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  #11  
Old Monday, November 29, 2010
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India’s role in Doha negotiations

The critical decision piece needing attention is the modalities on agriculture and non-agriculture market access (NAMA), involving reduction of

tariffs on agriculture products

By Pradeep S Mehta

The jury is still out whether the Doha Round of the WTO is a development round or not, observed the Brazilian and US ambassadors at a recent workshop on analysis of the Doha round of trade negotiations held at the WTO, Geneva on 2 November. At the concluding session moderated by the Director General, Pascal Lamy, ambassadors from China, India and EU strongly asserted that this is a development round. It was a candid assessment of the geopolitics of the trade and reflected the grim scenario that countries continue to speak to each other with each looking in different directions.

But the workshop was not only about geopolitics but also numbers. Many analysts opined that up to US$200bn could be added to global welfare by the current package of offers. More importantly, they contended that the world could see a 10 percent contraction in trade if Doha fails.

Numbers had little effect on the discussions by the key Ambassadors at the end of the workshop; what matters are the level of ambition and the balance of costs and benefits of the final deal. Jayant Dasgupta, the Indian Ambassador, succinctly summarised it by reminding the meeting of the old metaphor that it is time to enter a period of give and take negotiations and that it is no longer feasible to raise ambitions. I was speaking at the workshop on rules and environment, not too easy but certainly no hurdles in sewing up the Doha Round.

India has been playing a leading role in the Doha negotiations. The Indian trade minister, Anand Sharma, was recently at Geneva to test the waters and reaffirm India’s willingness to negotiate. India has not only been a part of the complex variable geometry of delegations meeting to thrash out differences and pull the negotiations out of its decade-old quagmire, it has taken a lead to pull them along when required.

India has contributed to the emergence of credible draft Chairs’ texts on agriculture and non-agriculture market access negotiations that lead to the last two most hope-generating efforts in July and December 2008. The efforts failed, though Lamy gives it 80 percent marks. In the fall of 2009, when appetite for a trade liberalisation deal was minimal in the wake of the financial crisis, India hosted a mini-ministerial where Lamy installed a roadmap for intense negotiations with capital based senior negotiators. That effort too fizzled out by the next spring, and focus of Geneva-based delegations shifted to more procedural and practical matters like the templates for making commitments, collection of data to determine base years, and so on.

Political leaders continued to meet, in the meanwhile, in various configurations and on the margins of various other meeting opportunities, with November slated to see the APEC Economic Leaders’ Meeting in Yokohama followed by the G-20 meeting in Seoul. Another spring is coming, yet no deal appears on the horizon.

In this pessimistic scenario, what can India do? As an engaged trading partner, it can reassess its offers for others to emulate. The critical decision piece needing attention is the "modalities" on agriculture and non-agriculture market access (NAMA): involving reduction of tariffs on agriculture products, elimination of export subsidies and reduction of domestic subsidies, and reduction of tariff and non-tariff barriers on industrial products.

In NAMA, the discussions focus on three issues —"coefficients" for tariff reduction, the anti-concentration clause and "sectorals". On the first two, while India may not accept blanket restriction on flexibility built into the December 2008 texts, it is not likely to block a deal. The issue of sectorals, where members may agree to undertake deeper tariff reduction commitments in selected sectors, is more sensitive. India has not shown any aversion to engage on the issue in its effort to get a deal through.

During the last couple of rounds of negotiations on the subject, India has come out with more substantive economic arguments on the difficulties in sectors of interest to others, including through accompanying large business delegations from sectors like the automobiles, and submitting joint proposals in sectors like chemicals. These contributions should enable its trading partners to make a balanced assessment of how far to push India.

India has also been at the forefront of developing a mechanism to address non-tariff barriers, a joint proposal which was discussed at length in the last round of negotiations in October.

Agriculture negotiations are more important for India, with two-third of its population dependent on subsistence farming. Although a number of issues appear to be unsettled in these negotiations - cuts in overall trade distorting support (OTDS), percentage of products to be declared as sensitive products and the connected issue of tariff rate quota expansion, tariff capping, special products — the critical issue needing innovative handling is the proposed Special Safeguards Mechanism (SSM) for developing countries. The proposed SSM would enable developing countries like India to take remedial action through higher tariffs in case of import surges or import induced price declines.

The main differences are between India and the US about the extent of increase in import volume (i.e. the volume trigger) required to cross the Uruguay Round (UR) bound levels of tariffs and the extent to which the UR bound tariffs could be exceeded. Rather than try and reach a compromise the waters are being muddied by other new proposed instruments, which would just bore the reader. However, my feeling is that India will agree on a new trigger benchmark, and the US should show flexibility on these new issues.

The state of negotiations is unclear if not comatose at present. The technical work in the various committees appears to have moved forward with work on scheduling having progressed in parallel to the negotiations of commitments. Given the broad support to calibrated liberalisation accompanied by regulatory and institutional flanking policies amongst the Indian political establishment, India will not be the deal breaker. It will continue to sit on the high table as a deal maker rather than a deal breaker so long as its farm sector is protected, no commitment of a zero-for-zero industrial goods sector is insisted upon, commercially meaningful liberalisation is secured in services and a commitment to accommodate the UN Convention on Biodiversity in TRIPs is agreed to.

The writer is Secrtary General Cuts International

Atul Kaushik, Secretary General, CUTS International, Geneva contributed to this article
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  #12  
Old Monday, November 29, 2010
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It’s a long, bumpy road for Nato

It has been an arduous task for Nato to agree members to contribute troops for a cause the outcome of which remains mired in uncertainty

By Ather Naqvi
A tweet by Paolo Coelho reported in a newspaper the other day aptly sums up the recently-concluded Nato summit in Lisbon. Referring to Nato’s role in Afghanistan it says, "We can lose the war, but we can’t lose face". Precisely that seemed to be the sentiment among some of the 28 members of Nato, notable among them the US, that resolved, among other things, to bring relative peace to the troubled lands of Afghanistan by 2014, a deadline that already stands challenged by their formidable foe — the Taliban.

Lisbon Summit Declaration issued at the end of the summit charts out Nato’s "vision" for the next decade, Strategic Concept as they called it, aimed at defending its members "against full range of threats", including plans of developing a missile defence capability to counter possible attack of ballistic missiles.

One of the immediate and most challenging targets for Nato is Afghanistan where it plans to entrust Afghan forces with the task of dealing with the Taliban by year 2014. Given the level and speed of training of the Afghan forces that seems unlikely at the moment.

But if that happens, or anything near that, a possible pack up from southern Afghanistan is a likely outcome, especially for British troops. Here lies the crux. It has been an arduous task for Nato to agree members to contribute troops for a cause the outcome of which remains mired in uncertainty.

Britain has been eager to call it a day in southern parts of Afghanistan where most of its troops have been pitched against the Taliban in some of the world’s fiercest battles in recent times. Understandably, the battles in Afghanistan have cost Britain 345 troops since 2001, of which about one hundred have been killed this year alone. Still, the biggest sufferer in this respect is the US with more than 1200 death on the Afghan soil.

