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NTDCL boosting up the power in-frastructure Page 02

Monday, 05 March, 2012

LAHORE

IMRAN ADNAN

AFTER Pakistan’s decision to awardmost favoured nation (MFN) status toIndia by December 31st, businessmenand traders of Indian Punjab are anx-

iously waiting to get transit access to Afghanistanand entire Central Asia through Pakistan. Indo-Pak trade experts point out that India had recentlyinitiated talks to get land route access throughPakistan, Afghanistan, Iran, Central Asian Re-publics (CARs) and Caucasian sea and three coun-tries having already signed agreements. Countriesexcept Pakistan and Afghanistan had alreadystarted a process to tie several loose ends relatedinterconnectivity and customs, they underscored.They states that Indian Punjab businessmen be-lieve that if these routes become operational, Pun-jab would again emerge as manufacturing hubfor heavy machines, tools, pharmaceuticals, agri-culture implements and textiles. It would help re-viving Indian Punjab hosiery industry thatcompromised its share after free trade agree-ments with Sri Lanka in early 1980s andBangladesh recently. They estimate that currenttrade between the two countries might touch$15-16 billion, if figures of legal, illegal and tradevia Dubai or other countries are accumulated.They believe that non-tariff barriers (NTBs) onboth sides of the border are main obstacles in lib-eralising trade between the two neighbours.

Experts point out that refusal of tradethrough land route is one example as out of1,963 tariff lines only 14 items are allowed to

cross border through land route. Only this bar-rier increases the cost of freight by over 233 percent. Despite inefficient infrastructure at Cus-toms Stations at Wagha Border, a 20-foot con-tainer crosses border through land route at $300whereas the same costs more than $1,000 if di-verted through sea route, they estimate. A ce-ment exporter discloses that Pakistani cementhas huge demand in Indian markets due to itspremium quality. But, Pakistani exporters arefacing great difficulty in enhancing cement ex-ports with India. Not only Indian port authori-ties but also Indian bureaucracy and cementindustry is creating hurdles in the way of Pak-istani exports. He lamented that Pakistani ex-porters had to bribe Indian Railways officialsand contractors to get their wagons unloaded.

In a recent conference, Professor SajalMathur from Delhi-based Centre for WTOStudies indicated that transit route was one ofthe components of the WTO-mandated MFNstatus to all the countries, but in case of Indiaand Pakistan both countries were looking to-wards transit access with fingers crossed.However, it might not be mandatory for bothcountries and Afghanistan as it was not amember of WTO. Indian business communitybelieves that if transit route is allowed, IndianPunjab will get back its pre-partition glory asnot only Indian Punjab would become indus-trial hub but also it will get higher revenue re-ceipts, promotion of trade and evenmanufacturing to feed Pakistan, Afghanistanand Central Asian States, which are witnessinga double-digit growth.

REUtERS

THE euro shouldnot exist. In a per-fect world (run byeconomists) the

euro would never havebeen created. Sadly, how-ever, the world is not per-fect — and it is run bypoliticians. The result is anentirely dysfunctional mon-etary union.

The Spanish economyhas youth unemploymentapproaching 50 per cent.The Greek economy is inits fourth consecutive yearof negative GDP growthand will embark on a fifthyear of negative growthlater in 2012. Euro areacountries have to share acommon interest rate anda common exchange ratewith Germany — whereunemployment is at a 20-year low and growth ispositive if unspectaculararound 2.5 per cent. Thisis an unworkable situation— what Greece needs isvery different from whatGermany needs.

Will the euro break up?We must hope not. Theconsequences would bedevastating. The social un-rest we have today is minorcompared to what couldtake place if the euro wereto fragment. As the eurowas essentially a politicalcreation, it must be politi-cal will that keeps it to-

gether — and it would bewrong to underestimatethat political will.

So what will happen?Because so much rests onpolitical decision making,the path for the euro area ishard to determine. But itseems highly likely thatthere will be a recession thisyear. How bad that reces-sion is depends on whathappens to the banking sec-tor. Euro area banks are in-creasingly reluctant to lendmoney — and with all therisks that they have beenthrough over the last sixmonths, this is hardly a sur-prise. Slower bank lendinggrowth will hit someeconomies particularly hard.

