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Pakistan needs FTA & US trade not aid: Eliminate tarrifs on textiles etc. to win war on terror

Mr. Shaukat Tareen is a Citibank trained banker, a protege of of Prime Minister Shaukat Aziz. Mr. Tareen is a no-nonsense banker who has worked in one of the best multinationals of the world. He has a good head on his shoulders and understands the basic issues at hand. Pakistan has a very sound banking system-a result of a some very heavy duty scrutiny and privitization during the last decade. The inefficiencies of the banks have been ironed out at great cost. During the 90s the Pakistani banking system was prone to nepotism and corruption. This was weeded out when the largest Middle East banks moved into Pakistan and cleaned house. Most of the banks were taken over and sick houses had to take tough medicine.

The current crisis was a result of the astronomical rise in fuel prices, a rising deficit and just plain inattention by the new government. While the politicians struggled with forming a government, and wrangled among themselves jockying for positions the deficit kept on ploughing through the $17 Billion in Pakistani Foreign Exchange reserves.

KARACHI: Shaukat Tareen, Pakistan’s top economic official, is known as a hard-headed straight-talker who loves a challenge. Which is good because the veteran banker might just be up against his career’s biggest — steering the country out of its most dire economic straits in years.

A balance of payments crisis has left the State Bank with foreign reserves of $3.53 billion, less than September’s import bill of $3.81 billion, and there is concern that without help, the country could default on a bond maturing early next year.

Analysts say it is almost inevitable the government will, however reluctantly, have to agree to an International Monetary Fund (IMF) programme.

Tareen was appointed the prime minister’s top adviser on economic affairs last month, shortly after he turned 55. IMF negotiators are likely to find him a tough nut.

Tareen joined Citibank as a trainee in 1975, after graduating with a master’s degree in business from Punjab University, where he majored in finance.

He rose to take charge of several banks and also served as chairman of the Karachi Stock Exchange before joining the government as de facto finance minister. He cannot be appointed a cabinet minister, as he is not a member of parliament.

Although Tareen has shunned politics throughout his career, Muneer Kamal, a colleague at Citibank, said he was not surprised to see his old friend join the government. No-nonsense banker at helm of Pakistan’s economy* Shaukat Tareen is known as hard-headed straight-talker who loves a challenge. Daily Times. Monday, November 10, 2008

As a result of the US attack on Afghanistan, Pakistan has suffered a lsos of $20 Billion per annum. This was calculated by the US DOD. In return Pakistan reeives about $650 million in aid per year. Under US law, half of the $650 million has to be spent in the US. One fourt of the $650 million is spent on adminsitrative and logistics. The 25% that finally makes it to Pakistan is handed over to the US Ambassador’s favorite NGO. Almost none makes it to the people it was intended for.

Pakistan provides four airforce bases and logisitical support for the US army and airforce. 70% of the American supply chain is supported by Pakistan. For this huge support Pakistan has received about $750 million per year.

“Most people would run away from the sheer weight of responsibility but Shaukat’s not that type,” said Kamal. “If he feels it’s a challenging job and he can do something positive, he won’t be shy.”

A stocky man with a moustache, Tareen once told the New York Times he was most proud of building up the business at Citibank, where he also worked in the Gulf and Thailand.

“Citibank was where I learned all about banking and my experiences there laid the foundations for my career,” he told the newspaper in an interview.

At the request of the government, he took over as chairman and president of Pakistan’s largest bank, Habib Bank, in 1997, turning it around from a $230 million loss in 1996 to a profit of $30 million in 1998. He had similar success at Union Bank, which he took over in 2000, making it one of Pakistan’s top banks in five years and preparing for its sale to Standard Chartered Bank.

Old colleagues speak of a no-nonsense style and attention to detail.

“He’s a very aggressive person and he means what he says … he’s very blunt,” said one banker who worked under Tareen at Saudi Pak Commercial Bank.

“He has a deep understanding of finance and with numbers he’s excellent. It’s almost as if he has a photographic memory,” said the banker, who declined to be identified.

Despite the gruff manner, colleagues say Tareen has always been fiercely loyal to staff, and they to him, and has always been able to attract top talent to work with him.

Another old friend and colleague said Tareen’s political masters would be wise to leave him alone to get on with the job.