And it is not just Britain that wants to pull itself out of the Afghanistan quagmire, Germany, which has more than 4,900 troops in Afghanistan, has also joined the chorus of reducing its troops in 2012.

The summit follows months of preparations and discussion among a group of experts headed by former US Secretary of State Madeleine Albright that prepared recommendations for the new strategy in May this year. Despite all the reason and foresight that must have gone into preparing the new strategic vision, there is no guarantee that things would go according to plan.

While it looks unlikely at the moment that Nato would meet its deadline, US Vice President Joe Biden is hopeful about the future of ending US military involvement in Afghanistan, saying the withdrawal of US troops may begin earlier than 2014, "Look, beginning in the summer of 2011, we’re going to begin to transition."

But there is not much substance in what Biden is saying keeping in view US’s earlier stated commitments on the level of US engagement and withdrawal of troops from Afghanistan. The Obama administration has gone back and forth on the issue of withdrawal of troops from Afghanistan —from the surge of some 30,000 US troops in Afghanistan early last year to the now intimation of starting to leave Afghanistan from July 2011.

Afghanistan President Hamid Karzai seems to still pin some hope in Nato’s presence after the 2014 deadline. After returning home from NATO summit, Karzai told journalists at a news conference that "NATO as a partner would keep its presence beyond 2014 in Afghanistan but it would be limited".

On another level, much would depend on the contours of relations between Nato and Pakistan. If Nato continues to flout the international rules of military engagement as it did in the shape of violating Pakistan airspace last Tuesday for the second time, things would not be working for Nato.

Pakistan, as a non-Nato ally, has taken the commitments expressed by Nato members with a pinch of salt. It has cautioned against a withdrawal of Nato troops from Afghanistan without taking into account the "ground realities", meaning thereby that Afghan troops are adequately trained to take the Taliban head on.

Pakistan’s concern is understandable. It finds itself in the thick of a military operation against the Taliban in South Waziristan and is constantly under pressure from the US to expand the military offence to North Waziristan as well. If Nato troops, currently about 1,30,000, start leaving Afghanistan leaving behind a poorly trained Afghan army, it may not only destabilize the Karzai government but also cause the insurgency to spread its tentacles inside Pakistan’s tribal areas.

Perhaps it was this complexity of the situation that the Pentagon had to issue a statement acknowledging that the three neighbours of Afghanistan — Pakistan, Iran, and India — have an important role for bringing in peace and stability for Afghanistan.

Despite all the unanswered questions and tough time ahead the attendants of the summit dubbed the gathering as a "historic breakthrough". If Germany’s Chancellor Angela Merkel is to be believed, "This summit will go down in history. The strategic approach is clear, and it shows we are all working on the same footing." Overly optimistic? Let’s see.
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  #13  
Old Monday, November 29, 2010
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A lot remains to be done

It is time the government establishes district-level bodies to implement laws and policies related to rehabilitation

By Irfan Mufti
The government and civil society are stills struggling with the rehabilitation and reconstruction work after the floods. The gigantic tasks need a clear vision, concerted efforts, long-term planning and uninterrupted implementation and finances.

Without compromising quality and consistency the objectives of rebuilding communities and reconstructing need coordinated actions from all key stakeholders. The preliminary assessment by institutions like The World Bank (WB) and Asian Development Bank (ADB) indicate the urgency of the situation and lack of actions so far.

These assessment reports talk of volumes about the damages and identify the magnitude of efforts required to rebuild these communities. Funding still remains a challenge for the government, including a clear and focused plan for reconstruction and rebuilding.

Civil society groups and communities are already contemplating on coordinated planning for reconstruction, recovery and rehabilitation tasks. There is, however, a realisation that tasks of reconstruction and rebuilding rest with the government that seems unable to come up with coordinated plan or clear directions. The state of the economy also does not support government intentions for rebuilding.

The two-day Pakistan Development Forum held in Islamabad in November also failed to reach to any concrete conclusion or expected pledges of financial support. The meeting was a rare chance for government, civil society and donors to think outside the box for solutions to tackle some fundamental issues thrown up by the floods – one of the most devastating natural disasters this country has ever seen.

The Pakistan Development Forum has remained on the fringes of these problems, rather than boldly tackle them head-on. There were chances to grapple with wide-ranging reforms of existing structural problems about agriculture and the economy. One of the most important missed opportunities was a chance to address land reform, which has the potential to reduce inequality, put earning power into the hands of many landless women and end bonded-labour.

Although the meeting wasn’t billed as a pledging conference, still financial commitments were made to assist with Pakistan’s recovery. These pledges need to be grants that deliver new and substantial humanitarian aid quickly and effectively to the people on the ground that they are in desperate need of assistance.

With winter looming and almost seven million people without shelter, donors must not forget that many parts of Pakistan are still facing a serious emergency even though some areas are moving towards recovery.

There is also a welcoming emphasis on tax reform, especially given that only two per cent of Pakistanis pay tax. However, this should be a more equitable reform that does not put the burden onto the poorest, those who are least able to pay. Any price increase on basic necessities could put post-flood recovery out of reach for the very poor.

The governments’ call for debt cancellation from donors is also a right and fair demand. This year Pakistan will spend $2.9 billion on servicing foreign debts — $1 billion more than is being asked for by the UN appeal. The international community, civil society groups and the Government of Pakistan must ensure foreign debt cancellation is spent transparently on the post-flood response, targeting those hit hardest by the floods.

Civil society representatives at the forum, experts and donors recommended that it was an opportune time to introduce reforms that would have far reaching results, reforms that can enable communities to embark on long-term path of secure and sustainable solutions of problems. These problems are perpetual in nature and make the country vulnerable to disasters, economic shocks, political instability and social upheavals.

Civil society representatives attending the Development Forum also made clear and focused recommendations. These voices are not yet heard but the recommendations put forward are of far-reaching in nature and cover views of neglected and voiceless sections facing hardships in post flood situation. Most of the stakeholders felt that the relief efforts were inadequate and reflected a lack of proper management and preparedness and also show lack of clarity regarding a comprehensive national rehabilitation plan for flood affectees.

Some important and significant citizens charters were also presented. The views covered in charters are of women, non-Muslims, poor peasants and workers often sidelined at policy forums. These voices demand rehabilitation efforts shall follow the vision of a new Pakistan based on the framework of equality, rights, restoration of balance of power. The state shall strike a new social contract with the people that should balance peoples’ immediate development needs and human security entitlements. Reverting to the same old patterns of citizenship, infrastructures, economies and protection will hamper our ability to move forward as a nation.

Other important demands for resettlement and rebuilding exercise shall incorporate the will of the people regarding their choice of relocation, livelihood, and community set-ups. Donor-imposed products should not be imposed on people for resettlement and a focus on indigenous solutions for rebuilding shall be pursued.

Similar voices of reforms came from rural women assembly organized by Potohar Organization for Development Advocacy (PODA), Women Rights Association (WRA) demanding women to be on the centre stage in decision making processes of disaster management.

