Thursday, August 11, 2016

"Who killed Cock Robin?"

Majyd Aziz

It is time to forget what happened in the past . . . who killed Liaquat, Benazir, or how did Jinnah die, or even the circumstances that led to the death of prominent personalities. Conspiracy theories, accusations, and suspicions are floated off and on but only those who committed or authorized the act know the truth. Today, one suicide jacket or one drone or one missile attack kills thousands. The grief is there, but soon the names of victims become numbers and the world moves on. The past is past. It is time to focus on solutions to eliminate or reduce modern day killing with sincerity of purpose and full accountability. 

Maintenance and monitoring of law and order situation should not become a shuttlecock between law enforcers and political hierarchy. The privileged few who exert influence are the root cause for the deterioration of a peaceful environment. This is nothing but a tragedy perpetrated on the citizens of Pakistan. This has also sullied the positive image of the nation all around the globe. This pathetic scenario, as well as the general apathy and attitude of authorities, remind one of a Nursery Rhyme learnt in Kindergarten school. "Who killed Cock Robin?"

"Who killed Cock Robin?" "I," said the Sparrow,
"With my bow and arrow, I killed Cock Robin."
"Who saw him die?" "I," said the Fly,
"With my little eye, I saw him die."
"Who caught his blood?" "I," said the Fish,
"With my little dish, I caught his blood."
"Who'll make the shroud?" "I," said the Beetle,
"With my thread and needle, I'll make the shroud."
"Who'll dig his grave?" "I," said the Owl,
"With my pick and shovel, I'll dig his grave."
"Who'll be the parson?" "I," said the Rook,
"With my little book, I'll be the parson."
"Who'll be the clerk?" "I," said the Lark,
"If it's not in the dark, I'll be the clerk."
"Who'll carry the link?" "I," said the Linnet,
"I'll fetch it in a minute, I'll carry the link."
"Who'll be chief mourner?" "I," said the Dove,
"I mourn for my love, I'll be chief mourner."
"Who'll carry the coffin?" "I," said the Kite,
"If it's not through the night, I'll carry the coffin."
"Who'll bear the pall?" We," said the Wren,
"Both the cock and the hen, we'll bear the pall."
"Who'll sing a psalm?" "I," said the Thrush,
"As she sat on a bush, I'll sing a psalm."
"Who'll toll the bell?" "I," said the bull,
"Because I can pull, I'll toll the bell."
All the birds of the air fell a-sighing and a-sobbing,
When they heard the bell toll for poor Cock Robin.

The message in this poem is loud and clear. The whole forest got into the act to honor Cock Robin, to do whatever needed to be done, offering their expertise and resources, but no one accused, arraigned, or arrested the sparrow. Maybe the sparrow was forced to admit that he did the killing whereas it is not known who ordered the killing. Notwithstanding the fact that the sparrow is a small bird, the other bird species, as well as concerned fish and animals, were ready to do everything for the dead Cock Robin. A few offered to sing eulogies or toll the bell, but they did not light candles, they did not go on a protest march, nor did they demand exemplary punishment for the sparrow. Amazingly, the poem does not mention even one line about the role of the lion, the King of Jungle, nor did any monkey, giraffe, or elephant come forward to do a good deed. Not even one condolence message.

In Pakistan, we have developed a new tradition by lighting candles to mourn or protest a killing. Usually less than 50 social activists gather at a place, light candles, post strong messages on Facebook, Twitter or Whatsapp, put the pix of the deceased as DP, and one week later, they all forget and bide their time waiting for another such cause. Like Sabri or Sabeen who are no more prominent in the news. Even Edhi, who did die of old age complications, is no more on their radar. Of course, death anniversaries are observed religiously and politically, and the speakers pledge to carry on the cause of the deceased. Gradually the tide ebbs, and the intensity and commitment to the cause lessen. The police as per SOP round up a large number of suspects and after interrogation or after offerings of sweeteners, or after both options, release them. The political leaders have already given a 72-hour deadline for apprehending those who committed the dastardly act. 

