Arms for Taiwan
JUST as the Western effort to oust Russia from Ukraine has within it the seeds of a much bigger conflict in Europe, America’s constant brinkmanship where the China-Taiwan question is concerned could spark the next great conflict in Asia. While Washington speaks of protecting ‘democracy’ by aiding the self-ruling island — which the People’s Republic considers its inseparable part — the fact is that military aid and sales to Taiwan, as well as the strengthening of anti-Beijing alliances such as the Quad and AUKUS, give the impression that the US is trying to contain China in the Asia-Pacific. The latest US arms sales to Taiwan only strengthen this impression. While Washington has long sold arms to Taipei, and is, in fact, bound by US law to support Taiwan’s defence, the recent decision to supply arms under the Foreign Military Financing scheme has raised eyebrows, particularly in Beijing. This is because the aforesaid programme is usually used to provide weapons to sovereign states, which Taiwan is not, as the majority of the international community recognises only China. The State Department says the US “has an abiding interest in peace and stability in the Taiwan Strait”, though Beijing clearly disagrees. The Chinese foreign ministry’s spokesperson said that the arms sale “undermines China’s sovereignty and security interests”.
The US seems to be sending mixed signals to China. While senior American officials have been visiting Beijing over the past few months to discuss differences, the Biden administration continues to disregard China’s reservations and maintain strong links with Taiwan. The problem with this mixed messaging is that it can very rapidly lead to misunderstandings, and result in hostilities. Neither side may want war, but if the US continues to prod Beijing on Taiwan to gauge its reaction, it could result in unintended — and unfortunate — consequences. The Taiwan question should be resolved amicably between Beijing and Taipei, and external actors should stop fanning the flames.
Published in Dawn, September 4th, 2023
A senseless wait
THE claim by PML-N’s Maryam Nawaz that her father Nawaz Sharif will “end inflation” when he comes to Pakistan leads to the obvious question: why is the elder Mr Sharif still in London? As chief organiser, Ms Nawaz made this statement to a crowd of young party workers in KP, with the obvious intention of giving the party’s support base hope that the PML-N supremo will return to the country. But it is hardly a sensible statement to make, considering there has never been any official explanation for Mr Sharif’s prolonged stay in a foreign country for so many years. His absence is especially puzzling now when the cost-of-living crisis in the country is dire and affecting voters on whom his party has pinned its electoral hopes. Although he had gone abroad on the pretext of medical complications that arose during his incarceration, it is evident that Mr Sharif seems to have made a good recovery and is reasonably healthy now — certainly enough to be able to travel. Over the past year, he has visited Saudi Arabia, the UAE and several cities in Europe for leisure and other matters. Surely, he is fit enough to travel to Pakistan — and should do so if he wishes to remain politically relevant, even at the cost of confronting legal challenges on his return. Instead, though the party’s key decision-maker, he continues to live in London, where key members of the PML-N party rush at the drop of a hat to seek his guidance or blessings. It is an absolutely ridiculous state of affairs, and one that the already dejected voter will remember when election time approaches.
If, as Ms Nawaz avers, Mr Sharif is able to “end inflation”, his stay in London is even more indefensible. His party members claim that he has ability to fix Pakistan’s challenges if given a chance, but are unable to explain why their leader does not return to the country to engage with potential voters as they are crushed under soaring electricity bills, fuel prices and food inflation. A new date of mid-October has been floated by his brother for his return, but because the senior Sharif has never really revealed why he has taken so long to come back, no one is holding their breath for the Oct 15 deadline to become a reality.
Published in Dawn, September 4th, 2023
Stymied growth
A NEW report, published by the Pakistan Institute of Development Economics, shines a light on the multiple obstacles hampering the growth of the country’s fledgling engineering industry — and, by default, its small and medium enterprises.
The study, based on a survey of 328 engineering firms, apparently operating in the SME sector, points out unreliable electricity supply, lack of access to formal bank credit, exclusion from global supply chains, branding, pricing, product quality, informality, etc, as major factors affecting the growth and productivity of such enterprises.
These issues are faced by SMEs in every sector. The report underlines that a majority of industrial units — 83pc — in the country do not have plans for future expansion, owing primarily to the non-availability of electricity.
A few entrepreneurs, however, intend to invest in technology, machinery, land, and skilled labour to boost their business prospects. Likewise, the lack of access to credit for most of these firms, owing to inadequate collateral, is highlighted as another major snag in the realisation of their potential.
The report underscores the significance of addressing these challenges, recommending that the engineering firms adopt international and national quality standards.
The study also emphasises the importance of strong ties between businesses and the government, adding that political instability and unfavourable economic policies have led to mistrust and dissatisfaction among business owners.
SMEs, especially in the engineering sector, are globally regarded as the backbone of economies. Their crucial role in fostering growth, creating large-scale employment opportunities and reducing poverty is universally recognised.
Hence, successive governments here have repeatedly pledged to boost the ‘ease of doing business’ for them since the 1990s so that they can help boost overall economic growth.
However, practically speaking, little has been done to solve their problems. For example, the SME policy of 2021-25, which was widely welcomed because of its generous incentives, such as tax reductions and a Rs60bn bank credit line for collateral-free loans offered to small and medium entrepreneurs, is yet to be implemented.
Already faced with formidable challenges, SMEs are believed to have been affected the most by the ongoing economic slowdown and surging inflation.
Numerous units have already closed down because of financial troubles caused by increased costs, and thousands of workers have been fired by others to minimise losses as industries struggle to survive the present crisis.
The crisis has especially hit units operating in the domestic market. The ones linked to global export markets, directly or indirectly, have fared better, despite the difficulties.
For long-term economic stability, more exports and greater job creation for millions of individuals entering the labour market each year, Pakistan’s policymakers need to immediately focus on addressing the long-standing issues holding SMEs back from realising their full potential.
Published in Dawn, September 4th, 2023