industrial output (including the private sector) has accelerated. Government policies aim to diversify the country's industrial base and bolster export industries.  .

In Pakistan SMEs have a significant contribution in the total GDP of Pakistan, according to SMEDA and Economic survey reports, the share in the annual GDP is 40% likewise SMEs generating significant employment opportunities for skilled workers and entrepreneurs. Small and medium scale firms represent nearly 90% of all the enterprises in Pakistan and employ 80% of the non-agricultural labor force. These figures indicate the potential and further growth in this sector.^[  Pakistan's largest corporation are mostly involved in utilities like oil, gas and telecommunication:

MANUFACTURING INDUSTRIES IN PAKISTAN

Pakistan ranks forty-first in the world in factory output. Pakistan’s manufacturing sector accounts for about 25% of GDP. Following are the main industries of the country: ØTextile Industry ØSports Industry ØSugar Industry ØCement Industry ØFertilizer Industry. Other Major Industries Include: Ø Automobile Ø Leather products Ø Paper & board Ø Pharmaceuticals Ø Chemical Ø Engineering items Ø Electronic Ø Non-metallic minerals Ø Petroleum products Ø Food, beverages & tobacco Ø Mining and Quarrying Ø Services Sector Ø Agriculture Ø Live Stock Ø Steel Ø Electricity and Gas

CAUSES OF INDUSTRIAL BACKWARDNESS IN PAKISTAN:

Political Instability ; Lack Of Capital ; Limited Market ; People preferring  foreign goods; Communication & Transportation inadequacies ;   Energy Crisis, shortages and prices higher than other competing countries  ; Economic and bureaucratic Restrictions ; Gap between targets and achievements ; Inefficiency ;  Lack of Modern Technology ;  New Competitors ;  Low Foreign Investment ;  High Interest Rates ; Lack of Technical Knowledge ; Corruption in related government agencies and  govt. agencies intervention ;  inimical trade agreements and premature opening and liberalization of markets ; and  Lack of trained manpower

It has found that   the price of energy, price of machinery and transport and wages have grown faster than the general price level. Moreover, both the composite factor input price index and composite non-factor input price index have grown at a rate higher than that of export price index. This raises the cancers that profits in the manufacturing sector are eroding over the sample period. And if it continues then it is likely that with the passage of time it becomes very hard for exporters to stay in business – especially in the new liberalized market. The analysis further suggests that even though the growth in productivity is offsetting the negative impact of the growth in input factor prices, over the sample period as a whole, the growth in productivity itself depicts a declining trend, TFP growth has failed even to offset the extent to which input price increases have outpaced increase in the export price index.

Education is a key component for economic progress. Unfortunately, our current literacy is 60 percent, least in South Asian countries. About 25 million children in are out of school. More importantly, on grass root level, thousands of schools are lacking very basic facilities such of sanitation, water, electricity, boundary walls etc. 

Pakistan is de-industrializing – the contribution of manufacturing at 12.1% in 2018 is down from a high of 17.5% in 2005. This decline in share of manufacturing has seen Pakistan’s share of global exports staying flat while those of competitor countries have seen large increases.

A lack of focus on industry is seeing Pakistan lag other South Asian countries in growth in manufacturing and composition of manufactured goods in exports.

Without significant intervention to reverse this trend of deindustrialization, Pakistan will continue to be plagued by high unemployment and a low export base as the country continues to focus on commodities, intermediate goods or low value added finished products. The current account deficit will grow if we continue to import sophisticated consumer products for which a manufacturing base no longer exists in the country, nor there appears to be a plan to create, to leverage on a large domestic market of 200 million + consumers.

SELECTION OF AREAS OF INTEREST FOR INDUSTRIAL REVIVAL

On choice of industry, recent proposals include Amjad’s (2006) call for targeting IT, Rahim’s (2012) suggestion to subcontract in international value chains, Haque’s (2014) idea of focusing on export competitiveness, and Burki’s (2008) proposal to pick “winners” focused on small and medium enterprises, notably agro-processing, small-scale engineering, leather products, and IT in the Punjab. Burki also calls for analytical work to pick “winners” by carefully assessing the opportunities in both domestic and foreign markets.

In identifying the targets of LIT policies, one promising approach is that proposed by Lin (2014), who argues that, “for an industrial policy to be successful, it should target sectors that conform to the economy’s latent comparative advantage. The latent comparative advantage refers to an industry in which the economy has low factor costs of production but the transaction costs are too high to be competitive in domestic and international markets.” In answering the question, “How are governments able to pick the sectors that are in line with the economy’s latent comparative advantages?” Lin says that a “short answer is to target industries in dynamically growing countries with a similar endowment structure and somewhat higher income.” Elsewhere, he has spoken of “somewhat higher income” as being not much higher than roughly two or three times the per capita income of the economy at hand.

A cluster approach, i.e., an agglomeration of key industries, supporting sectors, infrastructures, and institutions that are inter-linked, and inter-dependent because of some shared technological or skill base, can be quite helpful in the development of vendors. The clusters funds provided by government can be used to carry contract research which would enhance the technological landscape. As a result, entrepreneurs would be able to use the imported technology in a better way, also be able to implement ancillary system such as quality control, material handling and distribution system.

Review of past interventions suggests that efforts failed when institutions were allowed tp grow too big and centralized. These need o operate at a local level and should cater to the needs of a carefully identified target group either within a region or a sector. Past efforts have faltered due to overlap between institutions involving duplication and waste. SMEs benefit if grouped within a sector to a area or an industrial estate The spontaneous growth of clusters would be ideal Clustering fosters productivity through inter firm relations.Upgrading technology is vital for development of the SMEs , whilst upgrading skills of the managers and workers is important without a technological upgrade the sector will not perform to expectations

RECOMMENDATIONS:

Here are some suggestions to stabilize the manufacturing sector:

- Government must unveil a solid industrial policy keeping in view the global requirements.

- In order to increase the share of the industrial sector in the GDP there is dire need to establish new industrial estate in the country.

- To enhance the contribution of existing industrial estates in the economy they should be facilitated by the government policies.