The killers of the high profile personalities are still on the Most Wanted list, and like the sparrow, totally confident that they will live out their lives in total freedom, unless their string pullers have not already bumped them off. They smugly enjoy the contents of the heavy purse given to them on completion of their mission. The truth stays hidden and safe. "They used not to prevent one another from wrongdoing that they did. How wretched was that which they were doing" (Al-Quran 5:79)

Monday, July 25, 2016

Gridlock on the Waterfront

Majyd Aziz

Karachi is blessed with two major Ports, Karachi Port and Port Qasim, that are operating at full capacity.  A modern Port is designed to cater to the demands of the economy, whether more imports are entering the country or whether goods and commodities are destined for exports. It is imperative that a strategic framework be in place to regularly upgrade and improve the infrastructure, eliminate unnecessary bottlenecks, ensure productivity and efficiency of dockworkers, stevedores, and the Port management and operational staff, and to make the Ports user-friendly in real time.

The Karachi Port is the lifeline of Pakistan's economy. This is the first entry for imports and this is where Pakistan's exports are shipped around the world. It is important that all essential steps are undertaken so that the Port users are not handicapped with exorbitant and ad hoc dues and charges. The present Chairman of KPT, Vice Admiral (R) Shafqat Jawed, has often stressed the need for creating an enabling environment and introducing a corporate and efficient culture at the Port. However, decisions must be taken to rationalize the tariff and dues structure. A review is presented alongwith some viable suggestions.

The first issue that crops up is that the Karachi Port tariffs for ships are very high and frequent changes are made without any information to Port users. Due to high port tariffs and excessive light dues, KPT earns huge surpluses and then the Trustees become generous in advancing huge money to build flyovers, underpass in Clifton, water fountains, and donating large amounts here and there. Port dues are Dollar-based and for every increase in Dollar value, KPT earns a bonanza. These resources are then used to finance projects that are not Port based. Ministry of Ports and Shipping must issue explicit orders that Port cash surplus cannot be used for non-KPT projects and events.

Light dues, which are based on Net Registered Tonnage (NRT) of the vessel, were Rs 0.50 per NRT, but some five years ago, these were raised to Rs 3 per NRT and again in 2012/2013 increased to Rs 7 per NRT. These excessive dues are levied to maintain the Lighthouse. An example is that a ship carrying coal with 27000 NRT is billed $1,948, adding Rs 5 per metric tonne (PMT) of cargo. However, no proper accounting of the maintenance cost is provided to users. No one is consulted and no one knows where the money is spent. This has resulted in Port dues and Light dues for the vessel propping up to $1/1.50 PMT whereas, in actuality, Port dues should be lower.

All this is eventually paid by users, while the business community gets to know later that freight costs are increasing for their imports and exports.  They are thus paying excessive container Terminal Handling Charges (THC) since Port dues ensue into increased freight charges. Nobody in any trade organizations nor even the Private Sector Trustees on the KPT Board monitor Light dues and Port dues and nor do they attempt to get these reduced. Resultantly, these are costing Billions in supplementary cost to trade. 

In fact, Port charges should be bifurcated into local - those incurring Port costs like salaries of KPT, maintenance and repairs, etc, and foreign - where foreign exchange is involved. This would save Billions in cost of handling rapeseed, canola, wheat, coal, etc for exporters, importers, and even government.

The container terminals, PICT and KICT, have been given carte blanche to charge whatever they want in blatant violation of the contractual agreement. A vivid example is at Port Qasim where FAP Terminal, that quoted Rs 390 PMT for the first ten years in the initial Tender, is now unilaterally charging Rs 469 PMT and upto $14 PMT. These container terminals are minting record profits and, no wonder, foreigners grabbed the PICT shares at abnormal prices since the profits are phenomenal. Shares of container terminals are akin to the money made by LNG and fertilizer companies, profits at tremendous cost to businessmen and farmers.

In the same manner, shipment of edible oil and crude oil is subject to higher than market rates because PNSC has been given the mandate of higher rates thus adding millions to the prices that the nation pays out for crude oil and petroleum. Private tanker owners worldwide are offering cheaper transportation freight rates on long-term based index but due to PNSC, oil cost rises. The modus operandi adopted by PNSC is that it is given first refusal rights on the Tender for transportation. Instead of operating its own vessels, PNSC charters vessels from the open market at lower rates and skims the differential as its profit. Moreover, the PNSC dry bulk fleet was procured at higher rates and the operating losses of dry bulk carriers are enormous but these are camouflaged in the huge profits made from tankers.

