Trade, can it Herald Peace?

When I read this article, for some odd reasons I felt the author is under too much influence of media and especially Indian media, nevertheless I will try and hint at the real factors which restricted Pakistan to grant India MFN status.

But prior to that, I would request the readers of any media to please do their own research before getting ``influenced`` by the media as it is - though I still doubt many would as the world is under influence at this moment in time....

Few days back I was reading an article in Australia on the same topic by an Indian author. He made a point that it is lack of proper word translation of MFN in Pakistani language Urdu, which has created problem of not granting MFN status to India by Pakistan...it was amazing how this type of logic is accepted by media and allowed to get printed. On top of it now I am reading through this article that Manpreet Singh Gill, a graduate of Delhi School of Economics, cites conflicts of interests as the main reason, and that the army is powerful, and lots of other big problems exist in Pakistan. Conflict with India is something the army needs to justify its own existence, and something the government (whether civilian or army) can use to divert attention from domestic problems...again a time-tested practice”.... Both of the logics - driven by journilist or the graduate scholar from the School of Economics in India are talking out of ignorance, at least in this matter, which is resulting in nothing but ignorance.

Let me give you a glimpse of the truth behind not giving India MFN status... Out of many facts, I would place just 2 here for the readers, the rest can find in the report in WTO library, I being part of the team have limitations to reveal all.


1. Granting MFN status to India was not fair for Pakistani industry and highly favourable to Indian industry. MFN implies that you extend the same trading mechanism to the new trading country, which you are extending to other existing trading partner countries. Thus if country A is manufacturing 4 items and country B manufacturing 3 items both should be allowed to export freely to each other market. However, if country A tell country B that you can only sell me 1 item as other 2 items are on restricted list as per country A economic policy, country B will be at disadvantage and it would not be fair trade..

This was exactly the scenario between Pakistan and India. Problem was that Pakistani economy was an open economy as compared to the Indian economy, and had little restricted list as compared to Indian restricted import list items. Thus what import restrictions had been placed by the Indians to other countries for items such as automobiles and air-conditioning, those restriction were to be exercised on Pakistan as well, thus restricting Pakistani exports to India; India for sure was happy with that and conferred MFN status on Pakistan. On the contrary Pakistan being an open economy had no such restrictions, thus would have left its market open for Indian manufacturers to export to Pakistan whatever they were manufacturing. The Pakistani government was not happy as it would open its doors in full for Indian exports and still unable to get for its own exporters the Indian Market due to Indian policies of restricted imports - naturally, the government was reluctant to grant India MFN status.

Pressure was still there from some of the manufacturers in Pakistan that were of the view that Pakistan can benefit more as they will be exposed to a larger market as compared to Indian exporters, however in this case the gains would have been highly skewed in favour of large manufactures, and the small scale would have confronted a shut down situation in Pakistan. Medium scale manufacturers, in Pakistan, were nevertheless also eager to open trade as well but with one condition that there be a level Playing field; being an open economy Pakistani products were superior to Indian products as they had to compete with international products as compared to India where manufacturers were shielded behind import restriction, was the opinion of these manufacturers (an air-conditioning manufacturer informed that his product is being sold 2.5 times the price in Pakistan in black market of India!).

2) Cost of Inputs: Indian government was heavily subsidizing its industrial electricity as compared to Pakistan that was competitive like Western countries. The average per unit comparative cost of electricity unit in India at the time of study was less than a rupee, whereas in Pakistan it was close to six rupees, thus denying the level playing field to the two countries manufacturers!

...I think I should stop here with the message that yes any thing whether its trade, sports, negotiation - all is nice if it is fair

Regarding illegal trade, it would have been balanced approach, if the author had mentioned the export of sugar, wheat, rice, plastic products in exchange of Paan, liquor, etc from India, or Pakistani rice being exported as Indian rice from the ports of Dubai...

harimau -- both are pretty bad

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Ref omar_r_quraishi #131

[if you havent noticed with chowk, the article could be something as apolitical as a concert review and nine times out of ten it will descend into a pakistan vs. india thing -- ]

Daler Mehndi is better than Junoon.