These forums demanded women with practical experience of disaster management should be engaged through various mechanisms ensuring that women are consulted in all processes of rehabilitation and reconstruction. These rural women made a right plea of allotment of 12 acres of land for women farmers affected by the floods. Special attention must be given to support women in resuming agricultural activities, and, providing training in cooperative farming, alternative cropping, kitchen gardening and preservation of vegetables and dairy products.

Provision of universal social protection, according to Article 38 of the Constitution; self registration of those affected by the flood for social protection; extension of ‘unemployment benefits’, ‘protection against disasters’, ‘old age benefits’, ‘disability allowance were other key points. Suggestions for decentralization of relief operations; complete autonomy for provincial and district-level disaster management machinery; and channeling resources for relief and rehabilitation through the provinces are also important.

On the financing for rebuilding and reconstruction the experts are suggesting massive budget reprioritization to address resource constraints to meet rehabilitation needs. This can include reduction in non-development expenditures of public sector and unnecessary allocation of funds for defense expenditure. It is also recommended that resource mobilization through directly taxing the rich by extending the tax net and also by seriously revisiting government land and buildings including GORs and Cantonment lands for those that are landless and need secured livelihood.

It is also important that assistance from foreign donors and international financial institutions must be in grants or donations and not in loans because in the case of the latter the burden of economic hardships ultimately affects women the most. In consideration of the unprecedented flood crisis that has affected most parts of Pakistan and has severely affected agriculture and economy, the foreign governments and international financial institutions should also write-off their previous loans to Pakistan.

Monitoring of engagement between all humanitarian actors including the government, UN, INGOs, and national and local NGOs to promote empowered partnership. The current unequal relationship is reflected in the issues of accountability, transparency, and resource-sharing that undermines the capacity of national assistance organizations.

Floods have also exposed serious lack of capacity of line departments and disaster management authorities. It is a right time that government shall establish strong district-level structures to implement laws and policies related to environment and disasters, build resource capacity of line agencies, draw new maintenance and design disaster resilient structures in the rural areas to replace the redundant post ’70s structures.

Revision in the educational system is also urgently needed enabling awareness, comprehension, capacity of citizens to deal with challenges, alternatives for livelihoods, promote social cohesion and responsibility, and discourage violence.

Considering the substantial economic and social challenges that Pakistan faces in the current times, it is important that government must take concrete steps to improve its economic recovery. Foundations must be laid to ensure increased reliance on mobilization of domestic resources, increased exports, and charging the economic cost to those that utilizes services deliveries provided by the Government. Going back to business as usual will not only increase vulnerability in future but will also weaken our capacity and strength to grow and flourish as a nation.

The writer is Deputy Chief of South Asia Partnership Pakistan and Global Campaigner

irfanmufti@gmail.com
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Old Monday, November 29, 2010
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A case for debt cancellation

Cosmetic measures like brief rescheduling are simply not workable

By Abdul Khaliq Shah
Rich countries, creditors and lending institutions got together for the third time in as many months to discuss flood-ravaged Pakistan. As Islamabad hosted the Pakistan Development Forum (PDF) from 14/15 November, IFIs seemed determined to build up further pressure on Pakistan not to deviate from economic reforms.

The question that came under discussion was what the debt-ridden and flood-hit Pakistan could expect from the meeting. The government seems confused on the question of foreign debt. It is not ready to invoke the international protocols and precedents which are quite favourable to plead its case with creditors. Although government wants civil society to raise the question of debt cancellation at national and international forums it is hesitant to plead the case of foreign debt with the required level of commitment.

It is good that for first time a formal step at the state level was taken when the senate unanimously passed a resolution on November 3, 2010 urging the donor countries and IFIs to write off Pakistan’s debt. However, the very language of the draft resolution was apologetic, seeking forgiveness of the loans on charitable basis instead of demanding cancellation of debt as the right of Pakistan. This is an indicator that the government cannot take the risk of offending the IFIs. If the government is serious, there should be no problem to table a resolution in the National Assembly as well as in provincial assemblies for a wider discussion.

Presenting and passing resolutions is definitely not enough but at least that would be a first step in the right direction. Government will have to take a bold position on the question of foreign debt. The civil society has been demanding international donors and IFIs since long to cancel Pakistan’s debt. Now it is up to the government to utilize the ready support of the civil society to challenge the debt domination. The government did not raise the issue of debt at Friends of Democratic Pakistan (FoDP) meeting in Brussels earlier.

The need of the hour is Pakistan pleads its genuine case for debt cancellation with the donor community. While sharing reprioritisation of its development strategy with lenders; Pakistan should clearly tell the creditors and lending institutions to fulfill their global humanitarian responsibility by canceling Pakistan’s debt. Rescheduling or brief moratorium does not go far enough as it will not help mitigate Pakistan’s terrible economic woes. There should be a clear demand that the IMF-led structural adjustment programme and economic reforms should be suspended forthwith and any new funding should only be in the form of grants instead of new loans.

At this juncture, Pakistan should also demand multilateral and bilateral donors that Official Development Assistance (ODA) be transformed into grants in reparation in the light of the commitment made by the industrialized countries at the 1992 Rio conference. By all means, Pakistan has a solid case to seek major debt relief on technical, economic and moral grounds.

We are passing through hard times, our 20 million populations is affected. The first and foremost duty of the government is to address urgent needs of the people in need. We cannot afford to starve our people just to keep repayments to creditors. It is pertinent to mention that Pakistan spent a whopping $4.48 billion during the last financial year on its debt repayments and its budgeted debt repayment servicing for FY 2010-11 is more than double the funds governments from across the globe have pledged in grants for helping the flood-hit communities.

It is not something unusual that Pakistan would be seeking debt relief on genuine grounds. Haiti is a recent example. The country was offered relief after the 2010 earthquake when the IMF cancelled $366 million debt owed by Haiti. There are a number of examples when international loans were either repudiated or cancelled under extraordinary circumstances.

International pledges vis-à-vis the degree of destruction is just peanuts. The loss runs into billions of dollars. The government puts it as $43 billion. It will take years to rebuild Pakistan in the wake of lukewarm international response the woes of the flood hit communities are not going to be lessen. Under these circumstances, Pakistan cannot afford to continue debt servicing and needs all its available resources at hand to divert for relief and rehabilitation of the flood hit.

It is shameful that at this juncture of extraordinary humanitarian crisis, the international creditors and IFIs are not ready to offer Pakistan any relief. Rather, they are continuously pressing for repayments on debts. Instead of giving relief they are offering more loans. But the new lending will push the country’s debts to a new high and benefit only the lenders while ‘mortgaging’ the future of Pakistani generations.

Pakistan is already under a huge burden of $ 55 billion external debt, which includes Paris Club (bilateral debt) component of about $16 billion and multilateral component of slightly less than $32 billion (including the existing IMF loan of $8.077 billion). It has gone up by almost 50 percent from $36.40 billion in just four years. This debt burden will amount up to $ 73 billion in 2014, when the loans rescheduled during Musharraf regime, after 9/11, will be back in action. The debt stock, therefore, will continue to rise in the coming years at a faster pace than in the past.