KPT resources must be invested to upgrade the berths, introduce modern equipment, plant mangroves, clean up the polluted water and Port area, and building high ceiling edifice at Groyne Yard so that environmental issues emanating from coal stored at the Groyne Yard are seriously addressed and eliminated. It is reiterated that a total ban be placed on utilizing KPT money for fountains, underpasses and flyovers in Karachi.

Another area where costs are negatively affected and is a very serious concern is the stranglehold that the truckers have on movement of goods from the Port. They do not accept or agree to long-term commitments and hence arbitrarily jack up the per ton rates at will. They often resort to strikes with the result that Port users suffer huge demurrage charges, stoppage of export shipments, shortage of essential items and commodities, and negative image of the Port and country. Nowhere in the world, except Pakistan, is essential cargo blocked or movement hampered. The government must monitor this situation regularly and take immediate steps to control this menace.

KPT can reduce and control its maintenance expenses if there is strict monitoring and accountability on the utilization of tugs, pilot boats, dredgers, and other equipment. Furthermore, a functional and pragmatic system must be in force to monitor lethargic and bureaucratic attitude of many personnel, especially officers, who are always in one meeting or the other. This slows down Port work and creates avenues of corruption and other ills of society. Thus, it is crucial that the majority of the Board of Trustees should be nominated by Port users rather than asking for nominations from trade associations or appointing irrelevant persons, whether on political basis or due to their high profile. KPT is the pride of Pakistan and it will always have the critical mass, even after Gwadar, Port Qasim and the futuristic Keti Bunder. 

Business Leadership Potential

Majyd Aziz

Business community is considered a very strong and potent force anywhere in the world. The opinions, views, and concerns of business/industry community are taken with all merit. A united business community can do wonders and zoom up the nation's economy. The sad fact is that despite all the announcements coming out of Pakistani trade organizations, the ground reality is that business community is rudderless in turbulent seas. What has been the real time achievement of business leadership in the last 8 years? Has it done any soul-searching to grasp the reality? They profess thru bombastic statements and press releases that they have done wonders whereas they are seldom taken into confidence by policymakers and powers that be.

Moreover, the business leadership, primarily due to its own fault, has been divided like never before. Those external forces who wanted this situation have succeeded beyond any doubt. Business leaders have been relegated to making Welcome Addresses, presenting plaques, and singing high praises of people who are guests of trade organizations. Lunches and dinners, laudatory phrases, photo-ops, and making irrelevant statements are the tools employed to lobby with people who matter. Former State Bank of Pakistan Governor, Dr Ishrat Hussain, once very candidly warned the business community about the perils of this approach. He has been proven right.

The Federal Budget is anxiously awaited every year and as per Standard Operating Procedures, the trade organizations get their act together and present their proposals. Every year they find out that most of their proposals have made it into the waste paper basket instead of in the Budget papers. Business leaders make a beeline to Islamabad to remove anomalies or get clarifications and come back either empty-handed or hollow assurances. Millions spent on airfare, hotels, and transportation due to this tedious process of rushing to Islamabad. The double jeopardy is that most of the business leaders are hostage to those who are non-tax filers who have strong street power and they manage to prevail upon the leadership to toe their line. There is obviously a downward spiral of segregation between the documented economy and those who are out of the tax net. More often than not, the registered businessmen and industrialists get the lower end of the stick.

On the other hand, inimical forces in bureaucracy conspire to create serious issues for industrialists. Recently, SITE Karachi, the largest industrial estate of Pakistan, that has 30% of Pakistan's textile processing mills, faced a severe water crisis. As it is, SITE requires 42 million gallons daily to cater to the 3500 industries and commercial establishments. Karachi Water Supply Board has never provided even 9 MGD despite the increased demand. The textile processors managed to convince the authorities to allow them to pipe in sub soil water from the periphery of the estate. Thirty-two suppliers pump in around 2 MGD to many industries. SITE Karachi was on the verge of closure due to the conspiratorial attitude of KWSB higher-ups and the Minister who, sad to say, is very ignorant of the dynamics of water supply to industrial areas. The right message was not been seriously conveyed to the decision makers. SITE Association of Industry organized protest meetings, press conferences, and even a sit-in at the Sindh Chief Minister House. The octogenarian Sindh Chief Minister did step in and ordered the status quo. Billions were lost in this anti-industry decision of the KWSB.