Fiscal austerity is beingurged by Germany. In thewake of France’s down-grade (and with the UKoutside the euro and un-likely to ever join) it is Ger-many’s voice that is loudestin setting the euro policyagenda. When the slowingcredit creation is combinedwith further fiscal austerity,the consequence is likely tobe negative GDP growth.Not all countries will benegative, of course, butItaly, France and Spain allseem likely to see a drop ineconomic activity.

So why do the convul-sions of the euro area mat-ter to Asia? There are threereasons why Asian compa-nies and investors need tofollow the Euro drama.

The euro bloc is thesecond largest economy inthe world. Over a third ofAPEC’s exports go to theeuro bloc, making it thesecond most importantmarket for Asia after theUnited States. If the euroarea is to have a recession,falling demand, followed bypoor growth, slow demand,then Asia needs to adjustits growth model accord-ingly. Of course, Asian de-pendence on export-ledgrowth has faded in thewake of the global financialcrisis, but there can be nocomplacency about exportsto the Euro area.

Euro financial institu-tions have been involved inthe global economy fordecades. Global trade, inparticular Asian trade, hasbeen financed by euro areabanks. As euro banks re-trench and the importanceof the home market is em-phasised, Asia will have tolook elsewhere for funding.That is not to say that alter-native sources are impossi-ble to find — clearly, theyare not. But it means thatAsia must change.

Similarly, the euro areaas a globally integratedmarket will have an impacton other economies in theworld. The euro bloc is over20 per cent of US exportsoutside of the NAFTA tradebloc. The US may not be anexport-led economy, butthere is potentially an im-

pact from a euro area slow-down on US growth, whichin turn has implications forAsia. In a globalised worldeconomy with a complexweb of trade and financiallinks, what happens inAthens can clearly haveglobal ramifications.

The wealth of the euroarea can be discovered insurprising places (Italy, forinstance, is a wealthiercountry than is Germany).Overall, the euro area iswealthy. Thus, the euroarea has a role as an in-vestor in the rest of theworld. The political pres-sure on euro area banksand financial institutions toconcentrate their invest-ment efforts in their homemarkets is increasing. Pop-ular hostility to overseas in-vestment by multinationalcompanies has also in-creased. Investment fromthe euro area into Asianstock markets, bonds andcompanies may well slow inthe years ahead.

The euro area is an eco-nomic mess — but it is amess that the rest of theworld must pay attentionto. The slow growth thatwill accompany euro areareform and the changingrelationship between theeuro area and the rest ofthe world will be critical toglobal economics. Nowmight be a good time tostart taking an interest ineuro politics.

Indian traders await CentralAsian access after MFN grant

What the euromeans for Asia

KUNWAR KHULDUNE SHAHID

My word, are we showcasingsome guts in the Iran-Pakistan pipeline episode!Hina Rabbani Khar’s

riposte to Hillary Clinton’s ‘threats’ overthe IP project was not only valiant sheeven made it sound realistic. Last weekthe US hierarchy – in a class ROFLmoment – labeled the IP pipeline as a“bad idea”. And this week they are toutingIran as an “unreliable partner”…the sheerirony is painfully amusing. The USlecturing about the reliability of partnersis like Lucas Papademos giving a tutorialon controlling debt crises or Veena Malikgiving instructions on wearing hijaabs.So what is your idea of a reliable partnerMrs Clinton? Someone who doesn’t givea rabbit about your energy shortage?One who can’t stop meddling in yourinternal affairs and wants you to alignyourself dutifully to its policies even ifit’s bound to be detrimental for yourown self? Or someone who killsinnocent soldiers and civilians and then

doesn’t bother to do as much asapologise, for courtesy’s sake? Of theintriguing (read comical) verbiageserved up by the US Secretary of Stateone particular statement stood out. “Aswe are ratcheting up pressure on Iran, itseems somewhat inexplicable thatPakistan would be trying to negotiate apipeline,” Hillary Clinton said. WithPakistan finding itself in a deep hole asfar as the energy predicament isconcerned, fulfilling half of its energyneeds via gas and running out ofchannels to quench the need of theaforementioned gas, is it really that‘inexplicable’ Mrs Clinton that Pakistanwould want to negotiate a pipeline witha neighbouring country that it hasfriendly terms with? Plus, thealternative that you’ve been giving us,the TAPI (Turkmenistan AfghanistanPakistan India) pipeline has taken anosedive into oblivion, primarilybecause a certain country has ensuredthat the A in TAPI borders on a war-tornfragile zone and definitely no way nearthe periphery of safety. The US has also been apparently mulling