Cosmetic measures like brief rescheduling are simply not workable. A major debt cancellation is only durable remedy. The situation not only calls for immediate announcement of significant debt relief by IFIs and donor countries but also demands of Pakistan government of taking extra-ordinary austerity steps.

We understand that demand of foreign debt cancellation lacks legitimacy unless we put our own house in order. For that the government will have to explore ways and means of immediate resource generation/reallocation, like the one-time flood tax, reduction in military budget, long-term reforms like agriculture reforms and direct taxation system.

Steps like immediate relief to the working classes by providing social security, progressive taxation system to bring the rich and affluent into tax net and fool proof mechanisms to ensure accountability and transparency of utilization of flood funds are perquisite for the government to prove its commitment with the cause it has been claiming. These kinds of much-needed measures would really helpful to make the case strong for Pakistan’s foreign debt cancellation.

The author is Focal person, Campaign for Abolition of Third World Debt (CADTM) Pakistan
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Debt for development

Have we lost the opportunity to get a loan write-off?

By Tahir Ali
Pakistan seems to have wasted another opportunity to get its huge and foreign debt written off in the aftermath of devastating flash floods. The destruction caused by the war on terror and the 2005 earthquake had also provided reason to do just that but the then Musharraf-led regime was not able to get a loan write-off.

Rebuilding the country requires huge funds. Foreign donors say about $10billion are needed for reconstruction of the country but Pakistani authorities speak of over $40 billions for the purpose. If funds desperately needed for reconstruction and poverty alleviation are used for debt repayments, the already precarious poverty situation in the country could become even worse.

Though the UN has made an appeal for funding the reconstruction process, promises of loans are bigger than pledges for grants. While there is little money available locally wit no hope for an increase in revenue in the near future, donor agencies are also giving little in cash, the call for a total and unconditional debt cancellation is the only way out for Pakistan to be able to reconstruct the devastated region.

Debt write-off will provide Pakistan the much needed fiscal space. International aid agencies Oxfam, ONE International, professionals, political parties, left wing activists and foreign dignitaries, therefore, have been calling for cancellation of all of Pakistan’s external loans by international finance institutions (IFIs) and lending countries.

On November 14, addressing the Pakistan Development Forum, interior minister Rehman Malik asked the international community to waive $50 billion loans of Pakistan assuring that the waived foreign debt will be utilised in the fight against terrorism.

He said Pakistan had sustained losses of $140 billion in its war against terror and the world should realise that this war was being fought to protect it from the ravages of terrorism and for global peace. Before him, Oxfam and ONE international urged Pakistan’s $56 billion debt be dropped for the destruction caused by floods and the massive costs of relief and reconstruction.

In its petition to International Monetary Fund’s managing director, ONE International said, "Please help freeze Pakistan’s debt to ensure the country’s poorest people are able to recover from the devastating floods."

The government has restricted its internal borrowings to 10 percent of the previous year’s revenue collection and provincial borrowings at equivalent of six weeks’ expenditure of the previous year. But nothing of the sort has been done on the front of foreign debts.

France received more than 15 times, Japan more than five times, South Korea four times, and China three times money in debt payments from Pakistan this year as compared to their respective flood donations, Oxfam had calculated before the recent PDF meeting. Oxfam’s head of humanitarian campaigns Consuelo Lopez-Zuriaga had dubbed it madness and absurdity and urged that Pakistan’s debts should be written off so that reconstruction could be started in full swing.

Instead, addressing the PDF on November 15, federal finance minister Dr Abdul Hafeez Shaikh himself rubbished the idea and said that no wise person could demand debt write-off. He disowned the call for writing off over $58 billion Pakistan’s debt made by Rehman Malik, saying that asking for debt write-off was never an option before the government.

"Pakistan doesn’t want to become an international "pariah" by asking for debt write off. It is a grave issue with great consequences. This could negatively affect Pakistan’s sovereign credit rating and make it difficult for the country to raise money from the capital market (in future)," Dr Shaikh was quoted as saying.

He argued that most of the foreign debts were obtained from multilateral agencies like IMF, WB and ADB and Pakistan had made commitments to these institutions while taking the loans and being a sovereign nation Pakistan should fulfil its commitments.

Still, there are several laws, resolutions and international precedents that favour demands for a debt write-off. Natural calamities-like the one hitting Pakistan have given birth to the factor of "state of necessity". Article 25 of the International Law Commission stipulates that in case of "actual threat or a prospective peril to a state’s essential interests, the state is excused for not performing an international obligation."

A number of democratically elected governments — Argentine, Burkina Faso, Peru, Mexico, Paraguay, and Ecuador for example — have had refused debt payments on the basis of this rule. Pakistan can also decline to pay back its loans under this principle. According to a 1980 resolution by UN commission on international law, a state cannot be expected to close its schools, hospitals and universities, abandon public services to point of chaos, simply to have money to repay its foreign debts.

The IMF had cancelled all debt (US $ 268 million) of Haiti after the earthquake hit it earlier this year. The cancellation is given through the newly-established Post-Catastrophe Debt Relief Trust Fund, set up for this purpose. Pakistan hit by disaster can also resort to it.

Beginning in 1996, developed countries, under the Heavily Indebted Poor Country Initiative and the Multilateral Debt Relief Initiative, cancelled debt of $110 billion, $93 billion of which was in African countries. The countries agreed to channel their debt savings to poverty reduction. As a result, poverty reducing spending by HIPC-countries increased by the same amount by which their debt-service decreased. Success can be replicated in other countries like Pakistan where expenditure on health and education combined is less than two percent of the GDP.

Another argument that can be put forward is that all the foreign debts incurred by various regimes did not benefit the people of Pakistan. Argentine’ economy was badly hit by economic crisis after 2001. So its president announced the biggest unilateral suspension of foreign debt of more than $80b.

Pakistan’s current debt-to-GDP ratio is around 62 percent, exceeding the 60 percent limit set under the Fiscal Responsibility and Debt Limitation Act. Pakistan is fast approaching to the debt-to-GDP ratio of 80 percent, which according to WB is default stage. Pakistan’s external debt has doubled in the past four years alone and the government is currently spending more than four times as much per person on servicing external debt than on healthcare.

Latest loans from IMF ($7bn) WB ($1bn) and ADB ($2bn) will further increase Pakistan’s present foreign debt of $56bn. Its external debt will go up to $73bn in 2015-16, as debts that were rescheduled after 9/11 in return for Pakistan’s support in the war on terror are effective again. The ratio of debt-servicing will also jump up as a result. This may lead an already debt-trapped Pakistan to a worst economic crisis. It is currently paying on average over $3bn on debt-servicing per annum. It means payment of Rs710 million a day and Rs30mn every hour to lenders.

Pakistan’ inability to increase its direct taxes and improve upon its balance of trade and save money by adopting austerity measures and curtailing the burgeoning current expenditure has left it with no choice but to seek costlier foreign debts or over burden the existing tax-payers. The government has virtually eliminated subsidies that were offered on wheat flour, sugar and edible ghee, power and gas and other services and commodities inflicting heavy burdens on the household budgets countrywide.