One vivid example of business leadership was witnessed in 1986, during the draconian days of Gen Zia. The then CBR came up with a so-called "Simplification of Excise Rules" opera. The actual conspiracy was to stab the industrialists deeper in the back and to create a chasm between General Zia and the business community. SITE Association of Industry, led by the dynamic and bold Mian Ejaz Shaffi, got its act together and mobilized the industrialists. For nine days, the affected factories remained closed and 500-600 industrialists were daily present in the Association office. Despite threats of all kinds, Ejaz Shaffi and his defiant colleagues held their ground. The protest was front-page news in all newspapers every day. Prime Minister Muhammad Khan Junejo had to fly to Karachi and meet the industrialists and ordered CBR to back off. This is real power. Alas, those were the days and there was a strong leader, Ejaz Shaffi.

Why cannot this be done today? Federal Budgets are routinely approved by a Parliament that does not understand the ABC of finance and taxation. What has been the result? Exports have dipped, taxes on the rise, non-filers still out of the tax net, anomalies still not addressed, wealth being diverted to real estate rather than productive areas, and despite all firewalls, capital continues to shift to safe lands. And, more such negative signals that one can carry on enumerating.

The time has come to take stock of the situation. And time is running out. There are very positive opportunities on the highway to economic progress and there are still dangerous roadblocks along the way. CPEC is a golden opportunity if it is shielded from political and parochial attacks. Gwadar Port and Thar Coal are avenues of economic and social prosperity if pragmatically managed. Low Inflation, reduced Discount Rate, achievement of MSCI status, etc are signs of reassurance. Brexit is a serious concern. Corruption is talked about but not attacked seriously. This is eating away the nation's moral fabric. Political instability is on the ascent. Another negative signal. Deterioration of civic amenities and infrastructure are impacting on economic progress. Export culture is just a mirage while there is official enthusiasm for imports.

Therefore, the business and industry leadership have to come out of the cocoon and get their act in shape. This is the time for assertiveness. This is the time to forge real unity. This is the time to restrain from meekness, misplaced ego, and inertia. This is the time to show the strength and power of the engine of economic growth - - - the business and industrial community. It's now or never. The decision lies with the business leaders. Walt Disney very rightly said, "The way to get started is to quit talking and begin doing"

Friday, July 22, 2016

Portrayal of Women in Media

 MARCH 11-2013

  • ·         Media is TV. Radio, newspapers, movies, and advertisements.
  • ·     Media is such an intrusive part of our lives that, we at times, do not comprehend on a conscious level how much influence it really has in our daily lives.
  • ·      Only when we have more women making management decisions in media can we expect the media to be more reflective in its perspective.
  • ·       In more ways than one, the male character in various plays and serials is primarily more dominant, depicting his “importance” in office or place of work, and seemingly very dictatorial.
  • ·     There are too many Cook Shows on electronic media. This has also affected the viewing patterns of the woman viewer since most of them are watching the various Cooking Shows during daytime as well consuming electricity.
  • ·        Even male models and fashion designers act, behave, and talk in an effeminate manner.
  • ·     The question one should deliberate on is how effective and motivating are female role  models?
  • ·        Another question worth discussion is whether portrayal of women is realistic?
  • ·        Third question is whether women are still being stereotyped in plays and serials?
  • ·      The view is that most plays still show women as without a voice, still the housewife, and  still an object of sexual desire.
  • ·        How many commercials show women selling cars, insurance, motorcycles etc except in a   supporting role in these commercials.
  • ·        Even cell phones commercials depict women in a seductive mode.
  • ·        Female Models are generally taller than average women.
  • ·        How much coverage given to women sport events?
  • ·    Recently one TV channel daily showing Annual Day programs of women colleges and schools.
  • ·         Woman’s portrayal in media in Pakistan is a highly sensitized topic.
  • ·    Why do women models and actors allow themselves to be “painted” in outrageously  exposing dresses and in disgraceful poses on billboards, especially advertisements of  movies?
  • ·    Compare the differences in the talking, expressing, acting, and articulating of Indian  women actors and models and their Pakistani counterparts.
  • ·     Recently a 2000-page verdict was given by Lord Justice Leveson in UK. The verdict  specifically referred to “Five things about women in media (press)”:

o   Sex objects
o   Wives and mothers
o   Passive roles
o   Relative instability
o   Too fat, thin, old, young