over throwing in sanctions over the IPproject. This looks clearly an act offrustration, especially after other Asiancountries – including chums India andSouth Korea – have paid no heed to theIranian sanctions. Although the Americanmedia is touting the rebuttal on sanctionsas merely ‘tough talk’ meant for therespective publics, and that inreality the countries are taking amore conciliatory path. Theyflaunt the fact that India hasostensibly begun tolook for alternativeoil from SaudiArabia and Iraqas thevindication.Either way whatis unquestionableis that barring theEuropean Union that would begin itsembargo in July, not many are payingmuch heed to the US threats. And hence,gradually all their policies that arecustomarily touted by Washington as inthe ‘best interest of the world’, aregradually falling within the ‘because I

say so’jurisdiction. Allthe noise thatthe US has beenmaking over the

past couple ofmonths, especially

with regards to Iran,both on the IP front and globally smacksof the aggravation of that bully who just

can’tstand the fact

that he is notbeing listened to,

and that his‘subordinates’

have the audacityto choose logic and

self-interest in lieu of followingthe guidelines. And when onecomes to think of the debateof the reliability of partners;the most important façade isthe fact that if you have your

own bases covered and givethe national interests their due priorityand do not compromise on sovereignty,the reliability of partners becomes amoot question.

The writer is Sub-Editor, PakistanToday. He can be reached atkhulduneshahid@gmail.com

Pipeline politics and unreliable partnersg It is ironic that it’s the US, of all nations, that is giving us a tutorial on reliability of partners

PRO 5-03-2012_Layout 1 3/5/2012 12:31 AM Page 1

debate02Monday, 05 March, 2012

SHAUKAt ALI

NatioNal transmission

and Despatch Company

limited (NtDCl), a

state owned entity is

mandated to transport power from

generation units to load centres

across the country, thus manages

one of the largest transmission

networks in the world. one of its

main responsibilities is to

evacuate electricity generated

from hydropower plants located in

the north and thermal power

plants located mostly in the south

of the country and transmit it to

various parts of the country.

the enormity of the task can be

gauged from the fact that

presently, 12 grid stations of

500kv having capacity of 14850

MVa and 26 sub-station of 220KV

with 15364MVa capacity and 5023

Kms of 500KV line and 7,319 Km of

220 Kv are being maintained and

operated by NtDCl. a recent study

conducted by Power Planning

department of NtDCl projects that

electricity demand will surge to

nearly 84,000 MW by 2030. to

meet the ever growing demand,

there is dire need to induct

additional power generation units

along with requisite grid stations

and associated transmission lines

to dispatch electricity to variety of

consumers. NtDCl has therefore,

chalked out an extensive power

development program to lay out

transmission lines and construct

Grid Stations to cater the ever

increasing future power

distribution needs of the country.

this programme is being funded by

various international Financial

institutions (iFis) including asian

Development Bank, aDB, JiCa,

World Bank, KfW Germany,

Eximbank of Korea and Economic

Development Bank of iran as well

as from own resources generated

by NtDCl. aDB has offered to meet

most of the financing needs of

NtDC through its Multi-tranche

Financing Facility (MFF) for

rehabilitation, augmentation and

expansion of transmission network

in Pakistan. in this connection, a

framework financing agreement

has been signed with aDB for $800

million to finance power

transmission enhancement

investment program in tranches.

tranche-1 for $220 Million and

tranche-ii for $226 million will be

utilised to construct 19 projects of

500 and 220 kv substations and

transmission lines. aDB plans to

financing 80 per cent of the total

project cost whereas the remaining

financing will be arranged by

NtDCl through its own resources.

tranche-ii comprising of nine

projects will also be financed by

aDB. lying of 500/220 kv

transmission systems, expansion

and up-gradation of National

Power Control Center is being

funded separately by JiCa. in

compliance with the present

democratic government’s

commitment of ensuring optimum

utilisation of all available resources

and create a balance between the

demand and supply of power.

NtDCl is expeditiously carrying

out work on the construction and

augmentation of grid stations and

associated transmission lines and

their early completion. this

urgency is necessitated due to

increase in power generation

through induction of new thermal

power plants and up-gradation of

the existing ones.

Work on following

projects is being completed on

fast track basis.

1- addition of 4th 220/132 KV 160

MVa transformer at 220 kV Grid

Station Sarfaraz Nagar falling

under the jurisdiction of lESCo.

