A 'niche-based' strategy

In the article published in this space on February 17, I proposed that policymakers in Islamabad could follow a new and somewhat novel strategy for bringing about a marked increase in the country's rate of economic growth. Such a policy, I suggested, could help Pakistan to leapfrog from a position at the back of the row of developing Asian economies to the one close to the front.

Such a strategy would exploit systematically and in an intelligent way three extraordinary advantages Pakistan possesses in terms of its physical and human endowments - an enviable geographical situation, an agricultural sector with great but still to be utilized potential, and a young population that also happens to be very large - soon to be the fourth or fifth largest in the world. I discussed the advantage bestowed by geography in the article cited above.

I suggested that, with the right kind of investments in physical infrastructure and human development, Pakistan could occupy a strategic and profitable place at the cross-roads of two highways of regional commerce.

One of these highways would connect China with the Pakistani ports on the Arabian Sea, then onto the Middle East, and the other would link India with Afghanistan and Central Asia.

Today, I will write about the interaction between agriculture and population for lending dynamism to Pakistani economy. The beauty of such a strategy is that it would help turn Pakistan's two impressive endowments - a large population and a potentially rich agricultural sector - into impressive economic assets. This would happen by recognizing that an intelligent use of well trained and educated workforce could increase enormously the productivity of agriculture.

Pakistani planners don't often recognize that they could use the country's rich agricultural base on which to build the structure of a modern economy. Pakistan's agriculture has enormous potential not only because of the fertility of the soil but also because the land the country's diligent farmers cultivate is irrigated by one of the world's great river systems - the Indus and its tributaries.

Thanks in part to the ingenuity of the engineers who developed the system from the time of the Mughals, the British and the early days of Pakistan, the country now has the largest contiguous irrigated area in the world.

Water in the system is available throughout the year and in sufficient quantities to grow high value crops. Pakistan's irrigated area is much larger than that of the Colorado and California systems and the system in the Indian states of Punjab, Haryana and Rajasthan.

Unfortunately, a combination of government policy and poor base of knowledge of the millions of farmers who till the soil in this system, agricultural productivity remains low.

The government could have laid down the policy framework to guide the farming community towards producing higher productivity crops. It could have set up institutes of agricultural research and technology to help the farmers move towards new patterns of production.

It could have helped to create a system of finance to provide credit and management know-how to the farming community. It could have created an infrastructure to move the agricultural surplus from the farmers to the market place.

And it could have developed markets abroad for the country's surplus agricultural products. None of this was done systematically. But all is not lost and the extraordinary potential of the agricultural sector could still be realized.

The government of Pervez Musharraf - in fact, the president himself - has recognized that Pakistan has a great deal to do to preserve and further develop its large water resource.

This will need not only the construction of new reservoirs - something that the president has repeatedly emphasized in his many public pronouncements - but also to improve the quality of the large system that already exists.

It has been known for many years that a significant amount of water is wasted because of the poorly aligned and porous primary, secondary, and tertiary canals that carry water from the four major rivers that flow through the country - the Indus, the Jhelum, the Chenab and the Ravi - to the millions of acres of land still thirsty for water.

A large labour-intensive public works programme could be launched aimed at cleaning the tens of thousands of miles of irrigation channels that bring water to the land under cultivation.

Labour intensive works could also be undertaken to line the canals with bricks and mortar in the sections where leakages occur. Surplus rural labour could also be used to build farm to market roads.

Such a programme could be entrusted to the newly created local bodies. It could be financed jointly by the state and the farming communities that would benefit enormously from this type of investment. That way the burden on the national exchequer would be reduced.

This is, however, not the only way Pakistan could put to good use its large and young population. Unfortunately Pakistan, one of the world's most populous countries, has not taken advantage of the window of demographic opportunity that has opened up in recent years.

The reason for this is not any lack of imagination on the part of the country's entrepreneurs. The problem has been the government which, in the politically chaotic period of 1988-99, created so much uncertainty among the managers of Pakistan's fledgling private industry that they understandably opted for a wait-and-see approach.