- Industrialists be given loans on easy installments, so as they could run industries smoothly.

- New markets for the local products are explored and the quality of local products be improved to increase the demand abroad.

- New technical universities and institutions be established for the guidance of the labor and equip them with the modern techniques being used in the industry.

 -Means of communication and basic infrastructure required for industry like roads, transportation etc. should improved and enhanced to make the access easy.

- New and emerging entrepreneurs must be encouraged to lead the industrial sector and make investments.

- The crisis of energy must be resolved on priority basis and interrupted supply of energy to industry be ensured. Prices of energy provided should be competitive with those available to competing counties industries

-Law and order situation be improved to allure the investors to invest their money and time.

 - More attentions should be given to increase export.

- Import substitution products are produced to encourage people to use local products.

 - Realistic and up-to-date statistics is provided to this sector.

 - Small & Medium Enterprises (SMEs) need special attention and encouragement as these provide more employment per unit of capital invested than larger industrial units.

In this regard steps should be taken to curtail the growths in input prices, particularly the price of energy and raw material. For instance, growth in energy prices can be addressed through proper government policies. It can be said that increase in petroleum price, to an extent, comes from outside (as linked to international price) but increase in electricity price is a burden created as a result of domestic policies, which creates a burden on manufacturing sector.

Pakistan needs a new Industrial policy. The new industrial policy   should revolve around a “Made-in-Pakistan” theme and be driven by three key success metrics: a) creation of incremental jobs, b) an increase in value-added exports, and c) import substitution. The key policy enablers required to ensure that a new industrial policy achieves its targeted goals include:

Fiscal Policy Reforms: The tax burden needs to be evenly spread out with all sectors paying their due share. Manufacturing with a 12.1% share of the GDP cannot contribute 58% to the tax collection. Fiscal policy making should be separated from tax administration. Taxes should be on profits as opposed to any other proxies of profit, further the number of taxes need to be reduced and multiplicity of tax authorities be rationalized through the creation of a National Tax Authority. Tax rates need to be regionally competitive and brought down significantly to ensure that there is a level playing field between the formal and informal sectors.

Tariff Reforms & Strengthening of the NTC: A cascading tariff structure for imports where tariffs are highest on finished products domestically produced while being lowest on raw materials and intermediate products not available locally. This cascading tariff structure is essential if Pakistan is to become part of global value chains. Similarly, the National Tariff Commission has to take a more aggressive approach when it comes to protecting domestic industry; it needs to take inspiration from similar institutions in India, Indonesia and Turkey.

A Pragmatic Approach to Trade Agreements: A moratorium on the signing of new trade agreements. All existing trade agreements need to be renegotiated with the aim of ensuring that trade agreements, current and future lead to preferential access for value-added items as opposed to commodities or intermediate inputs. In addition, the impact on tax revenues and jobs also needs to be assessed.

Foreign Direct Investments: Policy should focus on import substitution, exports, technology, capital and risk-intensive sectors rather than on short payback, domestic consumption oriented industries that reap the demographic dividend of Pakistan’s large and growing middle class.

Corporatization & Consolidation: The formation of corporate needs to be promoted as it improves the governance standards and accountability. Companies should not be taxed at rates higher than those applicable on individuals and associations of persons. Also companies should be encouraged to grow in scale through consolidation using tools such as Holding Companies and Group Relief. Anomalies in the Companies Act 2017 need to be addressed.

A Trained and Productive Workforce: Skills need to be developed through public-private partnerships. Businesses must be allowed to retain and invest the WWF & WPPF balance (after distribution to labor) to focus on upgrading skills. A common national labor policy that benchmarks competitor countries needs to be formulated.

The Small and Medium Enterprises: The Small and Medium Enterprises (SMEs) is the engine of growth for employment, whereas larger businesses are more capital intensive. The transaction costs involved in embedding SMEs in the value chains of larger businesses especially those in the export sectors needs to be addressed. The banking sector needs to be less risk-averse to lending to the SMEs and ways need to be found to make credit available to SMEs who supply large exporters.

UPDATE

A coherent, overarching industrial policy will serve to expand the manufacturing base. It may also loosen the grip of brokers and trade agents on the economy who were instrumental in stunting the country`s natural pace of growth,` commented a retired bureaucrat who served in both the ministries of industries and commerce. This oversight does not appear to be an accident. The economy is beset by rent seeking resulting in rampant inefficiencies.
It is evident that the country`s expanding market has served overseas manufacturers better. Imported consumer items are not just stacked on supermarket shelves, roadside shacks and roaming sellers depend on cheap supplies dumped in wholesale markets across the country. Trade partners particularly China, Japan, India, Malaysia, Indonesia and even Bangladesh have capitalized on easy access to Pakistani markets both legally and through parallel channels.
Flawed policies corrupted the business class of the country that became risk averse, demanding guaranteed profits. This class adhered religiously to the notion of privatizing gains and socializing losses,` commented an economist, the nascent industry (toy, plastic, ceramic, engineering, textiles, tyre and tubes, footwear, etc.) is barely surviving in a hostile environment.
The depression in the manufacturing sector changed the composition of exports. Instead of switching to value added goods the country ended up exporting more unprocessed goods. It fetched a low price for high volumes and enabled competitors in the region to beat us down in the value added category on the strength of importing cheap raw material from us. The performance of Bangladesh in textiles is a case in point. The promotion of a labor intensive industry (textile, agriculture, engineering, petrochemical, IT, pharmaceuticals, oil and gas, ceramic, footwear, furniture and mining) will assist to absorb the unemployed youth. •

With a population of more than 200 million people, Pakistan may be a growing market for foreign electronic goods and mobile phones. But a host of issues relating to the business environment, taxation and low purchasing power of consumers continue to keep them from investing in the manufacturing industry here.

`Pakistan is a strategic market for us... but it still remains a very small market for electronic goods because of the low purchasing power of consumers,` TCL Pakistan General Manager Sunny Yang said in response to a question whether her company planned to invest in TV parts manufacturing in Pakistan. She went on to list problems that foreign companies have to take into account when the time for making such a decision comes up.