The debtor country has also to hire costly consultants and import costlier machinery for the projects and other materials from the lender states, which reduces the net loans. It is said that almost 85 per cent of the US aid goes back to the US. While our governments are also to blame for the ever-increasing foreign debt, the IFIs and lender countries are also equally responsible for the catastrophic situation.

A debt audit commission should be established to make an inquiry into all foreign loans and their use. The government should restart a national self reliance scheme for self-sufficiency and getting rid of the debt burden. Once this debt cancellation or postponement is achieved, the money saved thereby should be used for reconstruction and poverty reduction.

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Free trade, anyone?

Provisions in the US’s FTAs rob countries of their sovereign right to give preference to local firms

By Zubair Faisal Abbasi

In Pakistan, there is no dearth of people who believe that integration in global economy through removal of protective tariffs and dismantling of regulatory regimes, meaning free trade and free markets, can create a turnaround in economy. They argue that having integrated with bigger economies such as US and EU through Free Trade Agreements (FTAs) will do us a number of favours. They say, firstly, it will increase foreign direct investment (FDI), secondly, it will ward off fears of isolation through trade diplomacy and, thirdly, it will give a push to exports from agriculture and industrial outputs.

Such perceptions have been promoted by international development policy experts through donors from outside as well as ambitious national policy makers who seek attractive jobs with international financial institutions. However, there is a need to look into the international experience before jumping onto conclusions and start making efforts to sign an FTA with any country.

There is a need to go for a comprehensive evaluation of FTAs which Pakistan has signed with China, Sri Lanka, Malaysia and the ones it is trying to negotiate with other countries and regions such as the US and EU. The figures shown on balance of payment accounts give us a number of reasons to dig deep into the realities of international trade and see how Pakistan can actually use trade and industrial policy instruments to move up the ladder of value chains and global production networks.

Research studies around bilateral and regional trade agreements, specially the ones undertaken by the Third World Network show that there is no conclusive evidence that FTAs cause an increase in foreign direct investment, especially investment for new projects called green field FDI. The dynamics of FDI are much complex, which range from geo-strategic reasons to the availability of locational and cost-reduction advantages. In the case of Pakistan, there seems to be an interesting relationship between change in geostrategic situations and increase in flow of funds alongside regime changes from civil to military.

Most of the FTAs show that agreements carry WTO-plus provisions such as Singapore Issues (i.e., government procurement, investment, and competition) which were dropped from the WTO agenda during the Doha Round. In fact, countries seeking FTA are subjected to full reciprocity and national treatment (no discrimination between local and foreign firm).

One can imagine how a developing country such as Pakistan can compete with firms from the US without getting out of business. In addition, the state is made unable to regulate the investment patterns of foreign firms making much of investment a footloose enterprise. The provisions in the US-FTAs also rob countries of their sovereign right to give preference to local firms which employ local people under government procurement. This has serious implications of countries such as Pakistan which need to generate growth stimulus by government procurement in backward regions such as in Balochistan and Southern Punjab.

A drastic feature of FTAs relate to dispute settlement in which foreign firms can take the state to dispute resolution in international courts of justice sending ‘chill effects’ in the government of less-developed countries.

On exports, there is no conclusive evidence that exports actually increase from less-developed economies to the more-developed ones. There are many reasons for this tendency. Primarily, agricultural commodities are heavily subsidised in the rich regions of EU and the US. Negotiations under FTAs, on removal of such subsidies from agriculture are not possible owing to political factors in big economies. Ultimately, most of the products from less-developed countries cannot compete for increased market access owing to price differentials.

As a result of this, subsidised products from the US and EU enter the markets of less-developed countries which causes decline in prices (consumer welfare?) and people in less-developed countries go out of business. For example, after NAFTA, about 2 million rural jobs in Mexico have gone while serious import surge (in some cases 500 percent) has been witnessed.

After having seen the international experience, it is important that parliamentary oversight is increased in Pakistan. The Standing Committees on trade and commerce, both in the lower and upper houses of the parliament, should pay serious heed to the vision and ideology which officials in ministries are following. Pakistan People’s Party and coalition partners should not fall a prey to the jargon of those neo-liberals who are entrenched in their ranks. They should make concerted efforts to safeguard interests of the people working in farms, industries, and services sector of Pakistan.

The writer is Executive Director of Institute for Development Initiatives, Islamabad www.idi.org.pk
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Lacking disaster

management skills


Will government departments be able to adequately respond to climate change in future?

By Shakeel Ahmed

Floods have caused a devastating impact on national economic and social fabric of Pakistan. Government of Pakistan, United Nations and its agencies, INGOs, National NGOs, World Bank, Asian Development Bank and others are busy in calculating and estimating the loss — economic, social and environmental.

Now the government and its partners are planning to move ahead from rescue and relief to rehabilitation. A numbers of strategies are on the table to pave the way for focused and targeted rehabilitation work. The government and United Nations are trying to secure sufficient resources to complete the daunting challenge.

At this moment, the government lacks the resources due to weak economy and continuous war on terror. At the same time, the government is also facing problems to secure funds from the international community and it seems it will impact the speed and spectrum of government’s interventions.

Apart from financial resources, recent floods in Pakistan also initiated the debate that either Pakistan has a well-managed, operated and organized institutional mechanism to face natural calamities.

Pakistan has created a number of departments, e.g. Flood Commission of Pakistan, National Crisis Cell, etc, and now National Disaster Management Authority (NDMA) of Pakistan. The NDMA was created after 2005 earthquake and before 2005, there no other agency to deal with huge disasters.

The purpose of creation of these departments and agencies was to provide timely rescue and relief services and minimize the impact of disasters in different areas. However, these departments and agencies could not deliver according to the perceived objectives. Recent floods further exposed the entire system of disaster management in Pakistan.

The NDMA has produced a very good document which describes a good strategy to deal with disasters. It covers earthquake, floods, droughts, etc, and talks about different ways to handle disasters. However, there is lack of workable plan and, most importantly, required skills to deal with disasters. NDMA spread its network to district level however necessary resources are lacked at national level.

The flood commission of Pakistan was created in January 1977 to tackle the issue of flood at the national level in the best way. The flood cell was created in the Flood Commission to handle the flood solely and take effective measures to mitigate impact of floods.

The Commission was also entrusted with the responsibility to prepare plan and workable strategies to prevent or minimize the impact of floods. Flood cell was further strengthened with presence of Civil Engineering Cell, Dams Safety Councils.

Federal Flood Commission (FFC) never delivered according to the expectations and perceived objectives. Floods have badly exposed the poor status and performance of FFC. During floods there was very limited presence of FFC. It was the responsibility of FFC to ensure maintenance of levies to control or minimize the impact of floods.

Coordination among different tiers was altogether missing, although the prime objective of creation of FFC was national coordination. Story of other departments and agencies, e.g., emergency relief cell, national crises management cell, etc, is not different.