That should now end. Pakistan's private sector should now begin to direct its attention towards the opportunities that are coming its way as a result of the massive restructuring of the global economy brought about, in part, by the fundamental demographic change that is afoot in most parts of the developed world. I have covered this subject before in this space pointing out the opportunities created for the poor but populous countries by what I have described as "demographic asymmetry."

This asymmetry has been caused by the rapidly declining rates of fertility in developed countries while the populations in much of the developing world continue to increase.

My suggestion is that the authorities in Islamabad - those who look after finance, planning, commerce and investment - should carefully note the opportunities created for Pakistan by this development and by the way the global economy is changing. Such an examination should identify the niches in the global economy Pakistan could occupy for itself.

In that context I should mention that sometimes casual observations can help to point a way towards economic progress. Some years ago when I worked as the World Bank's Vice President of Operations in Latin America, I had the opportunity to get to know the region well.

As a part of my job I paid visits to many countries from Mexico and Central America in the north and Argentina and Chile in the south. On one of these visits - to El Salvador in Central America - I met a group of entrepreneurs who had developed an extraordinarily powerful industry based on meeting America's growing demand for seafood.

This group of El Salvadorians had decided that there was considerable value to be added if prawns - a favourite seafood in America - was not exported in raw form. Profit margins would be considerably higher if prawns already cooked on skewers were dispatched directly to the supermarkets and restaurants.

This turned out to be an amazingly successful business plan. It was also labour intensive and provided well paid jobs to thousands of people. And it created a unique set of opportunities for the country's transport sector.

How could Pakistan get into this kind of business? One answer to this question is based on another personal observation. Last summer my wife and I drove close to a thousand miles in northern England and Scotland.

We were struck by the fact that even in small towns the only thing that was palpably foreign and ethnic were "balti ghosht" restaurants. Given the cost of labour in Britain and given the presence of a dynamic expatriate community from Pakistan settled in that country and already engaged in various businesses, a new line of activity could be developed.

It is not inconceivable to imagine that the fare served in these mostly "take-out" ethnic restaurants could be prepared and flown from Pakistan. Admittedly, Pakistan is a long way from the United Kingdom. But distance has not stopped flower growers in Ecuador from supplying florists in Miami and points beyond.

Even with air freight included in the business plan, it would still be attractive for entrepreneurs in Pakistan and Britain to construct a supply chain starting with kitchens in Pakistan and ending either in the shelves of grocery stores or on the tables in Britain's ethnic restaurants. This is an example of one of the many niches Pakistani exporters could develop.

There are significant changes in lifestyles in the post-industrial societies that are opening new but not easily recognized niches in the economies of the western world.

That is why more and more opportunities are available for the countries that have the labour force prepared to do the kind of work shunned by the workers in the West. It is for this reason that I believe there is profit in building a supply chain originating in Pakistan's kitchens with their preparations carted by planes to consumers in the West.

These supply chains could incorporate specially equipped trucks and aeroplanes to ferry the produce from Pakistan to various points of distribution in Britain and other countries.

These distribution points could serve grocery stores and restaurants scattered around the country. This is exactly what the prawn exporters are doing in El Salvador to serve the lucrative American market.

This is just one example of the way one part of the Pakistani production system could successfully exploit adding value to an important part of the agricultural economy (livestock, fruits and vegetables) by using the talent available (chefs, meal planners, food-packers) to transform raw material into finished products (cooked meals) and transport them by the cargo planes of domestic airlines (not just PIA but also privately owned carriers) for distribution to a chain of restaurants and take-out stores that have become such an important part of the post-modern British lifestyle.

There are several other examples where such a strategy could bear fruit. Let me mention one other possibility. The abundant availability of raw material (cotton fabrics) and talent (fashion designers) in Pakistan could create a niche in America and western Europe.

We can notice the impact oriental fashions are having on western consumption. Take a look at the display windows of such large stores as Harrods, Selfridges, Marks and Spencer, Macys and you would recognize instantly that South Asian designers are having a major impact on what the young in the West are now wearing. Pakistan now has a fledgling fashion industry in cities such as Karachi, Lahore and Islamabad. This could go international with some help from the government.

