Internal security biggest threat to
democracy and economy
By Saquib Saeed
of destruction, caused by non-state actors, has pushed
Pakistan far off the world’s business map.
Due to its security
concerns, the country remains relatively isolated as the
rest move on from Pakistani products.
While this should have
jolted every Pakistani into action, not much happened.
The country remains
paralysed by a narrative that diagnoses corruption
responsible for all woes.
It suggests that toppling
a government through street power would fix all troubles.
It confuses masses, threatens
our nascent democracy and stops us from tackling the real
issue — internal security.
By now, this narrative has gathered so much traction that
Islamabad’s under siege.
It’s hard to say whether this
is based on misguided zeal or crafty brinkmanship? Whatever
the case, the sit-ins have not seemed to help the economy.
Our domestic economy is mostly agriculture-based with
industries like fertiliser, sugar, dairy, poultry, animal
feed among others.
None feel the pinch as much
due to the country’s isolation. Most of these sectors,
including transportation, real estate and construction,
survive on the strength of demography alone.
Low-tech manufactured goods
find eager domestic consumers. It does not help when most
politicians also own such industries.
An often cited number, based
on rough estimates, is the loss our economy has suffered due
to security issues — $100 billion.
This is easily countered by
the populist promise that the $200 billion stashed in Swiss
banks shall be brought back when the corrupt are held
One may gauge the problem by
noting drastic reductions in Foreign Direct Investment,
which stood at $24 million in the first month of 2014-15.
Dismal as it may be, it only
records our slide from bad to worse. What it can never
record are the billions when investors decide not to pursue
new business ventures in Pakistan.
For our mainstream politics,
these opportunity losses may be non-existent and hence, not
worth shedding tears for. There is one more loss that
remains eminently measurable.
The money we lose when
importers discontinue buying products from Pakistan.
This loss is colossal and has
decimated our apparel and the home textile export
industries. Barring our internal security issues, there is
no reason for the losses incurred by these giant industries.
Pakistan has potential
We have lost despite possessing high capacity for
processing, cheap and abundant labour, excellent
infrastructure, our own home grown cotton and an efficient
banking and finance industry.
We have lost when China has
been shedding its capacity due to its ever-escalating labour
cost and its consequent move to high value-added
We have allowed Bangladesh to
take on the $20 billion apparel spoils from China in the
last 10 years. China has already shed $30 billion from its
$80 billion share of global apparel trade.
Far from expanding, we have 80% of our installed production
capacity unutilised in home textile, while new apparel units
have not been set up. This low hanging fruit is worth $40
billion per year and 10 million new manufacturing jobs. If
we factor in a decade of such losses, we get a figure of
Once again the popular discourse holds corruption
responsible as the main reason behind declining exports.
Another bizarre popular argument claims all our factories to
have shifted to Bangladesh. Both are false. There are
hundreds of Pakistani technicians and textile engineers
working in Bangladesh.
But these are not business
owners or investors. These unfortunate professionals have
simply been forced to relocate to secure livelihood; after
they were laid off by their previous employers in Pakistan.
Bangladeshi factories suffer at least 24 hours per week of
gas outage. No new gas connections are being offered to new
factories. Load-shedding occurs for at least 8 to 12 hours a
Capitalism, being remarkably
resilient, finds novel solutions to the most intractable of
problems. In Bangladesh’s case, dual-fuel diesel/gas
generators mostly do the trick.
Their higher cost is built
into the product prices and passed on to their buyers. Some
factories also pull home-made tractor trains fabricated by
joining dozens of CNG cylinders together.
These tractor trains queue up
for hours at CNG stations to get their fill. On their
return, they are unhitched and connected to factory’s gas
mains. Some Pakistani factory owners improvise by burning
firewood, coal or furnace oil in their boilers.
So long as a manufacturer has an assurance of steady sales,
he can circumvent every challenge; electricity or gas being
the less important ones. Clearly, our biggest challenge is
sales orders drying up.
Western buyers find it
life-threatening to travel to Pakistan; a chore they must
perform regularly for the continuity of their business.
Lacking any production
facilities of their own, these people need to stay in our
factories at the start of each buying season.
Their presence ensures
that their computer generated designs and fashion creations
are sampled and transformed quickly into real products.
Bulk orders follow naturally
when they return home. But security concerns change their
destinations to other countries.
These mind numbing losses are
directly attributable to security issues.
No amount of government
corruption can even come close. But, the populist narrative
keeps gaining ground by peddling corruption as the only
sickness and a regime change as the only cure.
The Express Tribune