india and pakistan can never coexist peacefully and that is the sad truth.It is imperative that the two nations do not engage each other and continue to lead their individual destinies as circumstances arise.I`m from the southern part of india and north india is as alien to me as pakistan or bangladesh is and i had an open mind where pakistan is concerned.But having interacted with pakistanis not only in person but also through various interactive forums, i have to say nothing good will become anyone or entity that tries to engage in any meaningful dialog with pakistan or pakistanis.My north indian brothers might have sentimental attachments towards pakistan but indians in the south don`t and therefore if objective people can be put off by any kind of interaction with pakistan then why should india even bother to engage in any kind of dialog ...remember the maxim ``let sleeping dogs lie``.....

aman -- thanks for stepping in -- btw if you havent noticed with chowk, the article could be something as apolitical as a concert review and nine times out of ten it will descend into a pakistan vs. india thing --

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my message #128 was to RanaJee specifically...

the ugly schocking face of pakistan has already been displayed for the whole world to see..your country is the pariah of the muslim world,tolerated by the arabs as long as you were willing to do their dirty work(terrorism) for them and now beholden to the americans for your basic survival after getting caught...the ``shining`` face of india was displayed for all last week when we once again exercised our constitutional right...show me a nation where the head of state and head of government are from the minority communities....and, you sure you the son of your biological father, `cause there are way too many arabs and americans traipsing across your land....just checking, since you asked me...

#119 by niranjan & # 120 by arjun_m
Listen, if I start showing you the ugly/shocking face of India, if you are son of your own biological father you will never dare to write against Pakistan on these petty issues like Dust, Beggars, Taxi Drivers or day dreaming to create BD etc. and better try to analyze why India retreated its troops from Pakistan border last year.

I am in favor of fair trade with India and I have practically tried to do business with India. I told you the reason for my product not being exported to India was its high price. I did not contempt India and open heartedly accepted the non-competitiveness of my product in Indian Market.

But it looks I unintentionally put my foot on your tail (in your front side).

I am still in contact with Indian Importers and may get a chance to enter Indian market, but the way you are behaving you will never be able to persuade anyone in Pakistan.

agree..however, it is impossible to engage in any meaningful dialog with pakistanis who always seem to have a chip on their shoulder ,especially when it comes down to bilateral issues.India is the biggest nation in this region, is a big player in the international world and should be given its due.At the same time, india should try to accomodate pakistani concerns while engaging in a meaningful dialog on trade.The day the paki acknowledges the desi and vice-versa without bringing out the negatives before the positives ,will be the beginning of a meaningful relationship between the two nations.

hi all,
through this piece my intention was to initiate a meaningful debate... however i find that the debate has largely been acrimonious...please do debate but do so in a civilised manner
aman malik
author of the article

#115 -- asfand man, forget it, you`re talking to a bunch of mostly sorry-ass losers (paki-bashers) on this board -- they will misinterpret and misread everything you say --

#121 ...dude..what are ye tripping on man??..gimme some...the world has gone crazy...why are we indians even discussing trade with pakistan....i wish all ye pakis would get over this ``muslim`` thingy man...it is a religion , one of the many means to go to ``heaven`` etc. etc., but let it be just that man,...who cares whether muslim library books fell into the hands of the magna carta people...the magna carta people beat the asses out of the allah-o-akbar people and sent them packing to africa...simple as that man...to the victor goes the spoils..stop crying over spilt milk man and chill....hey, there`s an Ispahani shopping mall in chennai,(madras) ..u related to those folks..??.In conclusion, man i wish the new roman catholic queen of india will just unleash her hindu/muslim army(with approval from your american overlords, after they`re done with you lot ) and do a bangladesh on your pesky little country man...save us indians a lot of bother...ye are like pests that refuse to disappear man...stop being so obsessed with india man....

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ranajee...sour grapes...if you think there far better markets for you other than indian then why are u engaging in this discussion.typical paki bragadaccio, eh?.truth is no one wants to trade with your country nor even knows it exists.if they do bother to know thy`ll find out it is one big terrorist training camp and shudder and keep away,like they are anyways.``shining india`` was a bit of a stretch, but don`t ever underestimate us indians regardless of race or religion.when the going gets tough we get going.and don`t underestimate our new PM either.If she can give an old lion like vajpayee a drubbing then watch out.it was the congress govt. that initiated reforms and they will continue.Distribution of wealth my ass....how about all those beggars,women included(disgrace) that accost you when you exit Lahore`s railway station...how about all those oily, fat pak-punjabi matrons being driven around in american money paid-for used high-end cars sharing their ill-gotten gains with urchins that play in the wretched open-drainage filled, dusty streets of your country?.Please grow up and face the facts.YOU AND YOUR COUNTRY ARE IRRELEVANT AND SOON WILL BE EXTINCT.

