Tuesday, March 13, 2012

Pakistani businessmen decry ISI-bashing

                                                                          Majyd Aziz

CIA, MOSSAD, MI-6, RAW, and of course, ISI. These are some of the well-known, respected, and feared organizations, generally known as intelligence or secret agencies, and are mandated by their respective governments or charters to undertake designated activities that are crucial for national security and national integrity of their motherland. Over the past many decades, other such agencies have been in the news and most of them have been infamous, not only in their own country, but throughout the world. Russia’s KGB, Shah of Iran’s SAVAK, former East Germany’s STASI, or the vicious gang of Haiti’s ‘Papa Doc’ Duvalier, officially known as MVSN, but contemptuously nicknamed by every Haitian as Tonton Macoutes. Each and every country, and there are 196 countries in the world, has some structured organization that could be termed as an intelligence agency.

What has become synonymous with these secret intelligence organizations is their portrayal in public as tough, conspiratorial, disregard for world protocols, ruthless, knowledgeable, and in many cases, ‘state within a state’. While accusations and proofs do manifest such thinking, the fact is that for these agencies, the primary objective is to protect and secure the nation from external and even internal threats, intrigues, and more importantly attacks in any manner and channel. Therefore, bashing the nation’s intelligence apparatus is in effect undermining the national security and national responsibility.

Over the last few years, a new thinking has developed in certain quarters and this is assuming ominous proportions. Whispers became words, words became print, print became online debates, and these debates resonated from small hamlets in the interior of Pakistan to the capitals of the world. What should have been nipped in the bud, or just gossiped in the parlors, was broadcast all over through the global megaphone. Suddenly, an organization whose prime objective is to ensure national security and to provide all possible intelligence reports and position papers to the armed forces is being unnecessarily compromised and even postings of the hierarchy have become subjects of pros and cons.

The impetus created by a civilian government to what it called bringing the organization under the executive in its fullest sense triggered warning sirens inside the portals of the well-secured enclave in Rawalpindi. A flurry of actions was immediately conducted and the executive backed down, albeit with a bitter taste in the mouth. Although the status quo was, and has been, maintained and the juggernaut in Islamabad’s Aabpara is functioning as before, the hard fact is that a pretty solid dent has been created in its armor. The invulnerable armor of the organization was further attacked in the back when a mischievous but poignantly damaging clause in the much-publicized lollipop from Capitol Hill called Kerry-Lugar-Berman Act desired that this organization be under true civilian authority. Again, the defenders of the nation brought much needed sanity and prevailed upon the residents of the two regal edifices in Margalla to understand the ramifications of this clause as it would not promote democracy but may unpleasantly damage the process of reconciliation and constitutional authority.

Ever since these externally initiated dents, pointing fingers towards Aabpara has become a favorite pastime for many who exert influence in this country. The self-styled liberals have joined in as a chorus and further exacerbated the situation without comprehending the sensitivity and insight of safeguarding the national strategic assets. Ironically, taking due course to the immortal words of President Harry Truman that “the buck stops here”, the focus has been on the decisions and actions of those who skippered the sensitive organization. The background of these actions has been scrutinized with a bias while opaque glasses are worn to justify the vehement opposition to what transpired behind closed doors. The ensuing result may be the beginning of demoralization within the cadre in this organization and may severely impact the effectiveness and capability of a premier organization, an organization positively recognized as an epitome of excellence within the global intelligence community. Yes, the naysayers love to call it a rogue organization but, at the same time, it is generally acclaimed for its skill, talent, and significance.

So, where does all this leads. From a businessman’s point of view, the very fact that sensitive organizations are made to come out from behind the curtains to be paraded in an alfresco environment and asked to strip bare manifests a threatening situation for the motherland. From day one when Zulfiqar Ali Bhutto daringly announced that the denizens of this nation would eat grass but will possess the nuclear bomb, there has been an anti-Pakistani dark cloud hovering above in the skies. When the event finally took place at Chagai Hill in Balochistan, the clouds became darker and menacing. The brilliant minds overseeing the sensitive organizations ensured that the national strategic assets were well protected and safe from the daily threats from foes and friends alike. Today, the 185 million citizens are comfortable in the knowledge that inspite of all odds, the assets and human resources are secure, dependable, and ready for any eventuality. This is also reassuring for the business community that is investing billions, earning foreign exchange, and providing meaningful employment.

Therefore, the business community is of the solid opinion and are united in requesting people who matter that this is not an ‘us versus they’ circumstance but a matter of national interest that should not become a game scoring or an ego trip. It is imperative that all those who wield authority must be on the same page and must reflect this unified thinking in word and spirit. This is not the time for manipulative maneuvers or polemical pursuits. This is not the time for brinkmanship or gainsaying ventures. This is not the time for putting at risk the ideology and sovereignty of the country. Pakistan is in a crisis, economically, politically, and diplomatically. What should come first? Personal agenda or national integrity? Protection of sensitive organizations, especially ISI, and prosperity of the nation should prevail and recognized as prime priorities. This is only possible when everyone truly adheres to the clarion call, that for all Pakistanis it is always Pakistan First.