What is the government's role in getting such a "niche-based" strategy to work? Building the kind of complex supply chains I have described above requires skilled people.

The government could help by setting up specialized institutions to train people in food product marketing, clothing design, air transport of delicate cargo. It could provide tax incentives to invite venture capitalists to invest in these new industries.

It could improve financial regulations to help the banking industry and capital markets to promote the development of a host of new enterprises serving new markets.

It could encourage the airline industry to develop the capacity to deliver perishable products quickly and reliably from production centres in Pakistan to centres of consumption in America and Europe. What is required is a vision supported by a strategy to turn Pakistan's large and young population into skilled entrepreneurs catering to the rapidly changing global market place.

A rebel princess

I cannot, truthfully, claim that the late Princess Abida Sultan was someone I knew well though I wish I could because she was a remarkable lady. I have been lucky enough to have known some men and women of the highest calibre or " first intensity" as the late Rustom Minwalla, a lawyer-intellectual, would have put it and she would have been in the top drawer.

I did, however, meet her. In the middle 1970s, PIA built its squash complex and inaugurated it with the Hashim Khan Trophy and the Pakistan Open. The Princess was a regular visitor and Nur Khan introduced me to her and told me to make sure that she was looked after. I made it my business to receive her when she arrived and to see her off.

Between matches, I would take her to the lounge and we would talk mainly about squash. I did not know then that she had been an All India squash champion. I never met her again. Somehow, it never struck me that she was Shaharyar Khan's mother. Shaharyar was a good friend of mine.

Last week Ardeshir Cowasjee came to see me. He feels it is mandatory to talk some cricket with me. And talking cricket led to Shaharyar Khan and Ardeshir asked me if I had read his mother's book 'Memoirs of a Rebel Princess'. I said I hadn't and he promised to send me a copy, a promise he redeemed and within hours he sent me the book.

I read it in one go, a fascinating book about a woman of many talents but most of all of great fortitude and as the blurb on the dust-jacket of the book says, " a committed democrat and humanist [who] continued her crusade against bigotry and the violation of human and democratic rights."

Princess Abida Sultan had been the heir-apparent and would have succeeded her father Nawab Hamidullah Khan as the ruler of Bhopal. She chose, instead, to migrate to Pakistan, an agonizing decision to leave behind her family and to up her roots. She never regretted her decision.

Pakistan did not spread out the red carpet for her and her description of how she managed is heart-rending and sad, if not a disgraceful commentary on those who administered the country in those young and raw years. She could have wallowed in self-pity but clearly she was made of sterner stuff. She gave an inspirational meaning to self-reliance. She could have cashed in on her celebrity. But she had come to Pakistan out of conviction and the ideals of the Quaid-i-Azam. She had given up a whole princely state.

She narrates with only slight bitterness how she was able to build her house in Malir, trekking out daily in the searing heat to sit under a neem tree to supervise the workers and at the same time being "tricked and fleeced by architects and contractors who often did not deliver after receiving advance payments." In 1951 she moved into her half-completed house, which had no electricity or water, no roof, no, windows and she slept in the verandah under a mosquito net.

She describes the political scene in the early 1950s as being in a state of turmoil. Despite the hardships she underwent, she is able to say:" In those early years, there was a remarkable verve and unity among the people with rich and poor, Mohajir and indigenous, shia and sunni, men and women; all putting their shoulder to the wheel of state to ensure its success through a sense of commitment. "

If the first impressions were upbeat and hopeful, the final impressions were more down-to-earth, a reaffirmation that it is better to travel hopefully than to arrive. The disenchantment had nothing to do with her personally but was in the form of a betrayal of the Quaid's Pakistan: "My deep regret, however, has been the manner in which our leadership, both civilian and military, have destroyed the foundations of the edifice that the Quaid had conceived, " she writes in the last chapter.