#98 Veeresh Ji aka Ultra Patriot, you did not response to my post #66. If you have to response, response completely. No runaway.

#105 by ballukhan ``you run to those countries where you can fleece the poor in the most effective way``.

ballukhan it looks you know nothing about business, go and first learn some business basics. Fruits are daily sold in Market through auction. Only best quality fruits can earn us best price. Fruit is a product which we can not stock for long and can not force the Consumer to pay high price.

#109 by jang Imported fruits from New Zeland, S America etc? please give me some Brand Names? Some times when our fruits are on their way to Tashkand, due to some problems we are forced to sell them in Kabul - Mazar-e-Sharif on through away prices. But it does not mean that our destination market was Kabul or Afghanis start claiming they have imported fruits.

#112 by niranjan, Feel Good - India Shinning, hahaha, all this crap is exposed in these elections. Look what happened to Mr.Naidu.

This is not just the size of the economy it is the division of the wealth which matters more.

#111 by arjun_m I revealed my own experience and the facts and if facts show your face ugly, it is not my fault or fault of ``indoctrination by the Pakistani establishment`` or ``Pakistani Education System``. I gave facts and, if you can; prove them false.

The point was ``India is not the Ideal Market for my products and I have better markets than India, we are not dying to do business with India, ok``

Veeresh ji, Regarding Chinese Pears, yes we do import as they are not available locally. We also import Black Grapes especially during holy month of Ramazan via Sost-China border and what is wrong in this?

Indian made components in Pakistani vehicles? Though Mr.Omar has comprehensively proved your claim false, yet there is nothing wrong if Indian made components are being used in these vehicles and for the time being we should purchase them directly as Pakistan Automobile Vendor industry has just now strengthened and gradually it will go for 100% indigenization.

But if you think or insist that Pakistan should open its market for Final Stage Indian Products like Cars, Buses, Cloths, Packed Tea etc. etc., sorry it should not. Yes there can be joint ventures to establish industries in Pakistan but no readymade product from India.

Arjun_M

Please read my post again. That was a cut and paste job. I said it on very top of the post. The comments were not mine. The author`s name is on the very bottom of the list.

I am niether endorsing nor rejecting the comments by the author. I posted it because I thought there was some relevency on the topic.

Your comment:

``Third, as epitomized by Urstruly, Afsand, Romair and Ahmadzai, there is infinite emotional hatred against India. Better to be poor than to trade with India. Better to pay out more to Muslim countries and to China than buy from India.``

You got me all wrong. I said quite the contrary. Please read my earlier posts. Pakistanis are already using Indian products like TV programs, Movies, Paan, and Paan masala etc. So if more Indian products come to Pakistan as cheaper alternative the Pakistanis WILL DEFINATELY buy them.

There is no ``infinite emotional hatred against India`` thing anymore. The recent cricket matches between Inida and Pakistan shows that. Please read articles by Vir Sanghvi and other Indian journalists on hindustantimes.com and timesofindia.com.

Indian products will be welcome if they are cheaper and better quality.

to all....i`m quoting CNN from an article on the indian economy dated april 21, 2004.....

`India ranks as the world`s 12th largest economy--and the third largest in Asia,behind Japan and China, with a total GDP of USD560.00 billion.Agriculture accounts for about one quarter of that figure``

Why are we indians even engaging in an economic discussion with residents/nationals of a failed feudal dictatorship that has no GDP,no stock exchange(i have known more godowns in india bigger than the PSE building) worth a piss.I MEAN, WHY???.And some of them have the balls to pontificate to us about the indian economy!!!!!.Yes,india has problems( who doesn`t), but look who`s throwing stones.And, to ranajee, all ye got to export from your country is fruit,the edible and the two-legged ones.Oy ve, try getting those Central Asians to pay up when you send them your invoice.Phew..they`ll chew the invoice and screw the two legged ones ye send them.