Yehi Jo Haal Raha Apni Behisi Ka Tau Phir
Khuda Bachai Jo Farda Meri Nigah Mein Hai Bassi

Saturday, March 3, 2012

CURRENCY SWAP AGREEMENT

 INTERVIEW IN PAKISTAN AND GULF ECONOMIST
 (Feb 27-Mar 04-2012)

Majyd Aziz (Former President KCCI)

Q. No. 01: Tell me something about yourself, please?

I belong to a business family that is involved in value-added textile suitings and shirtings and also in value added menswear. Our major involvement is in coal imports as we have a formidable share of the imported coal market that we supply to large cement mills. We are also the largest exporters of chrome ore from Pakistan. We are also the largest stevedores and cargo handling company in Pakistan primarily handling bulk and break-bulk cargo at both Karachi Port and Port Qasim.
I am active in trade associations, being Former President of Karachi Chamber of Commerce and Industry, Former Chairman of SITE Association of Industry, and am Founder of Pakistan-Japan, Pakistan-Sri Lanka, and Pakistan-Indonesia Business Forums. Incidentally, I am also Chairman of SME Bank Ltd, which is a government-owned commercial bank.

Q. No. 02: Pakistan and Turkish Central Banks signed a bilateral Currency Swap Arrangement (CSA) at a ceremony held in Istanbul in the presence of President Asif Ali Zardari and Turkish President Abdullah Gul. How would you comment on it?

Before answering this question, I would first give a short background of the imperative need for Currency Swap Agreements in Pakistan’s case. President Asif Ali Zardari has been very pro-active in convincing foreign countries to initial Currency Swap Agreements as it is in not only in the larger interest of Pakistan but it would enable SBP to conserve scarce foreign exchange reserves, especially in these tough times. Although SBP has, what is termed as the highest Forex Reserve figures in its kitty, the bare fact is that the burgeoning import bill, the dwindling value of the Rupee, the inflationary trend, the huge expenses on the Global War on Terror as well as rehabilitation of the flood affected victims, etc have put extreme pressure on the economy. Moreover, the inability of the government to adhere to the conditionalities of IMF and other international financing institutions has necessitated a revisit of the country’s Forex options.

The two Presidents took favorable advantage of the close and time-tested and agreed to enter into this agreement. The agreement in Pakistan Rupee / Turkish Lira amounts to $1 billion in equivalent local currencies while the tenor of the agreement is three years. It would definitely enhance Pakistan’s share of the Turkish market and at the same time, Pakistani importers, especially industrialists, would be encouraged to source excellent quality raw material and machinery from Turkey.
Q. No. 03: Do you think Currency Swap Agreement could enhance bilateral trade? Your views:

CSA has been recognized as a viable option in enhancing global trade. Various countries have opted for this agreement including countries that have large trade figures. Pakistan is achieving this status after a long time and in fact, it is to the credit of China that Pakistan is now in a position to offer a precedent to other nations. The deal with Turkey manifests this new thinking. Credit should also be given to the new State Bank of Pakistan, Governor Yaseen Anwer, for spearheading this process. Pakistan strives to be a formidable global trader and it is imperative that all options, that are doable from Pakistan’s point of view, are explored and achieved. It would also provide some breathing space to Pakistani exporters and importers who would be in a position to deal away from the Dollar or the Euro.

Q. No. 04: The Currency Swap Agreement between any two central banks would give positive signal to the market on availability of liquidity of the other country`s currency on the onshore market. Your views:

As stated above, the Central Banks would be able to induce substantial bilateral trade between Pakistan and the countries that have accepted and signed the CSA. It can be stated that CSA has two main advantages. Firstly To secure cheaper debt by borrowing at the best available rate regardless of currency and swapping for debt in desired currency using a back-to-back-loan and secondly, to hedge against or reduce exposure to exchange rate fluctuations. It is to be noted that while Central Bank liquidity or currency swaps are structurally the same, CSA are commercial transactions driven by comparative advantage, while central Bank liquidity swaps are emergency loans to overseas markets.

Q. No. 05 : The trend of currency swap is rising among developing nations. South Korea signed an agreement with Japan and China to enhance size of the agreement for currency swap. Your comments:

China has multiple year CSA with many ASEAN countries such as South Korea, Indonesia, Malaysia, and Singapore, while it has also signed CSA with Argentina, Iceland, and of course, with Pakistan. Yes, South Korea and Japan also have a CSA. It is in the long-term interest of developing countries to adopt this option as it would lead to better and fruitful management of foreign exchange resources. However, it must be stated that the cost of CSA is higher but the advantages outweigh the negative impact.

Q. No. 06: The Chinese Central Bank agreed with SBP to swap 10 billion Yuan ($1.6 billion) for 140 billion Pakistani Rupees. Your comments:

This agreement is a trailblazer initiative and signing of CSA with China is in the larger interest of Pakistan. The Chinese and Pakistani Presidents have envisaged bilateral trade to exceed US$ 15 billion within a few years. In 2010-11, bilateral trade was US$ 5.789 billion consisting of Chinese imports into Pakistan of US$ 4.144 and exports from Pakistan of about US$ 1.645 billion. Therefore, it is essential for Pakistan to enter into this agreement. Pakistan needs critical mass in financing what would most probably be huge imports from across the border. The bilateral Currency Swap Agreement signifying the limits of 10 billion Yuan and Rs 140 billion (about US$ 700 million ) is basically for the objectives of further promoting bilateral trade and investment and strengthening financial cooperation. Pakistan must continue to emphasize the essential need for CSA with other foreign trading partners as there is this positive hope that it would be beneficial for the country’s trade, employment, and economic prosperity.