The government’s measures to incentivise industry, particularly the decision to forego any charge for additional power used by them from November this year to June 2021, have been very rightly welcomed by all quarters. There will be no better time than the present to do whatever can be done to breathe some sort of life into the industrial sector. That would provide jobs, make us self-sufficient in production of all sorts of goods and, best of all, add to our export receipts. Right now Pakistan has an edge of sorts over regional countries only because of the progress it made in containing the coronavirus when the first wave hit Asia particularly hard. And now, even though the second wave threatens to reverse much of the gains, the economy is still running and the opportunity to grab fresh export markets should not go begging.
But there is something to be said about the type of incentives being offered. Sure, nothing has held industry down like abnormally high input costs, driven by things just like high electricity prices, so the three-quarter or so of a breather should go some way in helping producers, particularly among small and medium enterprises. Yet somebody will have to give some thought to what might happen when the government, eventually, agrees with the IMF and increases electricity prices for all consumers and also rolls out another mini-budget to raise taxes. Even if good parts of the industry continue to get cheaper electricity till the middle of next year, the drag on consumer demand will be telling, especially as cost-push inflation makes a high unemployment environment even worse.
All this is not to say that the incentives are not well meant or will not work at all. These are important baby steps yet it is important to understand and accept that they are just that – baby steps. Giving them more importance than they deserve can in fact prove counter-productive even in the immediate term if the government becomes complacent. The best thing to do is to identify yet more areas where government intervention can help stimulate industry to produce, export and earn more. There is also a very urgent need to control prices, especially in the food basket, because stimulus packages, even when targeted, tend to achieve precious little when there is an overall tendency for prices to rise. Clearly the government needs to be active on multiple economic fronts at the same time.
Afghan violence up 50pc
US Special Envoy Zalmay Khalilzad was right to warn, in discussions with the Pakistani military leadership just a few days ago, that the way violence is on the rise in Afghanistan it would not be a surprise at all if the talks actually collapsed. According to a US watchdog, which is monitoring all sorts of activity on the ground as the war winds down, violent attacks in the country have increased by about 50 percent since the intra-Afghan dialogue began. The way the two temporary ceasefires worked so nicely over the summer, it was hoped that a similar approach would be adopted to increase the chances of success of the talks.
Unfortunately nobody seems to have taken into account all the foul play that the so called Islamic State (IS) can whip up. Most of the attacks, especially the unspeakable attack at Kabul University just last week, have been carried out by this out-of-control militia that was run out of the Middle East but has fond a very willing patron in India, which facilitated, trained and armed it to keep up its bad work in South Asia. But the way this nexus has succeeded in increasing the number of attacks, even as the principle warring parties look to tone it down, speaks volumes about just how everybody has been looking in the wrong direction. For, the talks would achieve nothing at all really if the country returns to terrible fighting of the past while everybody is sitting comfortable in Doha and trying to hammer out a deal.
So far, only the Taliban have confronted this menace on the ground. That they were able to do so while also fighting the Afghan National Army and the Americans, and still record very impressive advances on the ground, says something about their ability to tame even the most fearsome opponents and also explains why the Americans finally turned to talks. Now everybody is going to have to join forces and tackle the IS threat before it causes more damage than can be ignored. A 50 percent spike in violence is no small matter. Unless authorities give it the attention it demands, they will have themselves to blame for letting bad guys steal the show and spoil the peace.
