The Generalised Scheme of Preferences (GSP) plus status granted by the International Trade Committee of European Union Parliament in its majority vote last month is a great achievement of the present government. This facility will create better and wider opportunities for Pakistan exporters as well as improve country’s overall economy. These views were expressed by Minister of State for Commerce, Trade and Privatization Khurram Dastgir in an exclusive interview with the Centreline and Diplomatic News Agency. The details of the interview are covered in the Q & A.
Q. How GSP Plus will benefit Pakistani exports?
A. Naturally this trade facility and status provided by the EU Parliament to Pakistan has multiple benefits. The special trade preference will provide an easy access to Pakistani products to the European markets. The textile products will have duty free or preferential duty rate to the EU countries. Pakistan will get extra one billion dollar by adding to the present volume of exports. Increase in exports will create opportunities for the fresh investment and jobs in textile sector.
The economic activities will get fresh oxygen and the terrorism-hit masses will have a hope for the better future.
Q. Was it a difficult task for the government to convince the EU?
A. Let me explain that under the great leadership of the Prime Minister of Pakistan Muhammad Nawaz Sharif, the government team was seriously pursuing the case. The ministries of Commerce and Foreign Affairs jointly launched the process of economy diplomacy educating and convincing the European states regarding our right and need for the GSP Plus status. I myself have visited a number of European countries holding in-depth discussions with my counterparts and foreign ministers telling them that this status will not affect their local industries. The Governor Punjab Muhammad Sarwar has also played an important role for lobbying our case. It was collective effort and the government is proud of its achievement.
Q. Is it correct that GSP Plus would be operational from the January 1, 2014?
A. Yes, the legal and legislative process would be completed by mid of December this year and the impletion will start form the date that you have mentioned.
Q. What would you advise to the exporters for getting maximum benefit of this facility?
A. It is the primary duty of the government to facilitate the business community. The government has done its job, now the investors and exporters have to demonstrate their seriousness and maturity benefiting from the GSP Plus. They have to change their business methodology and traditional approach by introducing modern skills. The business community has to follow the knowledge based economic techniques. They have to introduce real value addition and strictly producing the quality products so that they could easily compete with the other countries. Quality of products should not be compromised at any cast.
Q. Is the government considering Most Favoured Nation status for the India?
A. The government has no plan of providing MFN status to the India for the time being. The reason is very obvious that unfortunately there is no progress on the political front between the two countries. As long as India is concerned the economy and politics go together. Until India shows seriousness for resolving all outstanding issues including the Kashmir, the progress on MFN is not possible. However, Pakistan will eventually offer Non-Discriminatory Access (NDA) to India after it has new government in New Delhi next year. The Prime Minister of Pakistan wants to have trade relations with India but not in isolation to the other burning issues between the two nations. After all we are an elected government and the PM has to show to the public that how the Indians are responding to our positive signals.
Q. What’s the government plans about the privatization process?
A. As the media knows that privatization is the part of PML (N) manifesto and government’s overall economic reform agenda. Therefore, the government will timely complete the privatization of various state entities according to the prescribed rules and regulations. Several state owned enterprises are bleeding due to mismanagement, corruption and inefficiencies and as a result the national exchequer losses Rs. 500 billion every year. Pakistan International Airlines need Rs.3 billion every month and it has Rs. 250 billion accumulated losses. Similarly, Pakistan Steel Mills get Rs. 3 billion from the government on monthly basis and it has Rs. 108 billion accumulated losses, so how long the government will support them? The same amount of Rs. 500 billion could be saved for the education, health, construction of roads and dams, and infrastructure development. The government is very much clear to follow a privatization policy to bring new investment and improve the financial and technical conditions of the various institutions. It has been decided that only 26 per cent of the shares would be offered to the potential investors with management control while 74 per cent shares would be retained by the government itself.
Q. How the government would ensure transparency in the process?
A. The government actions would speak themselves, but again, we should not forget that there is a comprehensive transparent mechanism which has to be followed in every transaction. The Cabinet Committee on Privatization, Privatization Commission Board which would be an independent entity and the Parliament would scrutinize every transaction. The public through the media would judge our decisions and actions. The questions were raised about the past privatization transactions, however, the government would make it sure that this time no loophole is being left.
Q. PTCL has not paid 800 million dollar to the government, what about that amount?
A. There were certain land/property issues which needed to be settled between the company and the government. This government is seriously pursuing them so that commitment made at the time of privatization by the then government should be honored accordingly. We hope that the matter would be resolved soon.
Q. How many Public Enterprises would be privatized?
A. The Council of Common Interest has approved 65 entities; however, in the first phase the government is going to privatize 12. The process of privatization of those 12 would be completed in a year time starting from December 2013.
The writer is a senor TV anchor and Consulting Editor of DNA and Centreline.