Its` time India did a bangladesh on the western front and put an end to this nonsense.Chowk is a great site though.The exception always proves the rule.

to all pakistani participants...methinks you guys don`t realize how big and diverse india is.so here is a brief intro to india from the encyclopedia dictionary....

The Republic of India, located in south asia and comprising most of the indian sub-continent,and islands in the indian ocean, is the second most populous country in the world and is the world`s largest democracy, with over one billion people speaking more than one hundred distinct languages.The indian economy is the fourth largest in the world, in terms of purchasing power parity.India borders Bangladesh, Myanmar, China,Bhutan ,Nepal and Pakistan, with SriLanka and Maldives just across the indian mainland in the indian ocean...

This is in addition to my earlier post.Pakistan`s GDP last year was USD54.00 billion.psftt.What a waste of time for any indian to engage in any discussion on trade with pakistan!!!!!!.Politics, religion, entertainment etc.yes.Definitely not trade.Hey, i like your arrogance though.It knows no end.keep it up.

dost-mittar #107
``The dark cloud is the insistence of the communists on putting a brake on the disinvestment process. There, I think that the threat is real!``

Very much so.

This comment might be premature, but it will be a big relief to revert to being just an Indian and nothing else, after this past wearisome period of one`s religious identity being considered foremost in every issue, whether primary education or the economy or law and order (TNT-style as ballukhan points out).

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Ref dost-mittar #107

[As far as I know, Sonia gets her economic advice from Manmohan Singh and Jairam Ramesh and they are both quite sensible guys.]

Jairam Ramesh is an idiot. Let us not confuse being articulate with being intelligent. Just because that man used to be on ``The Big Fight`` on TV and used to write a column in ``India Today`` that doesn`t make him anything less than the idiot that he is. He is just facile with words and quick to come up with irrelevant statements to confuse others.

[The dark cloud is the insistence of the communists on putting a brake on the disinvestment process. There, I think that the threat is real!]

India`s total external trade is 1% of the world`s. We can see that going down to zero!

What a pathetic bunch of losers!

There are three issues here. First, Pakistanis are showing the genuine fears that many Indians shared pre-liberalization. And some Indians continue to share. This is a human response - fear of the bigger. Fear of being run over.

Second, opening up to India will be the last blow, the death blow to all that the authorities in Pakistan have worked hard to construct - a make-believe world of wishful geography and falsified history. Their very basis of power, the justification for their existence in the minds of ordinary Pakistanis, will come crashing down. You don`t expect the Pakistani establishment and their progeny to let that happen, if they can prevent it, do you?

Third, as epitomized by Urstruly, Afsand, Romair and Ahmadzai, there is infinite emotional hatred against India. Better to be poor than to trade with India. Better to pay out more to Muslim countries and to China than buy from India.

These are very very strong motives. Many people in Pakistan realize the truth obvious to many Indians now in the post-liberalization period - trade between two countries, between India and Pakistan can be good for both countries. But the roadblocks to that happening are so strong that Indians shouldn`t waste their time trying to convince Pakistanis in power (ordinary Pakistanis are already convinced). Ladies and gentlemen, it is not worth it. Pakistanis in power will trade with you when they are intellectually and emotionally ready or when Pakistani people have won back the freedom they lost when Jinnah died.

RanaJee

Mumbai street markets are full of fruits from New Zeland, S America and China. Yes with the ``Dole`` lable on each apple. So your fruits will be welcome if they are as competative as those from New Zeland.

And YKK zippers (from singapore) were always imported as long as i can remember.

sadna:
Only time will tell what is going to happen. I would like to think (hope!) that after the initial excitement is over, the usual good sense will prevail over those entrusted with the responsibility of governance. To the extent that the NDA govt. gave the perception of a govt. of the rich - I think that they actually did more for the poor than the earlier govts- the new govt. would do well to correct that perception. But I think that Manmohan Singh or Chidambram will continue the policies that they followed when they held the finance ministry earlier. As far as I know, Sonia gets her economic advice from Manmohan Singh and Jairam Ramesh and they are both quite sensible guys.
The dark cloud is the insistence of the communists on putting a brake on the disinvestment process. There, I think that the threat is real!