`A small market size or the low purchasing power of consumers isn`t the only issue... a company has to consider the country situation as well, added the executive of the world`s third largest LED TV manufacturer from China, which entered the Pakistan market back in 2013. Before that, it marketed LED TVs in Pakistan as a vendor of the Nobel brand 2006 onwards.

`The ever-changing customs tariffs, exchange rate volatility leading to economic instability and a growing grey market of illegal and under-invoiced goods hurt a manufacturer`s pricing structure and its ability to plan for future,` she argued. `On top of these, there is this issue of inconsistency in policies. Every (foreign) investor wants to have a reliable policy environment and tax and other incentives for the next 20 or 25 years to plan for the long term.

`Just consider the example of the customs duty for TV assemblers in Pakistan. When we came here five years back, it was five per cent. Today it is 30pc, including 10pc regulatory duty (RD).

Similarly, the dollar was priced at Rs99. Today it has fallen to Rs140. Can we pass on the full impact of higher tariffs and exchange rate depreciation to consumers? No, we cannot. The presence of illegal, grey market makes it even more difficult for a company like ours to recover the cost. These things don`t affect us alone. Every business in Pakistan is facing these problems, she says Board of Investment (Bol) Chairman Haroon Sharif agrees with Ms Sunny`s assessment of the factors impeding fresh (foreign) investment in Pakistan. `We are aware of these issues... foreign investors need protection and we`re making decisions that are required to improve the business environment to attract FDI flows,` he told this correspondent recently. Ms Sunny said the demand for high-end electronic goods was growing in the country as Pakistani consumers became more aware of global brands and technology. `For the last few years, the market has been shifting towards bigger-sized panels and smart and 4K TVs. This is a positive development for our company because we already have a strong presence in this market. TV sales by different foreign and local brands, for instance, are believed to be around 1.2m a year. Their demand is growing at an annual rate of 10-12pc. She was hopeful about a spike in the demand of electronic goods in Pakistan once economic growth picked up pace and the China-Pakistan Economic Corridor completed. `Going forward, we are hopeful that the problems (facing foreign investors) will be taken care of and an environment conducive for doing business created. ` •

 i
Specific Focus Industries to Promote Jobs, Value-added Exports & Import Substitution

·         Textiles

·         Marble and precious stones  industry

·         Agriculture

·         Engineering – Iron & Steel

·         Integrated Petro-Chemicals Complex

·         IT & Business Process Outsourcing (BPO)

·         Pharmaceuticals

·         Oil & Gas Sector

·         Other Sectors including ceramics, footwear, tires, mining & furniture

·         Leather industry

·         Cut flower

·         Automotive industry

Dec., 25, 2018

Adviser to Prime Minister on Commerce, Textile, Industry Production and Investment Abdul Razak Dawood said industrialization through import substitution coupled with export growth through diversification was imperative to put the country on road to progress and prosperity. , many industrial units had been closed down due to which Pakistan`s export dwindled from $25-20 billion, we are planning to give a comprehensive industrialization policy, wherein, focus will be on engineering, chemical, IT and agriculture sectors instead of the textile sector alone. That signing Free Trade Agreements (FTAs) with multiple countries has proved counterproductive for the Pakistan`s industrial sector and the government is currently renegotiating China-Pakistan agreement. FTAs with Indonesia, Malaysia, Turkey and  even China. Mr Dawood said that Indonesia currently provides duty-free access to 20 items including denim and urged exporters to take advantage of this opportunity. Regarding the FTA with Malaysia, he said that Federal Secretary Commerce Younus Dagha would visit Kuala Lumpur to renegotiate the agreement.

Dec., 27, 2018: 

The government on Wednesday reiterated its plan to revise the existing free trade agreements (FTAs) with China, on the plea that these had proved counterproductive for the country`s industrial sector. As part of revising the existing FTAs, Mr Dawood said the PTI government would sign the revised free trade agreement with China  He said the government would soon announce broad contour of the proposed industrial policy. The focus of the policy will be on promoting investment in the export sectors.  The adviser said that new sectors like engineering, chemicals, information technology and agriculture would be encouraged through incentives to enhance the country`s export proceeds. Under the proposed tariff policy, he said, duty on raw materials would be reduced.

May, 13,2019

THE manufacturing sector`s share in the annual national output or gross domestic product has been on the decline since 2008 onwards. It dropped from a high of 14.8 per cent in 2008 to 12.1pc in 2018, implying a reduction in the relative significance of this sector in the economy.

The share of large-scale manufacturing during the same period has dropped from 12.8pc to 9.7pc. The `premature` decline in manufacturing has had a direct impact on new investments in the industrial sector and on the country`s external account as its exports are stagnating and imports rising.

The growth in the manufacturing sector has slowed down since 2015 to an annualised average of 4.9pc compared with 10.5pc in Bangladesh and 8.1pc in India. Little wonder then that our share in global exports has come down to 0.12pc from 0.16pc in 2003.On the other hand, Bangladesh has increased its exports to 0.2pc from less than 0.1pc and Vietnam to 1.2pc from 0.17pc. Investment as a percentage of GDP has also stagnated at around 14pc compared with 31pc in rival India and Bangladesh, and 37pc in Vietnam.

There are several factors that have contributed to the decline in the manufacturing industry over the last decade. The major factors are said to be the cost and tax frameworks for the industry, which are not competitive regionally with countries having a similar economic and industrial structure. The cost of energy for industry in Pakistan remains one of the highest globally. The manufacturing sector that forms 12.1pc of the economy pays 58pc of the total tax revenues collected.

However, many agree that one of the most crucial reason behind premature de-industrialisation has been the implementation of extremely liberal import policies and free trade agreements (FTAs), especially with China that have led to the influx of cheaper finished goods. Furthermore, the failure to secure the country`s borders with Iran and Afghanistan has led to smuggling.