Harsh words but not bitter, disillusionment rather than anger. This she reserves for those she held most dear: "The people of Pakistan must share the blame for allowing the Quaid's ideals to be trampled upon, for basic democratic human rights to be denied, and for the melting down of our cherished institutions without even raising a whimper. "

But it was not all darkness for her. Her dearest possession was her son and she was both an anxious and caring mother and she watched over his education and his career. She felt a sense of guilt that her decision to migrate to Pakistan had denied him riches and a life of ease in Bhopal.

But there is a sense of vindication and celebration that he made good in such a splendid manner, "but it was not until he independently turned down his grandfather's enticing offer to return to Bhopal in 1954 that I felt reassured that his commitment to Pakistan was born from within and had not been influenced by filial obedience," writes the doting mother.

I am astonished that no government has seen it fit to confer a high civil award on her, such an award would have honoured the honour. Dilip Kumar is the recipient of one of our awards. I have no quarrel with that. I knew Dilip when he was a struggling film actor who would visit our house in Mumbai. But we have chosen to ignore such a remarkable and outspoken lady who in other countries would have been declared a national treasure. The loss is ours.

More walls come up in Baghdad

Each time I return to Iraq, it's the same, like finding a razor blade in a bar of chocolate. The moment you start to believe that "New Iraq" might work - just - you get the proof that it's the same old Iraq, just a little tiny bit worse than it was last month.

At the border it was all smiles. Passport formalities would be over in minutes. But $10 would help. It did. That's what we used to do under Saddam - they are the same Iraqi officials, of course, just not up to their previous standards of venality. But soon, no doubt, we'll be up to $15, or more.

The bombed road bridge on the Baghdad highway has been repaired, despite the fact that the owner of the construction company rebuilding it was murdered five weeks ago.

There's a three-mile convoy of new American troops humming westwards along the motorway - you can tell the new units because their humvees and armour are all forest green; the invasion tanks are still in desert yellow - and all seems well until we stop to chat to the sheikh of the little mosque by the last gas station before Ramadi. There were three "Ali Baba" cars waiting to pounce on the motorists, he says. They crashed into a civilian car and sent it tumbling and spinning off the highway into the desert. We drive on at 180 kilometres an hour.

The radio - BBC Arabic service, Iranian radio in Arabic, anything rather than the one run by the occupation authorities - announces a settlement with Ayatollah Ali al-Sistani over the constitution. Iraq's leading Shia cleric doesn't want the Kurds to have a veto over the permanent constitution and wants more Shias on a five-person council.

Then a Shia on the governing council - everyone, of course, is handpicked by the Americans - speaks those words that always fill me with dread in the Middle East because they always turn out to be wrong. "We have reached an agreement," he said. "There is going to be very good news very soon." well, we shall see.

Baghdad is yellow and grey under a fierce wind and, with sinking heart, I see more walls. The massive concrete ramparts around Paul Bremer's consular headquarters, the hotels of westerners, of the "governing council", of every American barracks, are familiar. Now the government ministries are to be hidden behind concrete.

A vast new wall has been set up around the new ministry of higher education and scientific research. And woe betide those Iraqis, even women, who work for the Americans as translators and fail to heed the warnings about 'collaboration'. Three of them, all translators, ignored the threat. One, a Christian, was shot dead in her car in the Zeyouna quarter, a second wounded with her, their driver also shot dead.

I arrive at my dingy hotel and find that yet another translator is dead. He worked for an American newspaper and was driving home with his mother and two-year-old daughter when gunmen with silencers stopped the car and coldly shot all three of them, even the little girl.

Then news comes that the man's car had twice been damaged with warning shots in previous days. There's a rumour that this is a revenge killing. Otherwise, why kill the little girl? So while we are outraged at the murders, we all secretly and cruelly hope its revenge - not a "collaborator" killing - that has contaminated our hotel.

I lean over my balcony and watch four miserable Iraqis from the "civil defence" patrolling the road below They have ill-fitting uniforms, two are in the old kitty-litter camouflage blouses that the Americans used in the desert a quarter of a century ago. One of them is lame. They cradle their rifles and the last man, the lame one, is walking backwards and staring at the rooftops.