Pakistan ranks high on vulnerability level to climate change. It is predicted that natural disasters, e.g. floods, droughts, etc, will increase in number and the spectrum would be large. Now the most pertinent question is will these agencies and departments be able to manage climate change-related disasters in future? In the present scenario, a simple answer is a big no.

Climate Change will increase the frequency and severity of disasters in future. Pakistan will be facing more disasters and extent of impact would be higher. Agriculture is major source of livelihood for majority of people and climate change is posing major threat to agriculture. Flood in 2010 also destroyed and damaged physical infrastructure, industry sources of communication etc.

In addition to that there is also question, why in the presence of these agencies and departments Pakistan is not able to manage the disasters, in any form. Why the role of Pakistani Media and NGOs is is more prominent than Government’s dedicated agencies and departments?

Disasters Management related institutions lack proper planning and future strategies. For example, there is no evacuation strategy with any department and if there is any strategy that is only on papers. Evacuation strategy needs proper layout of safe sites, safe passages for timely shifting and rescue, dedicated and well trained staff etc.

In Pakistan, no department has any safe sites, safe passages for timely shifting and rescue, dedicated and well trained staff etc. Recent disasters, e.g. earthquake 2005 and flood 2010, are prime examples. Pakistan Army was only organized institute which helped government in rescue and relief activities. Army also helped the government after the 2005 earthquake rehabilitation work and now is working with government in rehabilitation work for flood affected people. Civil society and media are also playing a major role.

As it was aforementioned that Pakistan is highly vulnerable to climate change, so the natural calamities especially the floods, droughts will increase in intensity and frequency. Therefore, now government has to revisit its departments and agencies to cope the challenges of disasters. Planning and strategies should be shifted from the conventional practices to innovative practices. Following steps can be taken to prepare and cope with the challenge of predictable and unpredictable disasters.

First, develop policy at national level for coordination but transferred powers at district or tehsil level for implementation and proper execution of policies and activities. Also provide the essential infrastructure, financial resources and skilled manpower to perform this job. Emergency decision making power should also be transferred at local level.

Second, map the whole country into different zones on the basis of disaster vulnerability. After zoning the country local authorities, dedicated for management, should be strengthened and provided necessary resources. Third, local authorities should prepare all the plans e.g. preparedness, evacuation plan, mapping of city, identification temporary and permanent shelters, medical assistance, food assistance etc.

These are few and simple steps which government can take and revamp the system and make it more efficient. However, it requires political and bureaucratic will to devise and implement right policies to cope the disasters. There are a number of international strategies and plans are available which can be replicated in Pakistan. California State of USA has a very good plan and implementation strategy which can be replicated in Pakistan. California has close geographically similarities with Pakistan, so it will make our work easy.
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Beyond political opportunism

Perhaps a valid critique of RGST is that mechanisms to implement this bill are weak, which leads to issues of tax evasion and corruption

By Raza Rumi

While Pakistan’s policy debate hovers around political machinations and power configurations, the neglected issue of economic recovery remains central to the viability of country’s future. We are sandwiched between two economic giants who are growing despite the global recession. China has eradicated absolute poverty after decades of high growth rates and effective social policies. India’s GDP growth rate is projected to be 9 percent this year. Both India and China have also improved tax administration, enhanced their revenue generation capacity and implemented economic reforms, which are likely to result in long-term sustainable growth rates. India needs years to catch up with its issues of hunger, poverty and inequity, but its progress appears to be in the right direction.

What have we done to ourselves? We have no consensus on economic reform and tackling poverty. We are living with the lowest growth rates of our history and perennial inflation with little prospects of change. Had it not been for Pakistan’s resilient population, its formidable remittances and the mammoth black economy, we would have faced an economic collapse and resultant, massive social unrest. Having said this, inflation has eaten into the purchasing power of the population. The fixed-income groups and the poor in Pakistan have suffered the most.

Inflation

The causes of the rising price levels are manifold: the increasing budget deficit, the withdrawal of subsidies, the manipulative behaviour of hoarders in the commodities market and excessive borrowing of the government to finance its operations. The government had borrowed almost a quarter of the total money supply so as to finance its needs for a short period of five months. This is illustrative of a textbook case of the excessive printing of money leading to inflation. All these factors make one thing clear: it is misgovernance that is actually leading to inflation.

The rise of the informal economy in our case has also wreaked havoc on the stability of pricing mechanisms. If there was ever a need of accelerating the documentation of economy, it is now.

This is perhaps why the introduction of RGST is a much-needed reform. Admittedly, the RGST will cause a one-off round of inflationary pressure given the indirect nature of the tax. However, the reality is that the opposition to RGST is being mounted in the name of the poor by powerful lobbies. RGST reforms have caused uproar in the business community, fuelled by sections of the print and electronic media. While many politicians have run with hares and hunted with the hounds on the issue of RGST, only a few have debated the actual nature of the reforms. Unfortunately, this issue has turned into another populist rhetoric platform, standing on which politicians and political actors are likely to gain some short-term mileage.

The ‘exemptions’ culture

Pakistan’s power culture celebrates exemptions: from standing in a queue at the airports to respecting traffic lights. Similarly, the rich and the powerful have created a web of tax-exemptions. The RGST package will withdraw many of these state favours. There are no new taxes being implemented in the form of the RGST. While pegging the rate at 15 percent — brought down from 17 percent in many cases — only the exemptions are being withdrawn largely sparing the food items.

The list of proposed withdrawal of sales tax exemptions forwarded to the government by the Federal Bureau of Revenue (FBR) includes computer software, aircrafts, ships, defense stores, tractors, bulldozers, live animals and live poultry, vegetable ghee, cattle feed and fruit juices among others.

Still, there are a few exemptions that are being retained. The proposed list of retained exemptions include wheat, pulses, vegetables, peas, newspapers, books, ambulances, fire-fighting trucks, artificial parts of the body and glucoses testing equipments. Relief goods will also be exempted as authorized by the government.

It is nothing short of falsifying facts when various TV anchors lament the prospective increase in prices of vegetables, etc, and blame it all on the RGST.

Why do we need the RGST?

It is true that being an indirect tax, the withdrawal of exemptions in various commodities will lead to a rise in prices but at the same time it will also expedite the much-needed documentation of the economy. Let’s face it. We have to increase our revenues in order to control the burgeoning deficit, which has already been contributing to rising price levels. Inflation is a real issue regardless of the RGST. No doubt, the placement of progressive taxes is the best way to go but in order to increase the tax base and to document the different sectors of the economy at every stage of the supply chain, the reforms in the general sales tax were inevitable.

According to the finance minister, in total Rs40 billion will be generated from the 10 percent flood surcharge, while Rs25 billion will be raised from the withdrawal of GST exemptions on goods and services. RGST will also increase the number of taxpayers if properly implemented. This will lead to an increase in our tax-to-GDP ratio, which is unfortunately one of the lowest in the world.

Perhaps a valid critique of RGST is that mechanisms to implement this bill are weak, which leads to issues of tax evasion and corruption.

Beyond RGST

If RGST is passed in the National Assembly, the government will have to fix the issues of capacity and institutional mechanisms.