These factors indicate that Pakistan has become a net importer and a financier of jobs for other countries. The local tyre industry, for example, meets only a fifth of the total domestic demand with the remaining market dominated by imported (45pc of the markets) and smuggled (35pc of the market) tyres. The demand is increasing by 7-9pc a year, showing a huge potential for new investment and jobs in this industry alone. Nevertheless, no foreign or local investor is ready to venture into this segment because of the uneven playing field that gives a massive advantage to smuggled and cheaper imported tyres.

`Many industries have shut down or moved out. The remaining struggle forsurvival in the face of cheap imports and unchecked smuggling General Tyre Rubber Company Chief Executive Officer Hussain Kuli Khan told this correspondent.

`No one is ready to make new investments in the manufacturing sector under the current circumstances. The liberal imports and influx of under-invoiced and smuggled goods means that demand for the domestically produced merchandise has shrunk. Unless demand for the locally manufactured goods is enhanced through a cascading tariff structure that discourages imported finished goods, and borders are secured, we do not see new investments being made.

On the other hand, India has protected its domestic manufacturing industry and some of its tyre manufacturers have already expanded across the country. Many international brands have set up their manufacturing plants in India, creating thousands of jobs. Liberal imports and unchecked smuggling not only damages the ability of the local industry to grow, develop and compete internationally, but also causes massive dents to government revenue and leads to an outflow of hard earned foreign exchange.  A similar story is told by ceramic tile manufacturers. `The government has failed to protect this industry against the onslaught of smuggled tiles from Iran and dumping by China . China continues to dump tiles into Pakistan despite imposition of antidumping duties in October 2017 as the importers got a stay order from the Lahore High Court. The Ministry of Commerce hasn`t even pursued the case at the expense of local manufacturers and foreign exchange reserves.

The government should support the industries, which can help with the revival of the economy through job creation, increased tax contribution and exports. This can be done only by enhancing the demand for locally produced goods, and curbing imports and smuggling that are damaging the country like termite.` 

Salala Attack Revisited: By Sajjad Shaukat (JR84SS3)

Salala Attack Revisited: By Sajjad Shaukat (JR84SS3)

On 26th of November 2011, the US-led NATO forces attacked two Pakistani check-posts on Pak-Afghan border and martyred 24 Pakistani military personnel indiscriminately.

In this regard, two American Apache helicopters and two F-15 Eagle fighter jets targeted the two Pakistani posts, Boulder and Volcano, situated at Salala in the Baizai tehsil of Mohmand Agency. The airstrike was carried out in two phases.

Notably, the aerial attack was coordinated and deliberate, its second phase carried out by American forces after the Pakistan Army informed the ISAF command that their forces were attacking Pakistani troops–and despite this information, it continued.

In this context, a NATO inquiry said that both sides had made mistakes. Pakistan categorically rejected the inquiry report. It had earlier refused to be part of a joint inquiry. Top Pakistan Army officials denied the attack was unintentional.

Reacting to the Salala attack, Pakistan blocked the NATO ground lines of communication to Afghanistan and demanded an apology before the supply line would be unblocked.

Pakistan’s parliament unanimously approved recommendations of the Parliamentary Committee on National Security (PCNS) in connection with the re-engagement with the United States. Besides other matters, the recommendations included an immediate cessation of drone attacks and infiltration into Pakistani territory, entailing some conditions regarding supply to NATO forces in Afghanistan across the country. Besides, Pakistan should seek an unconditional apology from the US for November 26, 2011 unprovoked Salala check-posts assault.

Meanwhile, a number of American diplomats including NATO chief had visited Islamabad and met the then Prime Minister Yousaf Raza Gilani and Chief of Army Staff Gen. Ashfaq Pervez Kayani, asking them for re-opening the NATO routes. Setting aside the American pressure, they reiterated that parliament in light of the PCNS recommendations and the Defence Committee of Cabinet would decide on the issue of NATO supply, after negotiating new relationship with the US, based upon equality and non-violation of Pakistani territory.

When Pakistan government remained stern on its stand by keeping the NATO supply lines suspended for the six months in wake of US pressure tactics, on May 10, 2012, the United States House Armed Services Committee approved a bill that would prohibit the preferential procurement of goods or services from Pakistan until the “NATO supply lines are reopened.”

Meanwhile, NATO Secretary General Anders Fogh Rasmussen suggested on May 11, 2012 that Pakistan could miss out on important talks on the future of Afghanistan, if it failed to reopen supply routes in time to secure a place at a NATO summit in Chicago on May 20-21, 2012. Indirectly, he disclosed that Pakistan would not be invited to participate in the summit.

On the other side, Prime Minister Gilani confirmed that the Defence Committee of the Cabinet, would debate as to how to repair relations with America in time to attend the NATO summit in Chicago or to boycott it. While, the British Defence Minister Phillip Hamond stated that negotiations on restoration of the NATO supply is progressing in the right direction, but Pakistan would not accept any pre-condition.

In these terms, Pak-US war of nerves accelerated due to American coercive diplomacy towards Islamabad coupled with its double game. In this regard, after the 9/11 tragedy, Pakistan joined the US war against terrorism as frontline state and Islamabad was granted the status of non-NATO ally by Washington because of its earlier successes achieved by Pakistan’s Army and country’s Inter-Services Intelligence (ISI) against the Al-Qaeda militants.

Within a few years, when the US-led NATO forces felt that they were failing in coping with the stiff resistance of the Taliban in Afghanistan, they started false allegations against Pak Army and ISI of supporting the Afghan Taliban. US high officials and their media not only blamed Pakistan for cross-border terrorism in Afghanistan, but also continuously emphasized to ‘do more’ against the insurgents in tribal areas by ignoring the internal backlash in the country such as bomb blasts and suicide attacks which killed thousands of innocent people and personnel of the security.

Cold war had already started between Pakistan and the United States when hundreds of CIA agents entered Pakistan under the guise of diplomats to destabilize the country. On January 11, 2011, Raymond Davis who was CIA agent killed two Pakistanis in Lahore.

Since May 2, 2011, Pak-US relations further deteriorated when without informing Islamabad, US commandos killed Osama Bin Laden in a covert military operation. Afterwards, tension intensified, as America continued its duress on Pakistan in wake of drone attacks on FATA, while brushing aside parliament’s resolution in this respect.