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#103 by RanaJee on May 13, 2004 10:32pm PT

Forget this subsisidy excuse- you guys are used to huge margins in trade- you cannot compete in India- that is why you run to those countries where you can fleece the poor in the most effective way.

Losers!!!

Daewoo-Tata Motorway, surprises I have never heard or read this term before. But yes little children do use the word Ta Ta or Tai Tai. Veeresh ji its time for Juma prayer so Ta Ta i.e. bye. (humm, this word reminds us of our childhood days)

I am a fruit importer-exporter from Pakistan. Impressed by the mouth-watering term of OBPM (One Billion People Market) of India contacted fruit sellers of India. Their response in simple words was ``Pakistani imported fruits are too expensive compare to Indian and here people cant afford them``.

This tiny subdivision of Punjab exports Kinno-Mandarin of worth 35 Million Dollar per annum and this can be increased manifold if Pak Govt. start giving subsidy as Indian Govt. gives to its farms and making their product very cheap.

Our main fruit market were Middle East, Far East and Europe, but now by the grace of Allah, this year we found a new and huge market i.e. Central Asian Republics and Iran. So we fruit exports see no charm in OBPPM (One Billion Poor People Market) of India.

re: asfand
re: Romair

It is better for businessmen from the two countries to instead work together in joint ventures and target the US and European markets (where arbitrage is bigger because of price differentials) instead of cannibalizing each other`s markets and jobs.

If we really want to create a free trade area in South Asia, we must first set up the regulatory infrastructure to ensure that free trade results in overall economic efficiency for both countries. Free trade must be accompanied with an expansionary monetary policy (low interest rates) and a regulatory framework that prevents an Indian firm from entering the Pakistani market... and then quashing all competition. Anti-monopoly policies are also necessary to ensure that free trade results in overall economic efficiency. Trade liberalization is a good thing in the longer run.. but it must be done very slowly and has to be accompanied with a regulatory infrastructure.

Thirdly, it would be a good idea to expand SAFTA to include Iran and Afghanistan. The former has natural gas and oil reserves that can help reduce the petroleum prices in South Asia. The latter has large mineral reserves and can serve as a transit to Central Asian goods. (Given their potential economic benefits, we really shouldn`t be splitting hairs on the question whether these countries are part of South Asia or not).

#96
My response was with respect to your comment:
``While Indians are eager to do business with Pakistan there is little interest in doing business with China``

Have you changed your mind on this point? If yes we can proceed further.

Now with repect to trade distortions/restrictions I dont think there is any doubt that India still remains protectionist to some (large?) extent. There is a whole system of ``countervailing duties`` and India last year initiated 15 anti-dumping actions against China last year. I believe that large parts of this system are illogical and hurts competiveness (internal and exports).

But on consumer goods I think there has been change, there are large number of Chinese consumer goods being sold in India, see:
http://www.atimes.com/atimes/South_Asia/EB15Df01.html

In other areas Chinese imports have caused some major shifts, in the pharmaceutical industry there are large number of small units in the Tarapur belt in Maharashtra and in Gujarat. A lot of these units went out of business, particuarly in the bulk pharmaceuticals sector. I personally was involved with a streptomycin plant that had to shut down. But, the survivors have innovated, they moved to flexible manufacturing constantly moving between several different products.

Similarly, I remember few years there was a big deal about Chinese motorcycles being sold in India, how they would blow away the market with Rs 25,000 bikes. But they could never make a dent in the Indian market on the contrary Kawasaki/Bajaj sells bikes in Indonesia, Phillipines etc. This is not due to any protectionism but because the industry is globally competitive.

I have a Senegalese friend who came back from a trip home and said that buses in Senegal are now made by TATA which assembles them locally. These are slowly replacing the old IVECO/Renault buses (imported 2nd hand from Europe) on the roads there. TATA vehicles are cheap to manufacture and maintain and are built for 3 world roads, India has a wealth of such ``3 rd world oriented`` technology. TATA`s acquizition of Daweoo`s heavy vehicles division is to break into the Chinese market.

So the picture isn`t all black or white with India. About Pakistan I dont have the slightest clue.