The Avuncular Motivator

Majyd Aziz

Many moons ago, I was surprised to receive a dinner invitation hosted by Abdul Kader Jaffer at his residence in honor of the French Ambassador. Until then, I must have met him once or twice and that too at some reception. AKJ is famous for his exclusive dinners and so, naturally, I sent my confirmation. The twenty or so guests at the dinner were from the A-list of well known personalities and I got the opportunity to network with them. After the sumptuous home-made dinner, AKJ got up to deliver his welcome remarks in his own inimitable style. During his speech, he said something that immediately boosted my morale and I was on Cloud Nine. Addressing the diplomat, he pointed towards me and said highly encouraging words about me. He said, “Excellency, this young man is a Bulldozer.”  I am sure AKJ must have read or heard about my penchant for vigorously getting things done for my business constituency.

Years later, the then Japanese Consul General invited me, alongwith others to his residence for dinner. There he announced that there was a need to set up the Pakistan Japan Business Forum under the leadership of AKJ. However, since he was at that time about to leave for London as Pakistan’s High Commissioner to the Court of St. James, Aziz Memon would be the Founding President and I would be the Founding Secretary General. I am convinced that AKJ must have proposed my name to the Consul General. I was tasked with writing the Memorandum and Articles of Association and to go to Islamabad to get it approved by the Japanese Ambassador.

Fast forward to many years later, AKJ returned after a successful tenure as High Commissioner and got on with his business and social activities. One day, I received a call from the Japanese Consul General that we should approach AKJ and convince him to become President of PJBF. He suggested that I call AKJ and get his consent. I did just that. He was reluctant but I straightaway told him that we needed him to restore the glory of PJBF and we were of the opinion that he would provide the critical mass so desperately needed to make PJBF a force to reckon with. When I rang him up some days later, he accepted the offer but threw in a caveat. I had earlier informed my colleagues (we were 10 Japanese and 10 Pakistanis) in the Executive Committee that I would not contest elections but work as an ordinary member. AKJ said, “I want you on the Board as Vice President.” I informed him of my earlier decision. In a strong, raised voice, he said, “You will be my Vice President AND THAT IS AN ORDER.”

Anyway, if I had any notions of defying him, I was sadly mistaken. He repeated the Bulldozer comment and thus I had to get the election formalities modified. With AKJ as the helmsman, PJBF took on a fast track mode. He spearheaded the project of Joint Business Study with our counterparts based in Japan and made sure that Ministers and officials who mattered visited the Forum. Receptions and dinners in their honor were done at his home since he had a huge and spacious garden. This saved us a lot of money and enabled us to have our programs in a private environment.

AKJ was wearing quite a few hats during that time. He was managing his various companies, he was socially very active, he was heading PJBF, and, remarkably, he was putting his pet dream into reality. This is The Hub School, his gift to the future of Pakistan. This is no ordinary school, this is no low-investment institution, and this is no ill-planned initiative. This is going to be an epitome of scholastic excellence, more so because it is an AKJ project. Single-handedly and with missionary zeal and fervor, he trotted the globe and attracted pledges of financial support and technical expertise. In reality, his name and his family legacy, coupled with his determination and dedication, enabled people to open up their fat wallets for The Hub School.

English Speaking Union of Pakistan was founded by the respectable and distinguished Ahmed E. H. Jaffer, the paterfamilias of the Jaffer clan. I was fortunate to have met him once when I stopped to let him and the Former Chief Justice of Pakistan, Justice A. R. Cornelius walk down the path. Mr Jaffer looked at me and asked me my name and what I was doing. Then, glancing towards the noted jurist, he said to him, “this young man should join the English Speaking Union of Pakistan.” Of course, I had heard of ESUP but had no idea about its role and procedures. It was many years later that I formally joined ESUP. Today, with the approval of Senior Vice Presidents, AKJ and Byram Avari, and President Aziz Memon, I am the Secretary General of ESUP. Another feather in my cap and, incidentally, the “invitation” of the two eminent gentlemen came to fruition.