2- addition of 4th 220/132 KV 160

MVa transformer at 220 kV Grid

Station in Jaranwala, Faisalabad.

3- 132 kV Muzaffarabad - Hattian

transmission line length

consisting length of 45.3 Km.

4- a 220 kV Dadu-Khuzdar

transmission System Project has

achieved an average progress of

around 76 per cent. this project

entails a 220kV D/C

transmission line with 274.27

km length from Dadu to Khuzdar,

a 220/132kV Grid Station

Khuzdar and 220kV Extension at

500kV Dadu Grid Station.

5- Extension of 500 kV Grid

Station Dadu New, (1x 450 MVa,

500/220 kV auto transformer

Bank and 1x160 MVa, 220/132 kV

auto transformers)

6- a 220 KV Rohri Substation and

associated transmission lines

which will disperse power from

iPPs Foundation Daharki and

Engro near Ghotki. 220 kV Rohri

New Grid Station and Extension at

existing 220 kV Grid Station

Shikarpur. this project also entails

a 62 km 220 KV Double Circuit

twin bundle transmission line

from 220 KV Rohri New Grid

Station to 220 KV Shikarpur Grid

Station, is also near to its

completion.

7- 220 kV Double Circuit twin

Bundle Dera Ghazi Khan – loralai

transmission line; this

transmission line will be connected

from DG Khan grid station to lora

lai grid station with total length of

85 km.

8- Ground breaking ceremony of

Rahim Yar Khan 500 kV Grid

Station and associated 500kV

transmission lines Project was

done by President of Pakistan in

2010. this project comprises of

two packages i.e Design, Supply,

installation, testing &

commissioning of 500/220/132

kV Grid Station Rahim Yar Khan

and in & out arrangement of

500kV Guddu-Multan 3rd Circuit at

Rahim Yar Khan Grid Station with

length of S/C = 26 Km and D/C =

17 Km. this vital project will be

completed at an estimated cost of

Rs 6108 million and funded by

JiCa.

9- a 220 kV aiS loralai Grid

Station comprises Design, Supply,

installation, testing &

commissioning based on 2x250

MVa, 220/132 kV auto

trasformers and 6x132 kV line

Bays is being constructed in

QESCo area.

10- to facilitate the import of 100

MW Power from iran to Gawadar,

a grid of 220/132 kv is being

setup at Gawadar and 75 km

transmission line to iran border.

the total cost of the project is

Euro 30 million, out of which 70

per cent funding is being provided

by iran and the rest of the fund is

being provided by NtDCl.

11- another major project being

undertaken by NtDCl is

construction of 500 kV D.G. Khan

Substation & associated

transmission line Project. it

encompasses two packages; in

Package-i Design, Supply,

installation testing and

commissioning of this

500/220/132 kV aiS Substation

at Dera Ghazi Khan and package-

ii entails construction of 33 km

500 kV Guddu-Multan Circuit-i in

& out transmission line at Dera

Ghazi Khan.

12- a project is also under

execution to connect the power

generated from wind to national

grid. 132 kV Double Circuit

transmission line in and out 132

kV Nooriabad-Jhampir

transmission line will connect

FCC & Zorlu Wind power project.

total length of 132kV

transmission line up to FCC Wind

Power is around 5.820 Km and

132kV t/line to be added from

FFC Wind Power to Zorlu Wind

Power which is 1.205 Km

approximately.

after the completion of these

projects, which is expected soon,

there will be marked

improvement in the voltage

profile and supply reliability of

the national grid. this would help

reduce line losses in lESCo,

FESCo, aJK, QESCo, SEPCo,

HESCo and MEPCo networks and

ensure availability of additional

quantum of electricity to

domestic, commercial and

particularly agricultural

consumers of Punjab, Balochistan

and Sindh.

NtDCl engineers and staff are

working with complete

dedication to improve

connectivity and early completion

of these projects of strategic

National importance. their

services are even more laudable

given the terrain and security

hazards along with extreme

weather conditions (scorching

heat of Sibbi and Jacobabad) that

they have to negotiate

continuously in turbulent, far-

flung and hard areas.