Differences also increased between Islamabad and Washington, because Pakistan’s superior agency, ISI interrupted covert activities of the American so-called diplomats. Notably, ISI thwarted the anti-Pakistan activities of the agents of Blackwater and CIA which had started recruiting Pakistani nationals who were vulnerable. In this connection, with the pre-information of ISI, Pakistan’s police and other security agencies arrested a number of secret agents. On many occasions, ISI helped in stopping the clandestine activities of the CIA spies who were displaying themselves as diplomats. On the information of this top spy agency, Pakistan’s establishment expelled several American spies operating in the country. On the other side, US withheld $800 million in military aid to punish its army and ISI.

It was due to the professional competence of ISI in foiling the anti-Pakistan plot that US and India including their media accelerated deliberate propaganda against ISI.

Nevertheless, in the aftermath of the November 26 incident in Mohmand Agency, Pakistan’s bold steps such as vacation of the Shamsi Airbase, boycott the second Bonn Conference and rejection of the US investigation report regarding the deliberate attack on Salala Army check-posts accelerated tension between Islamabad and Washington.

Some American top officials accused Pakistan-based Haqqani militants behind the well-coordinated attacks in Afghanistan, which occurred on April 15, 2012. US aim was to pressurize Islamabad for restoration of the NATO transit routes.

It is  that confused in their goals, sometimes US high officials praised Pak sacrifices regarding war on terror, sometimes, admitted that stability cannot be achieved in Afghanistan without the help of Pakistan after the withdrawal of foreign troops, sometimes, threatened Islamabad to abandon the Pakistan-Iran gas pipeline project and sometimes, realized that US wants to improve its relationship with Pakistan, but at the same time, they blame Islamabad for safe-havens of militants in the country. While in connivance with India and Israel, America has been continuing its anti-Pakistan activities by supporting militancy in Pakistan and separatism in Balochistan.

Nonetheless, after the Salala incident, Pak-US war of nerves continued, it took the relationship of both the countries to the point of no return. On July 3, 2012, Defence Committee of the Cabinet permitted NATO supplies across the country to Afghanistan after the US Secretary of State Hillary Clinton apologized the killing of 24 Pakistani soldiers in November 2011 by American air strike on Slalala check posts by saying “sorry”.

Sajjad Shaukat writes on international affairs and is author of the book: US vs Islamic Militants, Invisible Balance of Power: Dangerous Shift in International Relations

Email: sajjad_logic@yahoo.com

Refocus on Mumbai Attacks (JR84SS2) By Sajjad Shaukat

                                                

Refocus on Mumbai Attacks (JR84SS2) By Sajjad Shaukat

On November 26, 2008, several persons were killed in the simultaneous terror attacks in Mumbai. Without any investigation, Indian high officials and media had started blaming Pakistan.

Mumbai attack was just another false flag operation of Indian establishment to gain sympathies of world community and defame Pakistan in the comity of nations. The whole drama was staged to put blame Pakistan and its intelligence agency, Inter-Services Intelligence (ISI).

It is notable that renowned thinkers, Hobbes, Machiavelli and Morgenthau opine that sometimes, rulers act upon immoral activities like deceit, fraud and falsehood to fulfil their countries’ selfish aims. But such a sinister politics was replaced by new trends such as fair-dealings, reconciliation and economic development. Regrettably, India is still following past politics in modern era.

Under the cover of the Mumbai catastrophe, India began a deliberate propaganda campaign against Pakistan and tried to isolate the latter in the comity of nations by showing that Islamabad was sponsoring terrorism in India. In this regard, Indian former Prime Minister Manmohan Singh and its other high officials, while repeating old rhetoric of baseless allegations, stated that Pakistan has “epicentre of terrorism” and Islamabad should “end infrastructure of terrorism.” L.K. Advani, leader of the BJP, while accusing Pakistan as the hotbed of terror in the region, said that Pakistan’s secret agency ISI should be declared a terror outfit.

In this respect, Indian top officials and TV channels had remarked that Indian Mujahideen and the banned Lashkar-e-Tayba (LeT) based in Pakistan and ISI were behind the Mumbai terror attacks. With the assistance of Indian secret agency RAW, Indian investigators fabricated a false story that 10 terrorists who executed Mumbai carnage came in a boat from Karachi and were in contact with the members of the banned Lashker-e-Taiba through phone calls. But a number of questions arise in relation to the so-called links, deliberately entangling Pakistan. First, how it is possible that the militants phoned 100 times inside Pakistan, but they did not call their families? Second, the lonely gunman Ajmal Kasab who was arrested, knew his address and why he did not indicate the names and home addresses of other 9 fugitives with whom he lived for a long time? Third, after the hard journey of more than 50 hours, travelling on the slow moving water, evading 20 coastal guards of Indian Navy, how they reached Mumbai? Fourth, where did they change their muddy shoes and wet dresses? Fifth, how it became possible that they immediately hired a taxi and reached their targets, without taking some rest? Sixth, why the terrorists killed only four people at the Nariman house, sparing the other six guys present there?

Availing the pretext of the Mumbai catastrophe, New Delhi had suspended the process of ‘composite dialogue’ in wake of its highly provocative actions like mobilisation of troops. Islamabad had also taken defensive steps to meet any Indian prospective aggression or surgical strikes. But, India failed in implementing its aggressive plans, because Pakistan also possesses atomic weapons.

However, in the post-Mumbai terror attacks, Indian rulers had started blackmailing Islamabad that they would not resume the talks unless Islamabad takes actions against the culprits of Mumbai mayhem. New Delhi urged Islamabad to arrest the perpetrators of the Mumbai terror attacks. Rejecting Pakistan’s stand that its government or any official agency was not involved in the Mumbai attacks, New Delhi wanted to make Islamabad accept all other Indian demands since our rulers admitted that Ajmal Kasab was Pakistani national. In fact, Islamabad’s admission which had emboldened New Delhi was forced by the US. And, Ajmal Kasab was tortured by the Indian intelligence agencies so as to endorse Indian false story against Islamabad, while giving statement in an Indian court. Suppose, even if he was Pakistani, it did not matter because he was a non-state actor, as non-state actors like smugglers and the militants are found in many countries.