Suffice it to say, bolder steps will be required in the future to expand the revenue base of the economy. This would include increasing the agricultural sector taxes. The problem with this sector is that most legislators in the provincial assemblies represent the landowning classes. Furthermore, provinces have little capacity to implement an effective tax regime. But this should not undermine the much-needed reform and debate on this must continue. However, to present agricultural income tax as a substitute for RGST is a fallacy at best.

At the same time, Pakistan would need to manage expenditures, especially on the current side (administration, defence and debt-servicing) and find an alternative paradigm for development spending, which has been a victim of contractors’ greed and the major source of rents and malfeasance.

Political opportunism

As mentioned above, the coalition partners have used the RGST as a tool to bolster their position within the power matrix. The Awami National Party (ANP) is the only political party that has supported the PPP in imposing the RGST.

The Pakistan Muslim League Nawaz (PML-N), Pakistan Muslim League Quaid-e-Azam, (PML-Q) and the Muttahida Qaumi Movement (MQM) have rejected the RGST. The Jamiat Ulema-e-Islam (Fazlur Rehman) (JUI-F) sits on the fence and is gaining brownies in the form of the chairmanship of the Council for Islamic Ideology and perhaps more in the days to come. The MQM chief Altaf Hussain has repeatedly called for taxing the landlords instead of imposing RGST. PML-N, PML-Q and JUI-F have also reiterated the need to check corruption within the current tax collection system instead of burdening the common man through the proposed reforms.

The Bill was passed through the Senate as the recommendations by the Senate Standing Committee on RGST were approved on the 26th November 2010. The Committee made 15 recommendations to the GST Bill 2010 and four recommendations as an amendment to the Finance Bill 2010. It proposed exemptions for food items, medicines and stationary for education purposes. PML-Q’s walkout helped the government. Intriguingly, Ishaq Dar, a senator belonging to PML-N, a party that has been a vociferous opponent of the RGST bill, signed the bill in the Finance committee.

The RGST Bill is likely to be tabled in the National Assembly on 18th December 2010, where recommendations from the National Assembly Standing Committee on Finance will be debated.

It is unclear whether the government will be able to get the bill passed through the NA. However, the government will try to negotiate with its recalcitrant allies, i.e. MQM and JUI-F to seek their support. Otherwise, there are signs that PPP has entered into a pact with PML-Q for tacit support. Already, a PML-Q MNA has been appointed as the Chairman ERRA and the process of including PML-Q legislators in the Cabinet might continue. PML-Q could simply walk out of the NA proceedings, which will provide the government with a majority at the time of the voting.

Ideally speaking, given the importance of this reform, the federal government ought to restart dialogue with PML-N. Given that the Punjab province is being ruled by PML-N, such a course of action will augment political stability. If we want to revive the economy and improve our long-term prospects, hard reforms will need to be taken. RGST may be the first step in this direction. Otherwise, we will continue to be a rentier state, dependent on the global strategic games and life-support mechanisms such as the IMF.

The writer is a policy adviser and writer based in Lahore. He blogs at www.razarumi.com. Email: razarumi@gmail.com
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Condemning cartels

On World Competition Day, governments in developing countries need to be reminded to join in and prosecute international cartels

By Pradeep S Mehta
On 5th December, 1980, the United Nations adopted the international standard for competition laws under what is called the United Nations Set of Multilateral Principles and Rules for the Control of Restrictive Business Practices, better known in the international community as the UN Set on Competition Policy.

This Set has guided a large number of developing countries to draft and adopt new competition laws. From about 30 countries in 1995, today over 120 countries have adopted a new law or improved their existing competition law, and few more are in the queue.

Recently, the Set was reviewed at Geneva at the UNCTAD’s 6th Review Conference on the Set in the midst of enthusiastic delegates from over 100 developed and developing countries, which was also celebrated as the 30th anniversary of the Set.

To mark this anniversary, a proposal was mooted to observe 5th December the World Competition Day by the International Network of Civil Society on Competition (INCSOC), an international coalition of 164 competition practitioners, civil society organisations, researchers and legislators spread across 66 countries.

Large number of delegates at the conference supported the idea and have agreed to celebrate the World Competition Day in their own countries on Sunday 5th, or Monday 6th being the next working day. Incidentally, many countries are already celebrating National Competition Days, such as European Union member states, Brazil, Zambia etc and other countries are also considering doing so.

It was also agreed that the day be used to raise awareness and rally common people around the issue of air cargo cartels which have been causing serious harm to consumers and the economy.

While cartels are most pernicious of all anticompetitive practices and are very difficult to detect and investigate for their inherently secretive nature, the task gets more difficult in aviation industry because it operates across borders. However, once one airline was caught it had a domino effect around the world.

A bit late, but the EU did act on it by slapping one of its biggest fines in history on eleven airlines totalling 799.4mn euros ($1.1bn) for running a global cargo cartel, which manifested itself through coordinated action on surcharges for fuel and security between 1999 and 2006. Those penalised included Air France-KLM, British Airways, Cargolux, SAS, Singapore Airlines, Air Canada, Qantas, LAN Chile, Martinair and Japan Airlines. Lufthansa was pardoned because they spilled the beans.

The prosecution by the EU was not the first for most of the airlines, as earlier the US Department of Justice, had also found that some of the world’s biggest airlines had conspired between 2000 and 2006 to fix cargo prices. In 2009, three cargo airlines in the US, agreed to pay fines totalling $214mn for the same crime. In this case, 15 airlines were prosecuted and a total fine of $1.6bn was imposed. In addition, three senior air cargo industry executives agreed to serve jail terms. This concerted practice to fix cargo rates started in 2001 and continued till February 2006. Before this, in 2008, four airlines, including Air France-KLM and Cathay Pacific, had to pay fines in the US totalling $504mn for their roles in a criminal conspiracy to fix surcharges on air cargo shipments.

The Japanese Fair Trade Commission, in 2009, was also reported to have notified more than ten companies that they would be fined about ¥10 billion for operating a cartel for international air cargo fees. This year, the South Korean Fair Trade Commission imposed a total fine of 119,544 million won (nearly US$100mn) on 19 airlines for their conspiracy to levy fuel surcharges and continued to raise surcharge rates for air cargo to-and-from Korea between 1999 and 2007. The South African and New Zealand authorities are also investigating similar cartels which affected their markets.

Cartels in the air cargo industry should be of concern to all stakeholders as they have a serious negative impact on efforts towards economic development and poverty reduction in developing countries. A study done for the International Air Cargo Association and Air Cargo Forum by John Kasarda and others in 2006 showed that the air cargo industry is responsible for transporting about 29.9 percent of all international trade, with an annual value of $2.7tn.

The study also showed that Korean Air, Lufthansa, Singapore Airlines, Cathay Pacific and China Airlines were the largest combination passenger-cargo carriers in terms of capacity. American Airlines and United Airlines were found to be providing substantial cargo service even without use of dedicated freighters, while airlines such as Lufthansa, Air France and KLM had broad geographic coverage, servicing more than 50 countries and British Airways offered cargo service to over 100 countries.