The writer is Assistant Manager

PR at NTDCL

NTDCL boosting up thepower infrastructure

Free trade adnauseam

JAgDISH BHAgWAtI

SO much has been written, by so many,against the muddled ideas that havenow overwhelmed good sense on trade

policy in the United States government thatone wonders whether there is anything left tosay. yet it is worth recalling what Pierre-Joseph Proudhon reportedly told the Russianintellectual Alexander Herzen: “And do youimagine that once a thing has been said, it isenough?....It has to be dinned into people, ithas to be repeated over and over again.” Whatwe need now is a primer on the majormisconceptions in the hope that, unlikeGresham’s Law, which says that bad moneydrives out good money, good economics willdrive out bad economics. Four, in particularneed to be corrected. The first misconception isthat exports create jobs, while imports do not –a fallacy that the great trade economist HarryJohnson traced to mercantilism, and which theUS has resurrected. In fact, in a world whereparts and components come from everywhere,interference with imports imperilscompetitiveness. The success of parcel-deliverycompanies, for example, depends on imports,which must be brought from the bordersinland, as well as on exports. Second, the credo“Trade, not aid” has given way to the mistakenbelief that trade matters less than foreignassistance. The labor constituency, ever fearfulof import competition, has undermined tradepolicy. It has also shifted aid policy indirections that assign priority to areas wherethe returns to US efforts are relativelyminuscule. Thus, the US State Department hasceased being an advocate of multilateral tradeliberalization, despite decades of massive gainsfrom the removal of trade barriers. Instead, itsaid arm, the US Agency for InternationalDevelopment, has now retreated into low-yieldprograms conceived as randomizedexperiments. That technique impresses BillGates, and the new USAID administrator,Rajiv Shah, has experience with it. But, even ifall such programs succeeded, their benefitswould not add up to a fraction of thedocumented gains that have accrued fromtrade and other macro-level policies in whichthe US has lost interest. Third, many believethat manufactures deserve preferentialsupport. This is practically the mantra of USPresident Barack Obama’s administration, andit has cost him the support not only of much ofthe economics profession, but also of ChristinaRomer, who chaired his Council of EconomicAdvisers. In a recent newspaper commentary,she refuted virtually all of the argumentsadvanced by manufacturing lobbyists forspecial treatment. Add to the critiques that ofNobel laureate Robert Solow, a staunchsupporter of Obama’s Democratic Party. Heagrees that there are activities that yield highersocial returns than private returns. Theproblem, he notes, is that neither he noranyone else can possibly know which ones theyare, whereas the lobbyists claim that theyknow this precisely. Proponents of a“manufacturing first” policy argue that“clusters” of businesses are more productivethan individual businesses are. But bigclustering effects are hard to find. Theeconomists Glenn Ellison and Edward Glaeserhave found that clustering is only marginallygreater than if businesses are allocatedrandomly. Besides, it is hard not to accept that,in the economist Frances Cairncross’s famouswords, we are increasingly seeing the “death ofdistance.” Finally, the financial sector hascome to be viewed as the bane of morality. In aworld of financial fraud and insider trading, itis easy enough to believe this, and to acceptthat the financial sector must be taxed. Butmorality cuts across sectors. There are plentyof honest people in all walks of life, and crooksas well. The quasi-Marxist view that ourmorality stems from our economic positionoverlooks the moralizing role of family,religion, culture, and art. Given thesemisconceptions, protectionism has re-emergedas a formidable foe. In 1999, when theministerial meeting of the World TradeOrganization erupted into bomb threats andmayhem, I asked then-Director-General MikeMoore whether we ought not to be prepared todie for the great cause of free trade. I shouldhave said: we ought at least to be prepared tolive for it. Between old and new muddle, andthe certain prospect that the demolition ofeach bad idea merely allows others to take rootand grow in its place, the task of the free traderis never finished.

A version of this article was first publishedin Project Syndicate

PRO 5-03-2012_Layout 1 3/5/2012 12:31 AM Page 2

RECENT events in Europe havebeen extremely instructive.Greece accounts for a very smallproportion of the main Europeaneconomy. It comprises but a cou-

ple of percentage points of continental GDP.yet its debt debacle has had the entire conti-nent strung in an awkward position for a goodtwo years now. Germany and France, the twobiggest EU economies, have thrown in all butthe kitchen sink to keep the debt ridden coun-try from defaulting.

What is more, the bailout package justagreed has all but turned the bond market on its

head. Ironically, the ECB is savedfrom the painful haircut all other‘old’ bondholders have been madeto take. Why such desperation?Why must Greece be kept fromdefaulting, which is what ordinar-ily happens when a country is un-able to meet debt obligations?