AKJ is a tough taskmaster. He does not accept any excuses not does he tolerate deviation from protocol. And, he does not appreciate NO for an answer. He is meticulous about details and ensures that everything is perfect in meetings (like his father, he also maintains strict punctuality), and processes are in order. When he rises to speak, it is with conviction, it is forceful and he does not mince words. Ministers, diplomats, and officers, and all of us, catch on to his every word because he speaks with authority, with substance and with sincerity.

I have learnt a lot from him. I have also borne the brunt of his irritation and, at times, anger. But that does not mean that one should get dejected or depressed with his criticisms or comments. More importantly, if we convinced him that we were right, he accepted it with all the merit of our counter-arguments. This is what makes us respect and love him more.

As I close this article with all my prayers and best wishes for AKJ and his family, I am sanguine AKJ, or Kader Bhai as we address him with utmost respect, a man whose sartorial taste is immaculate, whose social responsibilities are noteworthy, whose leadership style is inspiring, and whose oratory is rousing, would agree with  Kimora Lee Simmons, a noted American creative entrepreneur, who once stated that I feel like I'm a good motivator; I'm very determined.”

Pakistan-Sri Lanka Soybean Cooperation

Majyd Aziz

Pakistan and Sri Lanka have a strong bilateral relationship, that is broad based and focused on many aspects such as trade, investment, sports, education, as well as defence. There is an imperative need to upgrade this relationship and venture in to joint ventures, technology transfers as well as common global marketing strategies and partnerships. The Free Trade Agreement has not been a pragmatic success, primarily because of the limited scope of products traded by the two SAARC nations. The expected giant leap has not materialized and this has dampened the enthusiasm that was envisaged after the implementation of the FTA.

There is a need to strategize and revisit the FTA so that the future years would witness the real time success of the FTA. Agriculture is one very essential sector that would enhance bilateral trade and investment figures and would open new vistas of mutual and beneficial cooperation. There are many complementary crops and there are many produce that are in high demand and are presently sourced globally instead of self-producing these in substantial quantities so that emphasis is on import substitution as well as catering to the requirements of regional partners.

Soybean is considered as a potential food crop for the protein needs as well as for oil requirements in this region. It is used in the food industry for flour, oil, margarine, cookies, biscuit, candy, milk, vegetable cheese, and many other products. Soybean is now accepted as an essential commodity and thus it is imperative that the region depends on maximum self-production rather than relying mostly on imports from various countries. Pakistan and Sri Lanka are well placed to accord priority to soybean cultivation. In Pakistan, soybean is ideal during crop rotation, especially between the sowing and harvests of rice and cotton in irrigated areas and wheat in rain fed areas. This would enable the farmers to have a profitable alternative crop by utilizing the gap between two harvests. Likewise, this exercise is also important for the Sri Lankan farmers. Sri Lanka is considered as the pioneer in soybean among Third World countries and initiated soybean cultivation keeping in mind the concept of food for the people and then cater to the livestock requirements.

Both Pakistan and Sri Lanka are end-users of soybean since this agricultural product is ideal for human consumption as well as a potent animal feed. The characteristics of soybean allow farmers and livestock owners to increase milk production and develop a healthy and high-yielding animal. Consequently, the demand for soy meal has moved from the usual 5-7% to 10-15%. Pakistan is heavily dependent on soybean imports from Argentina, Canada, and USA, to name a few major exporters. The annual imports in 2015 were a little less than 600,000 tons, a gigantic jump over 2014 when imports were just around 10,000 tons. The consumption of soybean in Pakistan is nearly 2,000 tons per day and the demand is increasing with the rise in livestock population. Sri Lankan imports of soybean in 2015 were 220,000 tons indicating a growth rate of nearly 16% over the previous year. At present, the global prices for soybean are more than $1000 per ton excluding freight charges of upto $60 per ton.