It is, therefore, very alarming to see that almost all the major players in the air cargo market were part of a cartel, and one shudders at the impact in terms of overcharges that consumers across the globe suffered due to the cartel.

The air cargo transport also specializes in high value to weight products (e.g. minerals), perishable goods, emergency deliveries and products requiring high security. Mostly, air lines are used by developing countries to transport either finished goods for resale or raw materials for value addition to produce finished goods. Most of these products find their way into the value chain of most finished products; hence cartelizing their transportation has serious multiplier effects on the prices of the final products.

Developing countries are not spared from the impact of the cartel as there is significant amount of air cargo trade going on in these regions, a proportion of which is handled by members of the cartel. The proportion of exports shipped by air from less developed regions such as Africa and some parts of Asia exceeds 10 percent.

What is, therefore, apparent from this is that competition authorities in developing countries also need to be in a position to join in and prosecute such international cartels once they are discovered. Being hamstrung by resources and perhaps their own weak laws, competition authorities in developing countries should innovate and use various means at their disposal in handling international anticompetitive practices. This could include initiating and enlarging informal cooperation between authorities in the countries targeted by the cartel. The first World Competition Day on December 5th should be the D-Day for launching a global crusade.



The writer is Secretary General of CUTS International and Chairman of INCSOC
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Default Sunday, 5th Dec, 2010

Human angle

Getting to the victims and helping them is what counts, whoever and wherever they may be

By Zaman Khan

The youthful Lars Oberhaus has been in Lahore as Head of the International Committee of Red Cross (ICRC) since February 2009, a stay he claims he has enjoyed helping people in real need of rescue and assistance in many parts of the country. Born in 1976 and raised in Germany, Oberhaus holds an MA in International Relations and Political Economy from the University of Aberdeen, Scotland (2000) and an MSc in Security Studies from the Department of International Politics, University of Wales, Aberystwyth (2001). Prior to joining the ICRC in 2004, Lars worked for Reuters in Geneva and Frankfurt. German being his native language, he also speaks English and French, and knows Latin. Oberhaus is married with one child. He has worked in many courtiers, including Afghanistan, Sudan, and Palestine in the field of humanitarian assistance from 2004 to the present day. The News on Sunday happened to sit with Oberhaus the other day and talked about his experiences of working in different regions around the globe.

TNS: Why did you choose to join ICRC?

LO: I had the curiosity about the world and the determination to help people, less fortunate than myself. As a student of global politics, I have a natural interest in humanitarian matters.

The News on Sunday (TNS): Where were you born and educated?

Lars Oberhaus (LO): I was born in 1976 in Hanover, Germany. My father is a civil engineer and my mother an artist. I was raised and went to school in Frankfurt and Main. I attended graduate school in Scotland and Wales. A defining event during my childhood was the 1989 fall of the Berlin Wall and the end of the Cold War, a great relief!

TNS: How do you compare your experience as a journalist with working in ICRC?

LO: I was working for a financial media firm and that was very different compared to journalism. The key difference is confidentiality. The ICRC seeks to address issues discretely and directly with the actors involved, without publicity. Working for the ICRC can also be very hands-on and intense. Getting to the victims and helping them is what counts, whoever and wherever they may be.

TNS: What is the mandate of ICRC?

LO: The mandate of the ICRC is to help people affected by armed conflicts and other situations of violence. This comprises humanitarian protection and assistance in emergency situations and promoting respect for International Humanitarian Law or IHL. The mandate is based on the 1949 Geneva Conventions, their Additional Protocols and the Statutes of the International Red Cross and Red Crescent Movement. The ICRC is strictly neutral and independent, never taking sides and focused only on the needs of victims.

TNS: In which fields ICRC has been involved?

LO: The main areas of activity are visiting detainees, protection of civilians, reuniting families, ensuring economic security, water and habitat, health, cooperation with the National Red Cross or Crescent Society and building respect for International Humanitarian Law. The ICRC is active in 80 countries worldwide, with a global budget of 1 billion Swiss Francs. The biggest operations are in Pakistan, Afghanistan, Iraq, Israel and the Occupied Palestinian Territories, Congo and Sudan.

TNS: What role ICRC has played in flood-affected areas in Pakistan?

LO: The ICRC’s mandate is related to man-made disasters, but due to the scale of floods the ICRC launched a major relief operation in all four provinces and FATA. To date, the ICRC, in cooperation with the Pakistan Red Crescent Society, has distributed food rations and relief items to almost a million people, including 200,000 in south Punjab. In KP, the ICRC has treated over 4000 patients in diarrhea treatment centers. In KP and FATA, the ICRC has been helping to restore water supply for 100,000 people. The flood relief budget is 70 million Swiss Francs, bringing the total 2010 budget to 130 million Swiss Francs, the biggest ICRC operation in the world. Our work is conducted in close partnership with the Pakistan Red Crescent Society, to whom we provide substantial material and technical support.

TNS: In what other fields the ICRC has been working?

LO: The ICRC has been assisting people affected by fighting in KP and FATA. The ICRC operates a surgical hospital for wounded patients in Peshawar and supports medical facilities in FATA with medicines, materials and training. We are also helping to enhance mass casualty preparedness by conducting war-surgery seminars and emergency room triage training. We have been visiting detainees in Pakistan and abroad. The ICRC helps Pakistani detainees in Afghanistan and Guantanamo Bay to stay in touch with their families by transmitting letters, or by organizing phone and video calls for the exchange of personal and family news.

TNS: Has the ICRC worked for Internally Displaced Persons (IDPs)?

LO: Yes. Last year, in cooperation with the PRCS, we set up camps and assisted some 1 million IDPs from Swat as well as host communities in the Malakand division. After their return, the ICRC provided farmers with seeds and fertilizers to get started again. The ICRC has also been assisting 200,000 IDPs from FATA in Hangu.

TNS: You have worked in Palestine, Afghanistan, Kabul. Kandhahar, and Sudan (Darfur). What have been your experiences?

LO: In Darfur, I was part of a large relief operation in a very remote area, which included for example providing safe water to thousands of IDPs and carrying out measles and polio vaccinations in areas where government workers were afraid to go. In Afghanistan, I was in charge of the visits to detainees in the US detention facility in Bagram Airfield. In the Occupied Palestinian Territories, my role was to work with farmers to ensure that they maintained access to their land where the so-called West Bank Barrier deviates from the green line. These were all complex and meaningful assignments. I am grateful for all those experiences.

TNS: How do you see your stay in Pakistan?

LO: I arrived in February 2009. Pakistan has been going though a tough period since then. There was the fighting in Swat and 2 million IDPs and civilians were targeted in blasts in the major cities, including Lahore. This summer the floods occurred. The ICRC was involved in mitigating the humanitarian consequences of all these events. I am glad I could play a role in this (humanitarian assistance) and be useful.

TNS: What’s your personal experience of living in Lahore?

LO: Lahore is full of wonders. I have a very good experience living here and have made good friends. I wish to thank Lahoris for their outstanding hospitality.
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