The reasoning is pretty simple.The minute Greece defaults, exitsthe EU and abandons the singlecurrency, an untold number of biginternational financial organisa-tions will immediately go belly up,their position compromised by

overwhelming exposure to Greece and other, big-ger economies, sometimes in much worse posi-tion. And when big money collapses, the financialand political elites on both sides of the Atlanticwill be ruined, even though Greece will revert tothe drachma, devalue considerably and exportand grow out of the subsequent depression.

While this partially explains the rush to res-cue Greece, it does not nearly save the Euro-pean project. Portugal, Spain, Italy and evenFrance are hemorrhaging, and not very far fromneeding substantial help in doses, which will in-evitably tilt towards the bailout precedent that

the Greece example has set. Counting on Ger-many to keep filling budget deficits of other,less resilient economies would, of course, bor-der on insanity.

Interestingly, financial markets initiallygreeted the deal with optimism. The euro ad-vanced, crude oil rallied and, coupled with signsof growth returning to the American economy,the European package introduced much wel-come risk appetite in global currency and com-modity markets. However, it was only a matterof quick time before long term concerns re-turned to pundits. When that happened, theeuro collapsed, reintroducing long-term shorts.

The message for other economies, especiallyAsia’s emerging markets, is obvious. In the postrecession era, when capital market solvency isin serious question, sovereign debt is a very se-rious issue. Once capitals start running seriousdeficits, financial institutions with the slightestexposure are put at serious risk. And when thathappens, the life and blood that oils the inter-national globalised market – credit – dries up,compromising whatever efforts are made to re-turn to growth.

For an economy like Pakistan the message iseven more serious. Unlike regional economies,our state of stagnancy is acute. Growth isnowhere on the horizon, there is still no valueaddition in exports, and the rupee is in freefall.While February’s impressive stock market per-formance deserves credit, it does not reflect crit-ical structural deficiencies in the macroeconomy that cannot be sustained without seri-ous overhaul of policy.

Our deficits are in serious red. With sub-stantial components of international aid alsopetering out, there will be yet more unforeseenupward revision of the current account deficit,while the development budget, year-end rev-enue and final GDP are all revised downward.We must immediately introduce policies thatcheck unnecessary leakages and stimulategrowth. At present, both fiscal and monetarypolicies are counter productive, while relevantauthorities doing little of intrinsic value. Theelection is near. Learning from examples ofcountries destroyed by debt will not only healthe state of the economy, but also facilitate thegovernment’s long term survival in Islamabad.

The writer is Chief Manager, SME Bank,

with more than 30 years’ experience in the

banking industry.

GRANTED, the local press isright in appreciating thepace of progress of Pak-India trade liberalisation setin motion by the Fahim-

Sharma summit some months back. Nor canthere be any denying that the present regimeof redressing trade barriers isunprecedented, and ultimately completeliberalisation is in the best interests of bothcountries, as well as greater South Asia. yetit is prudent to be mindful of pitfalls suchprocesses invariably entail. So far, thegovernment has been rightly cautious,revising its negative list after giving anotherear to some industries that stand to losecomparative advantage in case of opening uptoo soon. Pros and cons cannot only be weighedtechnically, with market forces dictatingeventual readjustment. Shifting posture too soonin a stagnant economy is rife with complications

– imports from the neighbour increasing justwhen traditional production advantage iscompromised, for example. Rather than markyear-end for phasing out the negative list, bothIslamabad and New Delhi must reconsider gainsagainst the original project scope.Much has been accomplished. Bothgovernments have been able to restrainrightist tendencies and convince tradelobbies of the urgency of forward march.Interestingly, this movement has rubbishedthe previous mutual position of settlingpolitical disputes before engaging morepurposefully in commerce. Now, thetechnical more-trade transition needs veryfine management. Both sides must ensuretheir trump cards are not caught off guard,and some will require more time than theremainder of the year to prepare for stiffercompetition. Should haste prevail, no matterhow well intentioned, neither economy cancurrently withstand production and earning

Liberalisation pitfalls

Pakistan mustlearn fromexamples ofgovernmentsthat run highdeficits

When sovereignsare bankrupt

Javed Gilani

IP Pipeline

This is with regards to the quick edittitled “The pipeline policy” published onSaturday. I think it is a positive stancefrom our government that we areignoring all these so called threats fromWashington. And now that we have madeour stance pretty clear, my humblerequest to the Government Of Pakistanwould be to stop giving statements onPak-Iran pipeline and complete theproject on Fast Track basis as this is themost economical and viable project . Thiswould rest the debate for good.