The distressing fact is that at present the Pakistani farmers are diverting from planting soybean and instead depending on other alternate crops. This strategy is restricting them from taking advantage of the opportunities available to maintain viable options of sowing and cultivation. Sri Lanka, however, has developed a feasible framework by utilizing soybean to produce soy food items that cater not only to the domestic market, but has an export potential. This is the marked difference in both the countries. There is considerable Sri Lankan government support for using soybean for human consumption while farmers in Pakistan are not being encouraged to enhance production of soybean.

There is a ray of hope for revival of soybean cultivation in Pakistan. According to reports, Pakistan Agricultural Research Council (PARC) has endeavored to introduce technological innovation by planting seed multiplication blocks of soybean varieties on 270 acres and distributing seeds to farmers. The objective is to reduce the cost of production of soybean and enable profitability for farmers. This project for developing high yielding seed varieties, alongwith technology orientation programs for farmers, may encourage them to change their lack of interest in soybean. Sri Lanka initiated the Sri Lanka Soybean Development Program in early 1970s to introduce new high-yielding soybeans varieties. Soybean production research was enhanced at the Central Agricultural Research Institute (CARI) and three other research stations. The goals were to increase the production of soybeans in Sri Lanka on a sustained and permanent basis, to increase the supply of high-quality edible protein and oil for home consumption, to satisfy the domestic needs for protein rich feed for cattle and poultry and to minimize feed imports, to increase exports, generate more employment in rural areas, reduce imports of food products, and increase the per capita income of small farmers.

The contrast between the fundamental approach of Sri Lanka and Pakistan is very evident. The growers, with the support of technical experts and government, are taking advantage of the facilities and incentives available and increasing the production. In Pakistan, there is relatively less governmental and technical support to develop the soybean sector and the farmer is constrained and unable to take the initiative. Since demand for soybean is on a rise, it is proposed that soybean could be taken up as a bilateral initiative by both countries so that synergies could be developed that would, in the long run, reduce foreign dependence by a sustained and substantial increase in local production. Moreover, since Sri Lanka is promoting soy foods, it is also a worthwhile opportunity for soy food manufacturers to establish an export market in Pakistan. 

In future, the Sri Lankan soy food exporters can broaden their base by entering into agreements of joint ventures or technology transfers with their Pakistani counterparts in order to popularize it and encourage farmers to cultivate soybean. There should be a formidable cooperation mechanism between PARC and CARI and other such institutions for innovation and development of new seeds and farming techniques. This could then be further expanded around the region. Pakistan and Sri Lanka need to cooperate with each other in handling food security and this is the most crucial issue for Third World countries. This would also lead to substantial success of the FTA and, like defence, coconut, and of course, cricket, it would forge a deep-lasting bilateral relationship in the true SAARC sense.

Wednesday, February 24, 2016

Palm Oil Scenario

Majyd Aziz

Human beings have been using palm oil since 3000 BC and, in fact, everyone consumes products that have palm oil component. Palm oil is considered the Common Man's Oil. Pakistan has become a major player in the global palm oil market since palm oil has a 71% share in the edible oil market. This is mainly due to low cost and high demand for hydrogenated oils (Banaspati) that has a share of 60% compared to cooking oil with share of 40%. Pakistan, being the fourth largest importer of palm oil, has become a hot competitive destination for major palm oil growing countries, Indonesia and Malaysia. These two ASEAN countries are the two dominant global suppliers overseeing four fifths of global production while responsible for nine tenths of world trade. Pakistani imports depict a marked preference for Indonesian palm oil, especially after Preferential Trade Agreement with Indonesia even though there is a Free Trade Agreement with Malaysia. The share of Indonesia in exports to Pakistan was 42%, 73% and 83% in 2013, 2014 and 2015 respectively, while of Malaysia was 58%, 28% and 17% in these three years.

