2014-03-05
THE days of American pullout from Afghanistan are near. With the exit from next door, a similar emptying is expected in Pakistan: the American turning away is likely to mean an end to the aid economies burgeoning in Islamabad and Kabul. The restaurants that have catered only to foreigners, the landlords who own property in guarded sectors, and the myriad other forms of price-inflated businesses that emerge with war, and with the relief and aid work that surround it, will similarly conclude.
This problem with aid and the world it creates in the societies that it is supposed to assist — the calamitous consequences of the aid-borne relationships of dependence — has been much discussed in recent years. The conclusion of the debates is an expected one: aid, economic or otherwise, does little to help the countries where it is directed. When strategic interests of aid-granting countries divert to other portions of the world, when the pain of one catastrophe-struck area is overtaken by another, projects die on stems, unable to be sustained by the societies they were designed to help.
The complicated case of the Pakistan-US relationship is unsurprisingly similar. The past decade has seen all sorts of efforts to “help” Pakistan. From school projects to women’s aid shelters to rural development initiatives, millions of dollars have been poured into Pakistan’s NGOs and civil society initiatives. Whether it was education they were promoting or sports or literature or anything else, they have failed to birth either the goodwill or the good consequences that both the donors and the recipients hoped for. In the sad saga of aid, the Pakistan-US story had nothing new to offer.
If aid is the overused portion of attempts at alliance, trade is the underfed one. The consequences of this malnutrition are significant and, unlike the malignancies of aid-borne dependence, quite specific. In 2010, before the relationship between the US and Pakistan had soured to its current petulant state, the US Congress approved several billion dollars in aid to Pakistan but remained unwilling to scale back the half a billion dollars in trade tariffs paid by Pakistani exporters. In the years since, little has changed. While aid has rained down, no special incentives have been provided to Pakistani manufacturers and exporters that would allow them an edge in the global marketplace.
The neglect is a tragedy; it ignores the most promising aspect of true transformation. Pakistan is currently the world’s fifth largest producer of cotton. The US is the world’s largest consumer of cotton, with individual consumption standing at 36-37lb per person; the world average is 29lb. According to a governmental economic survey, Pakistan’s textile and garment industry employs 38pc of the country’s industrial labour force and constitutes 46pc of its manufacturing base, consequently generating 54pc of its export income and close to 8.5pc of its gross domestic product.
The numbers provide a recipe for radically transforming Pakistan. If the US would implement a Free Trade Agreement with Pakistan, making it a preferential provider of cotton textile and garment manufacturing, it would radically transform the country and its economy. Investment in Pakistan’s textile and garment manufacturing infrastructure would have the potential to create millions of jobs and create a new middle class borne of the boom. The talent, the knowledge, and the raw material all exist. According to numbers shared at the recent China and Asia Textile Forum held in Beijing, Pakistan is already ninth in the world in exporting garments and textiles. Furthermore, according to the Pakistan Readymade Garment Manufacturers and Exporters Association, Pakistan ranks third among Asian countries in spinning capacity and fifth overall in the world. The potential framework for a cloth-borne revolution is thus already there, providing all the necessary ingredients for the sort of change that dribbles of aid could never hope for.
A Pakistan given the trade and tariff incentives that would allow it to become a major supplier in the market would be a Pakistan transformed, where the future — and modernity — would be embraced not on the backs of aid-borne artifice but on trade-borne truth.
The idea is not a novel one. Last year the European Union’s Generalised System of Preferences Scheme selected Pakistan to be the recipient of concessions in export duties of 6,000 tariff lines to the European Union. Leading among these goods are Pakistani home textiles such as bed linens, towels, table linen, and kitchen linen, as well as hosiery and textile garments. Previously, Pakistan was required to pay a tariff of up to 9.6pc on these goods. All have been slashed to zero beginning Jan 1, 2014, vastly increasing Pakistan’s competitiveness in the EU.
If hoping for a Free Trade Agreement with the US is aiming too high and hoping too much, perhaps an EU-inspired slash in export tariffs is a more achievable demand. Currently, Bangladesh, Vietnam, and Cambodia enjoy better export tariff rates in the US than Pakistan. In those countries, the jobs created by the export boom are transforming local economies, allowing women to enter the workplace and connecting their populations to a global marketplace.
The hope for better futures, one made of towels and T-shirts, can galvanise a different direction in Pakistan. With its ability to employ, it can foment a trade-borne transformation and produce a local and organic groundswell away from the backwardness of terror and towards the progress of the future.
The writer is an attorney teaching constitutional law and political philosophy.
rafia.zakaria@gmail.com
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