``India is definately doing better business with China but on limited list of items``
No, India is doing well on exports to China because of the large demand for raw materials in China. Major Indian exports are steel, iron ore, plastics, basic chemicals. So yes there may be a surplus now but it is not a ``quality`` surplus and quite vulnerable if growth slows in China.

And yes zippers in India too are chinese, happy :-)

Romair 99 . . . this conclusion was arrived at after having observed Pakistan and Pakistanis for the past 25 years.

In addition, this being the land of my forefathers, I think I speak with some amount of first-hand knowledge as well as inputs from those who did live there at one time.

vereesh #98: ``I think Pakistan, with a couple of years of decent governance, could supply a whole lot of products utilising ground level basic enginering skills. Both design and maintenance.``

``I did observe during my short trip to Pakistan, an attention to detail as well as pride in work, on the streets and at ground level.``

Have you done a study on this? Or is this conclusion based solely on some observations you made on the street and at the ground level?

Ranajee #77 . . . as of now, (apart from supplying Pakistani soldiers to be commanded by Indian officers as suggested to me while in Pakistan by more than a few Pakistani soldiers), I think Pakistan, with a couple of years of decent governance, could supply a whole lot of products utilising ground level basic enginering skills. Both design and maintenance.

I did observe during my short trip to Pakistan, an attention to detail as well as pride in work, on the streets and at ground level.

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#89 by asfand

Indian markets are open to chinese goods and indian consumer goods are competing just fine after some initial flooding. In bulk goods (some chemicals etc) chinese imports are far cheaper. Consumers poor quality goods are chinese but good quality are mostly prefered from local companies (brands). The biggest surprise was in steel and ferrous alloys. There is a furious export in that area to China. Also, an interesting thing is even small-time indian manufacturers seem to be opening manufacturing shops in China and becoming expert consultants as shop-setting agents. For example, I know a company, which used to make import sub. chemicals. With globalization, that business went bust, but the company has grown and is thriving with expertize in setting up plants in china. Apparently English really helps when you need to buy phoren machinary, and the chinese (or whoever is setting up the shop in Guandong) are happy to get a firm take care of stuff fast.

Needless to say, poor quality yet expensive local stuff is history.

Bongdongs:

Lets not mention the cave issue here. I love the cave I live in.

Does India has engaged in open trade with China?? In that case you would see even zippers coming from China too. India is definately doing better business with China but on limited list of items. Trade between India and China can not be labled as free trade meaning ``no holds barred`` import export both ways.

Trade between China/Pakistan has less restriction. So in Pakistan you will find zipper that is made in China because it is imported at much cheaper rate then being produced locally.

India is a different story. Yes there is imports from China but with tarrifs and import duties. Just check the prices on VCR, TV and other electronics in local Delhi markets and try matching these with the same items available in Pakistan. You will find huge differences where Pakistani prices are less then Indian prices. This pertains to zippers too.

NOW try competing in this market. As I have said earlier, India definately has an edge over China in certain areas but if you are thinking to sell Indian made VCR or TV or Cell phones AND the infamous zipper (needles included) then you have to come out of your ``cave.``

Try opening Indian market with unrestricted business with China like Pakistan and you will see that only few industries will survive.

Why Pakistan has opened its market to China? Because in Free Trade world the old English saying stays ``Penny wise pound foolish.`` If I can get an item cheaper from outside why should I make it here. USA is prime example. Can usa make the infamous zipper? YES it can but since it is available cheaper from China, lets import it from there.

But does that mean I have to import every thing from China. NO, I have to find an edge on items that I can produce cheaper and better. I f I can do that and surpass Chinese products then that means I now have gained an edge and I can export it to any country engaged in free trade and make money like USA.

So in a close heavily tarrifed market like India people will end up buying bad quality expensive zipper just beacuse India do not want to compete with a superior country and India has less initiative to work hard and smarter. Try exporting that zipper in Pakistan and try to compete with China. The answere again is anybody`s guess.

Now why so many of the multinationals are so eager to do business with India? Simply because it is ONE BILLION people market. AND the market will open up eventually. If India can find an edge by then in industrial market then truely India wins. If not, then just think what all these multinational companies want? Better profits period.