Groceries in Karada Kharaj, to a vast emporium crammed with the new Iraqi rich, middle class, of course; the poor can't afford this place. There is fresh Danish butter and cheese, Austrian fruit juice, Perrier by the gallon, Jordanian bottled water. And then there are the cigars. Churchills at a quarter of the price on a European duty free, Cohibas at less than a third of their cost.

Is this part of the untaxed imports with which the occupation authorities are trying to encourage the economy? Or part of the loot from the stores of Saddam and his dead son Oudai? In the evening, gunfire ripples across Jadriya, near the university: I hear it popping away as I write this, and two American helicopters are thundering up in the darkness. I sit and listen to this unreported battle, glad I didn't buy a bar of chocolate at the grocery store. -(c) The Independent.

Kerry looks 'French'

Struggling to find the worst thing he could say about Democratic Senator John Kerry, a senior member of the Bush administration proclaimed last year, 'he looks so...so...French!'

By 'French,' he meant well educated, articulate, dignified, sophisticated, worldly - everything that President George W. Bush, who likes to play tough Texas Ranger, is not.

However, being educated and sophisticated is not a political asset in America's heartland: here in the midwest, the mountain states, and the south, where George Bush is venerated with the kind of mindless adulation North Koreans shower on their 'Beloved Leader,' Kim Jong-il.

The United States is unique among advanced nations in demanding wealthy career politicians running for high office pretend they are simple working-class fellows. Members of the Soviet ruling elite, who secretly lived like Turkish pashas, also used to claim they were simple factory workers fulfilling their civic duty to the Motherland.

Last week's 'Super Tuesday' primaries in agricultural Wisconsin and nine other states confirmed that this fall, the 'Frenchman,' Senator John Kerry, will be the Democratic Party candidate to oppose George W. Bush of Crawford, Texas.

From Mexico City to Multan, people are asking, if Kerry were to win the election, how would his foreign policies differ from the Bush administration, which Kerry charges 'has run the most inept, reckless, arrogant and ideological foreign policy in the modern history of our country.'

Kerry's charge is absolutely correct. But remember, when Bush was running for president, he promised a 'humble' foreign policy that would be 'low-key' and avoid foreign entanglements. At the time, Bush showed himself shockingly ignorant of foreign affairs, and did not even know the name of Pakistan's leader.

But once in office, the Bush administration immediately embarked on plans to invade Afghanistan and Iraq, and subjugate Pakistan - well before 9/11. It adopted a confrontational policy with Europe, a major arms buildup, and threw total US support behind Israel's rightwing leader, Ariel Sharon.

US Vice President Dick Cheney, formerly viewed as a cautious moderate, revealed himself to be an extreme rightist who packed the administration's security and foreign policy ranks with fellow extremists and Greater Israel ideologues.

Kerry may be counted on to return the US to its pre-Bush foreign policy, beginning by improving relations with Europe's core nations, France and Germany. To the horror of Bush's supporters, the Boston senator reportedly speaks...French.

Senator Kerry calls for more cooperation with the UN and other world bodies. He vows to end the Bush administration's militarization of US foreign policy and its aggressive behaviour towards nations that fail to comply with the White House's diktat.

Kerry supports the Kyoto environmental treaty, though Congress will be unlikely to ever accept it in its present form. The Boston senator says we will continue the so-called 'war on terror,' though his views on Pakistan are so far unclear.

But if elected, Kerry will face powerful institutional forces opposed to any change in policy direction, particularly in the Mideast and South Asia, Washington's biggest foreign policy headaches.

Bush and his pro-Israel mentors blundered the US into twin hornet's nests in Afghanistan and Iraq. It's unlikely Washington will be able to fully impose its political will on either nation, given growing armed resistance and civil chaos. These neo-colonial misadventures are costing over $6 billion monthly and tie down almost half the US army.

Any efforts to withdraw from these fiascos will produce storms of protests from pro-Israel forces about 'loss of credibility' and 'abetting terrorism.' The military-industrial-petroleum complex, which benefits greatly from these wars and Bush's reckless military spending, will strain every sinew to keep US forces engaged abroad. -Copyright Eric S. Margolis 2004.