It is of particular attention that on July 19, 2013, the Indian former home ministry and ex-investigating officer Satish Verma disclosed that terror attacks in Mumbai in November 26, 2008 and assault on Indian Parliament in January 12, 2001 were carried out by the Indian government to strengthen anti-terrorism laws.

It has clearly proved that Indian secret agencies; particularly RAW arranged coordinated terror attacks in Mumbai and orchestrated that drama only to defame Pakistan in the world, but also to fulfil a number of other sinister aims.

As a matter of fact, a lack of seriousness on India’s part to settle all disputes, especially Kashmir issue has compelled New Delhi to follow a self-contradictory and confused strategy towards Islamabad.

Hence, New Delhi earnestly found various pretexts to cancel peace talks, while shifting the blame to Islamabad. For example, besides Mumbai attacks, in 2002, under the pretension of terrorist attack on the Indian parliament, India postponed the dialogue process.

In this connection, on July 27, 2015, three gunmen dressed in army uniforms killed at least seven people, including three civilians and four policemen in the Indian district of Gurdaspur, Punjab.

Without any investigation, Indian high officials and media started accusing Pakistan, its banned militant outfits and intelligence agencies for the Gurdaspur incident. Indian Police remarked that the attackers are from Indian-held Kashmir, and some said that they were Sikh separatists, while Indian Punjab police chief claimed that the three gunmen were Muslim, but as yet unidentified. Contradicting speculations, India’s Home Minister Rajnath Singh told parliament that the gunmen came from Pakistan.

Khalistan Movement Chief Manmohan Singh stated that the Gurdaspur incident is “a conspiracy of Indian secret agency RAW to defame Pakistan.”

Besides, prior to the US President Obama’s second visit to New Delhi, Indian intelligence agencies orchestrated a boat drama to defame Pakistan, allegedly reporting that a Pakistani fishing boat as a Pakistan-based outfit group Lashkar-e-Taiba was intercepted by Indian Coast Guards, off the coast of Porebandar, Gujarat. And Indian Coast Guard crew set the boat on fire and it exploded. But, its reality exposed Indian terrorism, because, some Indian high officials admitted that there was no such boat which came from Pakistan.

Similarly, India orchestrated the drama of militants’ attack at Indian Air Force Base in Pathankot on January 2, 2016. Indian media and top civil and military officials started claiming that the attackers had arrived from Pakistani Punjab’s Bahawalpur district, and had links with Jaish-e-Mohammad and ISI. But, despite Islamabad’s cooperation with New Delhi like formation of the Joint Investigation Team (JIT) consisting of professionals to investigate the Pathankot attack, crackdown against the militant group Jaish-i-Mohammad—lodging of a First Information Report (FIR) in relation to the incident, India failed in providing any proof of Pakistan’s involvement in the Pathankot episode.

Indian authorities did not cooperate with Pakistan’s Joint Investigation Team which visited India to probe into Pathankot attack. The JIT members visited Pathankot Airbase on March 29 where Indian National Investigation Agency officials briefed and showed them the route from where the attackers stormed the airbase. In fact, besides fulfilling other sinister designs against Pakistan, New Delhi staged that drama to postpone secretary-level talks with Pakistan, which were scheduled to be held in Islamabad on January 15, 2016.

Sources said that the lights along the 24-km perimeter wall of the Pathankot airbase found to be faulty on the eve of the attack. The Pakistani investigators were allowed to enter the military airbase from the narrow adjacent routes instead of main entrance and their duration of the visit was just 55 minutes, enough to take a mere walk through the airbase. The JIT could not collect evidence in this limited time. And the visiting team was only informed about the negligence of Boarder Security Force (BSF) and Indian forces. It was disclosed that at the time of the assault, the BSF was sleeping, even though they had been alerted of a possible attack 48 hours earlier.

India’s orchestrated drama of the Pathankot incident could also be judged from the fact that earlier, Indian Defence Minister Manohar Parrikar had stated in confusion that New Delhi would not allow access to the JIT into the base, though it was allowed on very limited scale to fulfill the formality. It can undermine the seriousness of bilateral commitments to find the truth.

Continuing false flag operations, on September, 2016, India also staged the drama of the terror attack in the Indian Occupied Kashmir (IOK) at a military base in Uri, close to the Line of Control (LoC) with Pakistan.

Like the previous terrorism-related events, without any investigation, Indian media, civil and military high officials started blaming LeT and ISI, saying that the militants who target the Uri base came from Pakistan’s side of Azad Kashmir. In this regard, a senior Home Ministry official and a spokesman of the Indian army allegedly said, “It is clearly a case of cross-border terror attack…the militants infiltrated across the Line of Control from Pakistan before attacking the base in Uri.”

The situation developed in the aftermath of the Uri base terror assault like creation of Indian war hysteria against Pakistan, mobilisation of troops near the LoC, exposure of the myth of Indian surgical strikes inside Azad Kashmir, differences between Indian Prime Minister Narendra Modi and Country’s Army Chief Gen. Dalbir Sing about the ‘fake video’ of this episode, criticism Modi government inside India, continuous violations at the LoC, targeting villages of Azad Kashmir etc., and diversion of attention from the new phase of uprising in the Indian held Kashmir where Indian security forces have martyred more than 600 innocent Kashmiris since July 8, 2016, who have been protesting against the martyrdom of the young Kashmir leader Burhan Wani by the Indian security forces in the Indian Occupied Kashmir (IOK) in wake of continued sieges and prolonged curfew have clearly proved that with the help of Indian intelligence agencies, especially RAW, India has itself arranged the Uri base assault not only to defame Pakistan abroad, but also to achieve a number of sinister designs.

Nevertheless, all these terror attacks were planned by Indian security agencies to distort image of Pakistan and its primary intelligence agency, ISI, linking it with the banned group Lashkar-e-Taiba. In these terms, coordinated terror assaults of November 26, 2008 in Mumbai were part of the same Indian scheme.

