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Business diary from Lahore

SAQLAIN IMAM

LCCI

LAHORE: The President of Lahore Chamber of Commerce and Industry, Mian Tariq Saeed Saigol has pointed out that the harsh laws envisaged in the draft - Pakistan Environmental Protection Agency Act, 1995 would hold up the growth of industrial sector in Pakistan.

This probably the first reaction from any genuinely recognized body to the environment protection zeal that has hit the elite and foreign funded non-governmental organizations. There has been a debate going on in almost all developing countries whether the poor countries are responsible for the pollution in the world.

A little has been asked about the authenticity of the facts and figures that support the Ozone depletion theory. However, the environmentalists be they in the West or in the Third World, have been opposing any development in industry or scientific research which they "feel" or "believe" could lead to environmental pollution.

The first impact of the environmental protection frenzy is that some legislation has been introduced in Pakistan which is likely to retard industrial growth. A country that needs fastest possible growth rate in industrial and maufacturing sectors must not be discouraged on the basis of some still-to-be-scientifically proven 'theories'.

There are several other factors that have already arrested the growth of Pakistan's economy. Then why another abstract factor should be introduced. The environmental protection laws may give some cosmetic advantage at some international fora, at the cost of impressive industrial growth rate at home. Saigol is perfectly right when he says that policing is no solution to control the pollution. There should be some friendly cooperation between industrialists and the government, instead of chasing after the former by the latter.

It is worth mentioning here that a Pakistani company, Ravi Chemicals, was deprived of importing a chemical manufacturing plant from Denmark because some 'greenpeace' activists opposed the deal and physically blocked its shipment. The plant had been given a clearance by various agencies taking care of environment, but the opposition to that plant prevailed, although it was perfectly irrational even according to the standards of the international environmental protection agencies. This is an attitude of some environmentalists which has been described by some Western critics as 'neo-facism' against the development of the Thirld World. The greenpeace activists have been defeated recently in some French courts for adopting violent tactics to stop the manufacturing or shipment of industrial plants that they (greenpeace activists) believe are detrimental to environment.

In this perspective, Tariq Saigol's apprehension that harsh laws to protect the environment would be misused, is not unfounded. His suggestion to make the pollution control system cost effective should receive due consideration from the policy makers in the government. It is feared that since the industrialists' lobby is weak in Pakistan's political culture, its apprehensions might be ingored. However, even these harsh laws proposed in the draft have not been envisaged in most of the laws enacted or proposed in the developed world.

LSE

President of the Lahore Stock Exchange, Dr. Yasir Mahmood, has predicted the improvement of the stock market in the city. He said this week that despite the fact that the 'good future' as he predicted, is based on individual investors', nonetheless, the LSE's volume touched new heights in the recent past. "We have faced the birth pangs and now we are having growing pangs."

He further reiterated: "Our object should not be commissions. Honest and fair projections towards stock market's uplift and client service should be the prime objectives." Dr. Yasir Mahmood seems to have rightly diagnosed the problem of the "growing" stock markets in the country.

Meanwhile, the Lahore High Court has ordered the Corporate Law Authority to decide Alico shares trading case by September 15 in which some petitioners have made allegations of gross violations of Security Exchange Act, 1969, as some members, directors and the President of the LSE were involved in the 'manipulation' of the trading of the shares from July 4 to 7.

EXPORT

The carpet industry continues to face the decline in its business as the ghost of Iqbal Masih, allegedly a teenager, lasts to haunt the exporters who fear a boycott of their product in European markets. Although Commerce Minister, Ahmad Mukhtar, has assured that there is no boycott of Pakistani manufactured carpets, the trend in European nations about child and labour is becoming totally against the interest of the Pakistani exporters.

There has been a noticeable change in the attitude of carpet manufacturers as they have started allocating one percent of their total turn-over for the welfare of workers in the manufacturing sector, but the release of the pressure from abroad is still not in the sight.

The International Confederation of Free Trade Union's demand for suspension of benefits to Pakistan under the existing Generalized System of Preferences (GSP) arrangements because of bonded labour, will hurt directly the carpet industry before its affects any other export sector of the country.

SUGAR

The sugar industry has been facing a price hike, not due to any exogenous factor, rather due to some manipulations done by some speculators in this sector. Rightly pointed out by an English language newspaper, there are eight to 10 persons who hold the real anchor of sugar ship. The rate of sugar are daily put by this elite lobby of Seths.

According to the report, only in the first 12 days of the current month, prices of sugar soared from Rs 1,500 per maund to Rs 1,620 per maund. This increase in the sugar price has nothing to do with the increase in the input-cost. It is merely a manipulated one. Should the government play its role to control the manipulation that is expressedly unethical?

CBR vs MUKHTAR

The Minister for Commerce, Ahmad Mukhtar, recently assured the business community in the city that the CBR would not press on its drive for obtaining 'sensitive' information about their income and expenditures required in the newly introduced income tax returns forms. Whether or not the demand of the business community was worthy of consideration, the minister had made promise to get the job done. However, the result is that the CBR, instead of notifying the promised amendment, it has intensified its campaign. The lesson is: do not trust a minister, only trust an officer (bureaucrat).

NFC

The Punjab government is finally awake and has decided to take up the issue with the federal government regarding the exclusion of the excise duty on tobacco and sugar from the terms of reference of the National Finance Commission's forthcoming meetings this year to revise the award for the next five years.

The Punjab chief minister has ordered a detailed study to exarmine the consequences of the exclusion. A political aide, of the Punjab chief minister has said that the Punjab would not give unnecessary sacrifices at the cost of its due share in the divisible pool of the NFC.

RAILWAYS

The Pakistan Railways continues to 'revise' various proposals for utilization of Rs 40 billion allocated to it in the Eighth Five Year Plan that commenced last year. The plan was launched in July 1994 retrospectively with effect from July, 1, 1993.

MOTORWAY

The PPP government has finally agreed to allow Daewoo to resume with the six-lane motorway, already under construction from Lahore to Islamabad. It may be considered a victory for the Nawaz Sharif who was termed a bad planner when he launched series of building motorways across the country, PPP opposed the projects vehemently. Now they seem to have realized the importance of motorways. The Turkish construction company is also believed to have been allowed to build the remaining part of the motorway, from Islamabad to Peshawar.

WAPDA

WAPDA recently ordered the Heavy Electrical Complex to manufacture 81 transformers. Since its facing dearth of capital, the orders of transformers have been placed for a phase-vise delivery of the equipment. The Kot Addu Power Plant, which is an emblem of competence of WAPDA engineers, has not been handed over to foreign buyers. The Pakistan WAPDA Hydro Electric Central Union reiterated its position that workers would not accept any decision imposed upon through the use of threat or force.