RIZWAN

LAHoRe

Bull surge

This is with regards to the news report‘Pakistan equities return to top five re-gional stock list’ published on Saturday.The recent trend of bull surge has beena positive sight and now that we havereturned to the top five regional stocklist, we must look to cement our placeover there. February was a lucrativemonth for Pakistan, and if we steerclear of political turmoil the comingmonths should also follow suit. The factthat we are only behind China, Indiaand Indonesia in the region is also apromising stat.

ALI WAHID

KARACHI

E D I T O R I A L

Lawn-ing with the most favoured neighbour

OH, what a beautiful morn-ing! I turn onto the mainroad only to stare at theenormously gigantic bill-boards and flex banners

featuring pretty girls from Bollywood. Inthe Pakistani context, it would not be pre-sumptuous to state that celebrity endorse-ments by Bollywood actresses can and infact, have successfully managed to aggran-dise the brands involved. Passing by theroads of Lahore these days, I am forced tocontemplate and have second thoughts

about my location status. Whether I am re-ally in Lahore or not: that is the question.It appears as if I am watching a Bollywoodmovie or taking a walk through the streetsof Delhi, where every other pole is lined upwith a banner of a visibly beautiful Indianactress wearing a - not so visibly in focus,lawn print (I still am in serious doubtswhether the celebrity is endorsing theproduct or the product is endorsing thecelebrity).

Pakistan, just like India, is one countrywhich has always idolised stars of the cellu-loid world. Therefore, it makes tremendoussense for a brand in Pakistan to procure acelebrity for its endorsement. But despite theobvious economic advantage of using rela-tively unknown celebrities or Lollywood ac-tresses for that matter, as endorsers of theadvertising campaigns; the choice of Bolly-wood actresses to fulfill that role has becomecommon practice for lawn brands compet-ing in the lawn-race. The objective for acelebrity endorsement of this sort is clearly

to garner faster brand recognition in an at-tempt to win the customer preference andsell the product. And Bollywood actresseshave no doubt helped the lawn brands tostand out from the surrounding clutter ofever-increasing lawn brands, improvingtheir communicative ability and brand recall.Just like I remember that Firdous becamethe pioneer and talk of the town by endors-ing ‘Kareena Kapoor’ for their lawn prints; Ican also recall my male friends’ enthusiasmon waking up one fine day to see their epit-ome of Bollywood beauty endorsing a prod-uct of their least concern. I am not sure aboutthe target audience of these lawn prints, butthe males did and still continue to get a goodeye candy of these celebrities coming straightfrom the neighbouring country.

On the flip side, recently there has beena massive uproar among the leading indus-trialists, including people from the textileindustry, regarding the Most Favoured Na-tion (MFN) status to India, trade liberalisa-tion and phasing out of the negative trade

list with India in orderto secure the domesticindustry. Seems likecognitive dissonance isplaying its cards quiteperfectly because thereis a strong lack of agree-ment between the be-liefs held by the groupand their actions. Theirony of the situation isthat even when the tex-tile industry is taking aheavy toll on the situa-tion, it is choosing thefavoured nation for endorsing and sellingthe textile products. Marketers claim thatadvertising simply mirrors the attitudesand values of the surrounding culture.Hence, you only make a celebrity endorseyour product because you ‘believe’ that the‘particular’ celebrity is the most favouredand popular among the target audience ofyour product. Therefore, the reality of the

situation is that the industrysomewhere in the corner ofits mind also upholds thisbelief and regards the nationto be favourable while on theother hand opposes the deci-sion of the government.Also, remember that ‘peoplemake a nation’. I am cer-tainly not favouring any sideand neither giving my stanceon the MFN status to India,however, the point that I amtrying to make here is that ifwe are using our favoured

nation’s people to sell our products then weshould accept the recognition of theirgranted status as well. Let’s just open oureyes and step out of our shells of double-standards to embrace this reality, which isotherwise dirt-under-the-carpet.

The writer is Sub-Editor, Profit.She can be reached at

Maheen Syed

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M o n d a y, 0 5 M a r c h , 2 0 1 2

I can recall my malefriends’ enthusiasmon waking up onefine day to see aBollywood beautyendorsing lawn printsof their least concern

KUNWAR KHULDUNE SHAHIDSub-Editor

MAHEEN SYEDSub-Editor

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