Sajjad Shaukat writes on international affairs and is author of the book: US vs Islamic Militants, Invisible Balance of Power: Dangerous Shift in International Relations

Email: sajjad_logic@yahoo.com

Attack on the Chinese Consulate: Main Target is Pak-China CPEC Project (JR83 SS01) By Sajjad Shaukat

Attack on the Chinese Consulate: Main Target is Pak-China CPEC Project (JR83 SS01)

                                                      By Sajjad Shaukat

Pakistan’s security forces successfully foiled an attack on the Chinese consulate in Karachi on November 23, this year.

In the exchange of firing, two policemen were martyred, including two civilians, as three gunmen tried to enter the consulate around 9:30am but were intercepted by security guards at a checkpoint.

Karachi Police Chief Dr Amir Shaikh said, “Three suspected suicide bombers were killed before they were able to enter the facility as forces successfully foiled the attack...They could not even get in the compound. They tried to get into the visa section…The men came to the consulate in a car which was loaded with explosives.”

The clearance operation was initially led by a female Police Officer Assistant Superintendent of Police Suhai Talpur. Her courage has been greatly appreciated by the top officials of Pakistan.

On the same day, Pakistan’s Foreign Minister Shah Mehmood Qureshi said, “All staff members of the Chinese consulate remained safe in the attack...It was a cowardly attempt by terrorists.”

The Director General of the Inter Services Publication Directorate (ISPR), Maj. Gen. Asif Ghafoor also confirmed by saying, “Terrorists attempted to enter Chinese consulate. Rangers and police have got control. Three terrorists killed. All Chinese are safe”. He also stated, “Chief of Army Staff (COAS) Gen Qamar Javed Bajwa expressed grief at the martyrdom of two policemen in the attempted attack on the Chinese consulate in Karachi’s Clifton area, hailing their sacrifice for the greater cause of protecting the citizens.”

While ordering an immediate inquiry regarding the assault on the Chinese consulate in Karachi, Prime Minister Imran Khan condemned the attack, terming it as a conspiracy against Pak-China economic and strategic relations. He stated, “The elements and motives behind this attack should be uncovered…the nation is proud of the prompt action of the Rangers and police…who were martyred foiling the attack.”

Information Minister Fawad Chaudhry condemned the assault on the Chinese consulate in Karachi and labeled it a “conspiracy”, targeting Pakistan-China socioeconomic and strategic ties.” He added, “Such incidents cannot hinder the friendship between the two neighbours.”

Almost all the leaders of the mainstream political and religious parties condemned the foiled assault on the Chinese consulate in Karachi and hailed the role of the security forces in this respect.

Besides, the Chinese Embassy in Pakistan, Chinese foreign ministry spokesman Geng Shuang stated on the same day of the incident, “China strongly condemned the attack on its consulate in Karachi all consular staff and their families were safe following the shooting…We highly appreciate the efforts of the Pakistani side…The Chinese embassy in Pakistan has extended condolences over the martyrdom of two Pakistani policemen and said any attempt to undermine China-Pakistan friendship is doomed to fail…the attack would not affect Beijing’s commitment to the China-Pakistan Economic Corridor (CPEC) which seeks to connect its western province Xinjiang with the Arabian Sea port of Gwadar, in Balochistan….China and Pakistan are all-weather strategic partners.”

It is notable that a separatist group of the Balochistan province, the Balochistan Liberation Army (BLA) claimed responsibility of the failed terror attempt on the Chinese consulate in Karachi through a tweet.  However, such claims of responsibility have no material value because all such anti-state elements always try to score numbers when an incident like this occurs.

Meanwhile, Pakistan’s media and reliable sources disclosed that mastermind of terrorist attack on the Chinese consulate in Karachi—Aslam alias Achu is a commander of BLA and is currently receiving medical treatment at Max Hospital in the Indian capital New Delhi.

Undoubtedly, it shows the connections of the Indian secret agency RAW in relation to the foiled attempt at the Chinese consulate of Karachi.

In other terror-related incident, on the same day, at least 35 people were killed and 50 wounded in a blast in Kalaya area of lower Orakzai district in Hangu.

It is of particular attention that armed forces of Pakistan have successfully broken the backbone of the foreign-backed terrorists by the successful military operations Zarb-e-Azb and Radd-ul-Fasaad which have also been extended to other parts of the country, including Balochistan. And Pakistan’s primarily intelligence agency, ISI has broken the network of these terrorist groups by capturing several militants, while thwarting a number of terror attempts. But, in the recent past and during the election-campaign of 2019, blasts in Balochistan and other regions of the country, including the latest ones in Hangu and especially at the Chinese consulate in Karachi show that the US-led India, Afghanistan and Israel have again started acts of sabotage especially to destabilize Pakistan and to damage the CPEC which is their main target— particularly of India and America.  

Notably, the assassination of religious clear Maulana Samiul Haq, known as the “Father of the Taliban” on November 2, this year in Islamabad was part of the same scheme to weaken Pakistan, also due to the fact that Pakistan is the only nuclear country in the Islamic World.

It is mentionable that during the successful four-day visit of Premier Khan to China, Beijing on November 2, 2018, reportedly agreed to provide USD 6 billion in aid to cash-strapped Pakistan to minimise its dependence on an IMF bailout package. A loan of USD 1.5 billion is also expected to be offered, along with an additional package of USD three billion for CPEC. The loan and the investments were reportedly part of the USD six billion package. According to the joint statement, released on November 4, 2018, the two sides also signed fifteen Agreements/MoUs on a range of bilateral issues.

Pakistan and China also agreed to trade in their local currencies in an effort to reduce dependence on the US dollar. Particularly, Pakistan will save more than 12 billion dollars annually by importing goods in its local currency.

It is noteworthy that it is first time in the history of Pakistan that on November 20, 2018, the government led by P.M Imran Khan refused to accept tough conditions laid down by the International Monetary Fund (IMF) for a financial bailout package. Besides, other tough conditions such as further increase in power tariffs, imposition of more taxes etc., especially, the condition of sharing details related to Chinese financial assistance was also rejected. In fact, IMF is controlled by America, which has always imposed tough conditions to release loans in order to further destabilize Pakistan by targeting the general masses.  