“He has the ability and the capability to deliver provided he’s given a free hand. Otherwise he’ll simply get frustrated and resign one day … He does not ever succumb to pressure.”

Tareen was born in Multan, where his father, Jamshed Ahmed Tareen, was an army doctor. The elder Tareen has no fears for his son in the tough negotiations he faces.

“He’s honest and an honest man is always a little braver. If you have some credibility then you can negotiate with anybody,” he said.

An occasional golfer, Tareen is married with three children. reuters. No-nonsense banker at helm of Pakistan’s economy* Shaukat Tareen is known as hard-headed straight-talker who loves a challenge.

Rupee News has repeatedly pointed out that Pakistan needs trade benifits. This has not happened. The Reconstruction Opportunity Zones (ROZ) have not materialsized.

MARDAN: Adviser to the Prime Minister on Finance Shaukat Tarin said on Sunday that people involved in the illegal transfer of dollars would be brought to book irrespective of their influence.

�If any political bigwigs were found involved in the scandal, they will also be punished in line with the law,� Tarin said while talking to reporters after attending the chehlum of his father-in-law, Pir Fazl Hassan, here on Sunday.

At present, he said, we did not know the exact amount of dollars transferred, but computers and other information had been taken into custody during raids conducted against the suspected persons.

The adviser said the biggest challenge for the present government was to stabilise the spiralling prices and to provide relief to the masses. He said the government had started work in the right direction and people would see improvement in the situation within the next six months.

He said the inflation rate was currently 25 per cent but steps were being taken to provide relief to the people as the prices of petroleum and ghee had been brought down. He said the government is expecting an increase in the production of wheat this year, due to which its price would also plummet.

To a question, Tarin said the IMF had not imposed any condition unacceptable to the government but it only asked the government to stick to its planning during the next two years. About measures for dealing with the economic crisis, he said talks were held with China, the UAE and Saudi Arabia and they would now decide to provide Pakistan assistance in the shape of oil or cash. Daily Times. Monday, November 10, 2008, Monday, November 10, 2008, By our correspondent

In earlier decades, Southeast Asia and Central America used labor-intensive exports to create jobs, promote economic growth and defang radicals. Pakistan should be able to do the same. Though it is a small exporter, it has an efficient textile industry. Household linens earn most of the hard currency Pakistan uses to buy food and fuel, and are good job creators – each container full of towels puts 500 urban residents to work.

Today, though, American trade policy hurts these industries more than it helps. Tariffs on Pakistan’s goods are far above those imposed on products from affluent countries. To choose a simple example: Pakistan’s towels and T-shirts trigger 7.5 percent and 19 percent tariffs, while tariffs on Sweden’s cars and airplane parts are only 2.5 percent and zero. So last year, Pakistan’s $3.6 billion in goods exported to the U.S. faced a $365 million tariff penalty – almost three times the $142 million penalty on Sweden’s $13 billion. Why this perverse outcome? Lobbying campaigns have kept U.S. tariffs on the textiles Pakistan makes much higher than our tariffs on rich-country goods. To make matters worse, our exemption of most African and Latin American towels and shirts from tariffs puts Pakistan at a disadvantage against its direct competitors.

The logical step is to give Pakistan a break. Waiving tariffs on Pakistan’s millions of towels and shirts – and soccer balls and everything else it makes – could boost urban employment, help Pakistan’s government cool the political temperature, and thus help the new democratic system succeed. A trade-first Pakistan policy: Instead of more aid increases, U.S. should drop high tariffs on clothing, leather and textile industries By Robert M. Hathaway and Edward Gresser September 26, 2008

Noticias de Rupia | Nouvelles de Roupie | Rupiennachrichten | новости рупии | 卢比新闻 | Roepienieuws | Rupi Nyheter | ルピーニュース | Notizie di Rupia | PAKISTAN LEDGER | پاکستاني کھاتا | DefensebriefsIntellibriefs Translate this page on to one of these languages: Subscribe to our RSS feed: | RUPEE NEWS | November 9th, 2008 | Moin Ansari | معین آنصآرّی | اخبار روپیہ | Save/Share

Filed under: Current Affairs, Pak CA | Tagged: Finance, Pakistan, Shaukat Tareen