The global production of palm oil is increasing at a brisk rate from 46.20 million metric tonnes (MMT) in 2010 to 62.40 MMT in 2015. The future projections are also positive, with experts predicting total production to touch the 90 MMT figure by 2025. The share of Indonesia in 2015 was 33 MMT while of Malaysia was a tad over 20 MMT. World palm oil exports increased sharply to nearly 48 million MMT in 2015, which depicts its huge demand. India imported 9.5 MMT while Pakistan bought 2.5 MMT. Pakistan's import of palm oil consists of Olien, Refined Bleached Deodorized Palm Oil (RBDPO), and Crude Palm Oil (CPO). Due to a limited refining base, Pakistan only imported 104,000 metric tonnes of Crude Palm Oil. Pakistan’s palm oil imports declined to $1.8 billion in Fiscal Year 2015 from $1.9 billion in the preceding year, mainly because of softening palm oil prices internationally. Although the prognosis is that Pakistan's palm oil demand would remain steady in the next few years, major players like prominent businessman Najib Balagamwala are convinced that a shift towards soybean oil would reduce the overall demand of palm oil.

At present, in Pakistan, the duty structure for palm oil products is as follows:
Palm Oil Duty Structure : Pak Rupees / Metric Tonnes
Palm Oil
Federal Excise

World experts and officials promote their own views and opinions on the present and future of the palm oil sector. Thomas Mielke of Oil World, Germany, a leading private authority on oilseeds, oil and meals, has a bearish outlook for palm oil prices in 2016. According to him, with prices of global commodities plummeting due to economic slowdown, geo-political risks, financial uncertainties, dwindling prices in the world equities market, weather dryness caused by El Niño resulting in crop damage, weak global energy prices, a slowdown in the Chinese economy, and a shift towards soybeans, the price of palm oil products would remain under pressure. Dorab Mistry, Director of Godrej International of India, also agrees on the effects of El Niño on crop production. He terms it as a "triple whammy of dry weather, biological low cycle, and seasonal low period". He also maintains that a huge demand for soybeans by China that could be as high as 84 MMT would also negatively influence overall palm oil demand.

Kanya Lakshmi Sidarta of Indonesian Palm Oil Association states that, "Indonesian palm oil is now trending towards a more diversified downstream product, contributing a significant 13% share of total export earnings". She further added, "palm oil results in stabilization of food prices and is an important source for renewable energy. Palm oil is considered to be the most competitive feedstock for sustainable biodiesel". The Indonesian government has mandated the use of palm oil to produce biodiesel for domestic needs. At present, over two MMT per year has been diverted towards producing bio-fuels. Paulus Tjakrawan of Indonesia Biofuels Producer Association estimated that bio-fuels demand in Indonesia would rise from 5.50 MMT in 2015 to nearly 8.0 MMT in 2016 and projections are that it would reach 24 MMT by 2025. According to him, the share of bio-fuels in producing energy is 20% in transportation, in industry, and in SME, agriculture, and fisheries sectors while it is 30% in power generation.

Notwithstanding the estimates of Mr Tjakrawan regarding increased diversification of palm oil to produce bio-fuels, Mr Mistry sees a Catch-22 situation. He cautioned that, "the main determinant of the success or otherwise of the biodiesel mandate will be the price of Gas Oil or Mineral Diesel in South East Asia. If the price of Gas Oil remains low around US$ 450 per MT and the local domestic price of CPO in Indonesia (without Export Tax ) rises to US$ 500, then it will require a subsidy of US$ 160 per MT to make biodiesel workable. If the price of CPO rises to US$ 550, the subsidy required would be a massive US$ 210 per MT. That will reduce the tonnage of biodiesel that can be subsidized and therefore consumed. So it can be said that the biodiesel program has an in-built bias towards the price of mineral diesel and also has a self-correcting mechanism."

The foreseeable global position is that palm oil, although universally accepted as a much-desired commodity, would be susceptible to many extenuating circumstances. The production can only be increased through allocation of more cultivable land in Indonesia and Malaysia, especially if they have to maintain their strong global presence. At the same time, major importing countries, like Pakistan, would hedge their bets and rely more on alternate crops, such as soybeans. A strong indication is that imports of soybeans that were about 9,000 MT in 2014 shot up to 580,000 MT in 2015 despite increased imports of palm oil products. It is now imperative that the Pakistan Vanaspati Manufacturers Association, All Pakistan Solvent Extractors Association, Pakistan Edible Oil Refiners Association, and relevant indentors, importers and facilitators, agree on a joint harmonious and institutionalized approach, so that not only government policies are rationalized for promotion of the edible oil industry, but also to promote a favorable, efficient and formidable position of Pakistan as a major global player.