At a time when practically all senior politicians, whether in or out of government, are preoccupied with mudslinging and badmouthing, the federal minister for science and technology has been busy doing some very constructive work indeed. That is not to say, of course, that he doesn’t engage in the odd slugfest with an opposition member as well, but there has been a very visible change in his attitude towards his work ever since he was moved from the information ministry to science and technology. He tried to push the country into the 21st century a little earlier by using technology to predict the lunar cycle, even at the cost of attracting more than a little anger from the extremely religious community, and every now and then he comes out with something that proves he’s been busy all the time.
The coronavirus pandemic also seems to have made him bat on the front foot, and slowly but surely he’s made sure that the country becomes self-sufficient in the production of some of the more important medical equipment and machinery. That is why it is very good news indeed that, as the minister announced over the weekend, Pakistan is already well on its way to achieving import replacement of $1.4 billion. It turns out that the government has planned a medical city and the production of medical equipment and electromagnetic instruments is also expected soon. The ministry has already signed a Memorandum of Understanding (MoU) with the Faisalabad Industrial Estate Development and Management Company (FIEDMC), which will establish the Allama Iqbal Special Economic Zone (SEZ) along with a medical city of 200 acres in Faisalabad.
And it is very smart thinking to make the SEZ tax-free for 10 years and rule out customs duty on any import of machinery. Such incentives are exactly what such innovative ideas and initiatives need to get a good start. If the whole thing can be set up rather quickly, and the process of importing and setting up of machinery can be completed in six to eight months, then we’ll have a complete turnaround in the sector before anybody knows it. And what makes this all the more pleasant is that all this is the result of one man’s initiative. The prime minister is always keen to promote accomplishments even more than talent in his cabinet. Surely the minister for science and technology makes a good case for a promotion up the batting order.
Market losing steam?
Should Pakistani investors an authorities alike fear for the country’s equity market? After becoming the best performing bourse in Asia for a second time and number-four all over the world, has the time really come for our market to take a dive and spook all the foreign investors that were rushing to it after the good news? Going by the last few days it seems that as markets all over the world are tumbling Pakistan’s might not be an exception any longer. The main reason for the international decline is the rising number of coronavirus cases and indeed a confirmed second wave of the virus in much of North America and the European continent.
Another very important reason is that central banks seem to have run out of ammunition when it comes to yet more stimuli to keep markets properly lubricated. So far the world has been treated to an epic, historic decoupling between capital markets and the real global economy because central bankers have not let the markets worry ever since the beginning of the pandemic and through the lockdowns. But now, after cutting interest rates as much as they could and throwing as much money into the markets as possible, they simply have nothing more to offer and investors have come to understand that there might not be a silver bullet down the road.
In the United States the problem is made worse by the deadlock between the Democrats and Republicans over another possible relief package that would soothe the markets to an extent and also the fact that most investors have begun pricing in election risk and volatility. These things have rattled markets across the world and Pakistan seems no exception for the time being. So far the country has been luckier than most others in terms of controlling the spread of the coronavirus and this success has been greatly aided by a galloping stock market that kept investors happy and the country looking good. Hopefully the downtrend of the past week was just a correction in an otherwise strong uptrend that began months ago and soon everybody would get back to their earning ways. But if the market has indeed run out of gas, then there is much more trauma down the road.