It is also of particular attention that India was openly opposing the CPEC and China’s One Belt, One Road (OBOR) or BRI; the US also joined New Delhi. In this context, on October 3, 2017, US Defence Secretary James Mattis told the Lawmakers, “The United States has reiterated its support for India’s opposition to China’s One Belt, One Road initiative…the China-Pakistan Economic Corridor (CPEC) a part of which traverses Pakistan-Kashmir.”

Islamabad strongly dismissed the statement from the American defence chief that the multibillion-dollar road and rail network “CPEC which is part of China’s One Belt, One Road initiative, passes through a disputed territory of Kashmir”, urging “the international community to focus on blatant human rights violations and heinous crimes committed by Indian occupation forces in the Indian Occupied Kashmir” (IOK), and reminded the US that Washington had also participated in an OBOR summit.

Earlier, a statement from the Chinese foreign ministry also dismissed Mattis’ statement, saying that the OBOR plan was backed by the United Nations and that CPEC was an economic cooperation initiative.

In this regard, repeated threats of the US President Donald Trump and top American officials to Islamabad and other moves like suspension of latter’s aid were part of the same scheme to thwart the CPEC.

The fact is that Indian lobbies which are well-penetrated in the US administration and Europe, research centers, think tanks and so-called human rights groups utilize the media tools in defaming Pakistan internationally. Especially, Indian RAW is availing the opportunity of the US-led organized propaganda campaign against Pakistan. Now, CPEC is special target of these hostile entities.

The reality is that when Gwadar seaport becomes fully operational, it would connect the landlocked Central Asian states with rest of the world. Being the commercial hub, the port is likely to increase volume of trade, bringing multiple economic and financial benefits to Pakistan like the Suez Canal which changed the destiny of Egypt when Israel returned it to the former. It will enable high-volume cargo vessels to move in the major oceans. Gwadar project which is backbone of the CPEC will uplift the impoverished people of Balochistan and Gilgit-Baltistan, including developments in other provinces by providing thousands of employment opportunities, particularly to the less developed areas by redressing their grievances. The resulting prosperity in Balochistan and Gilgit-Baltistan would damp the separatist sentiments of the people, which the hostile elements, supported by the US, India and Israeli do not want. Therefore, these entities and their media describe the CPEC in negative terms.

As a matter of fact, since the occupation of Afghanistan by the US-led NATO forces, the country has become center of CIA, RAW and Israeli Mossad which are in connivance to obtain the covert designs of the their countries and some Western countries against Russia, China, Pakistan and Iran. Under the cover of fighting terrorism, these foreign agencies which are also in collaboration with the Afghan intelligence agency National Directorate of Security (NDS), support the militants of ISIS and Afghanistan-based Tehreek-e-Taliban Pakistan (TTP), including their linked outfits which have been conducting terror-assaults in Afghanistan and Pakistan as part of the secret strategy of the US-led countries. Besides, these terrorist outfits are weakening Tibetan regions of China and Iranian Sistan-Baluchistan through subversive activities.

Notably, on March 24, 2016, Pakistan’s security forces disclosed that they arrested the serving agent of RAW in Balochistan. During investigation and in a video, shown on Pakistan’s TV channels, RAW agent Kulbushan Yadav confessed that “he was the agent of RAW” and “during his stay, he contacted various Baloch separatist leaders and insurgents, including Dr Allah Nazar Baloch, to execute the task to damage the China-Pakistan Economic Corridor” project. Yadav admitted that he spied for India and was “assigned with the task to create unrest in Karachi and Balolchitan.”

Nevertheless, one has to evoke as to who could be the prime beneficiary of such an action against the Chinese in Pakistan. These are those elements who do not want to see Pakistan– China cooperation which has put the country on the road to progress.

In this connection, P.M. Imran Khan’s very successful visit to China and the advancements in the CPEC are of great distress and discomfort for those who do not want to see such initiatives, taking place between the two countries. In simple words this attack at the Chinese consulate was an attack on the CPEC and Pak-China friendship.

It is worth-mentioning that Karachi, the financial capital of Pakistan, reportedly has number of sleeping cells being operated by RAW, NDS and other hostile intelligence agencies. It is evident that the terrorist were part of these sleeping cells. Pakistan’s investigation units and intelligence agencies have already pointed out that such cells are being operated by RAW, NDS and other hostile agencies in Karachi.

In the recent years, these anti-Pakistan secret agencies have been conducting frequent attacks on the Pakistani forces and Chinese manpower working in Pakistan as well as on projects being completed under CPEC is going to change the fate of the people of this region especially Pakistan.

China and the US are pitched against each other on trade war. Asia and especially this region, being the economic future of the world, have gained attention of the world powers. This is the reason, why America has been spending billions of dollars just to stay in Afghanistan, despite the tremendous reverses being faced by the Americans. This interest goes till the extent where the US is now ready to even negotiate with their biggest adversary, the Talibans, just to maintain their presence in Afghanistan under the nose of China and Pakistan.

India being the collation partner of the US has opened 22 consulates in Afghanistan to counter the economic prosperity of Pakistan and CPEC and for working hands in glove with the NDS to generate unrest in Pakistan through sabotage and terrorism.

It means that being the future economic hub, this region; particularly Pakistan could face more terrorism-related events in the coming days. So, it is in their collective interests that both Islamabad and Beijing should remain focused on their economic goals and remain steadfast to meet similar future challenges.  

Again, it is pointed out that initial operation at the Chinese consulate was led by a female Police Officer ASP Suhai Talpur, which proves that Pakistani girls and women folks are on the forefront to defeat evil designs of CIA-RAW-NDS nexus.

We can conclude that the CPEC is the main target of the foiled attack on the Chinese consulate in Karachi.

Note: I have updated my similar article.

Sajjad Shaukat writes on international affairs and is author of the book: US vs Islamic Militants, Invisible Balance of Power: Dangerous Shift in International Relations

Email: sajjad_logic@yahoo.com