Asfand

Pakistan needs to open up all trade with India. If for no other reason, than because that is the only way Indians will learn enough about Pakistan, to get rid of their biases, and eventually agree to compromise and make peace......

I am not an economist, so I do not know the details of which market in Pakistan will go under if trade happens. But, I don`t think it looks too bad at an abstract level.

Why do Pakistanis feel such an inferiority complex vis-a-vis being driven out of business by Indians? So far, Pakistan has done alright in terms of running private enterprises in South Asia. Pakistan`s experience in privatization started a good 30 years before India`s.

The only are where I have seen India just overwhelm Pakistan, on the basis of natural talent, is the film industry. And that maybe because making films in Pakistan is still considered somewhat of a vulgur profession. While making music is not. And in the later category, Pakistan has done well vis-a-vis India.

Pakistan exports are based on textiles. This year, Pakistan experienced around 15% industrial growth, and 15% export growth. Textile exports should cross 10 billion dollars soon. How does Pakistan compare vis-a-vis India, in textiles? If that area is alright, then the rest of the areas should do ok.

There are two areas due to which Pakistan is bound to benefit far more than India. One is the geographic location of Pakistan, and the second are the large neighboring markets that Pakistan has. India has to go through Pakistan to get access to resources. Much like Pakistan has to go through Afghanistan. Pakistan does not, ``have`` to go through India to get to anywhere important. China and the Central Asian countries have to go through Pakistan also.

So Pakistan is bound to benefit from any growth that occurs in these two countries, even without doing much, just through the pipelines, etc.

Secondly Pakistan has the two biggest markets, China and India, as its neighbors. Just the tourism from India alone would create a boom in the tourism market. And there are bound to be things that Pakistan will outcompete India in. It cannot compete in terms of quantity, but it can, in terms of quality.

Those who underestimate Pakistan`s businessmen need to come take a look at the Agha Khani community in Toronto. I am slowly getting convinced that Agha Khanis, Memon Bhais (and whomever runs the Karachi business community) can outsmart the shrewdest of bania and even Jews.......

If you take the average economic growth from 1947 to today, Pakistan is quite a bit higher than any country in SAARC (not sure about Sri Lanka). And significantly higher than India`s, even though India has always had huge advantages over Pakistan. So I don`t think there is too much to worry about......

86 asfand

You have a point. Whether India can be ``next China`` - only time will tell.

But one thing is for sure - India has a long way to go. It has got mountains to climb. I feel that India hasn`t even scratched the surface. More and much more Infrastructure has to be built in war-footing. Power situation is grim.

Unfotunately - the gov`t that seemed to be doing just that - lost the election......... Naidu - a leader of immense foresight lost too........A guys who promised free power got his place. .....Left parties have become king makers. An political novice paraded by a kitchen cabinet of worthless individuals is slated to become PM.

GOd help India.

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#89

Which cave did you crawl out of?

asfand:
``While Indians are eager to do business with Pakistan there is little interest in doing business with China``

http://inhome.rediff.com/money/2004/may/12china.htm
``India-China bilateral trade is set to establish a new record this year by crossing the $10 billion mark...in 2003, India-China bilateral trade touched a record $7.6 billion...``

And India actually runs a trade surplus with China as opposed to the $1 billion + trade deficit that Pakistan runs with China to keep its master happy.

asfand...i was in india last week and everywhere you go, you see chinese goods being sold at the bottom end of the consumer market from fake gucci bags to fake rolex watches and hey, it suits the low income consumer mighty fine.Before ye say anything , i`m sitting in the middle of 34th st. in Manhattan, ny usa and 2 blocks down they sell the same stuff and people here buy the same stuff and this is supposed to be the world`s richest country.Kudos to the chinese.I don` t see the infux of chinese goods affecting local retailers and manufacturers as in a country of i billion people you have a captive market straddling all stratas of society.And, remember India is not one homogenous lot.It is many countries within one union, each with their own cultures, markets, economies and practices.Pakistan will have to realize that before they can benefit from the economies of scale that a huge country like india can provide, learn about the different cultures of india and how to trade with each state depending on what product or resource to access.Open trade between india and china has benefited both countries without threatening each other`s business base.Ford ikon cars are exported to china from india and chinese 2 -wheeler cos. are trying to access the huge market in india.Such moves only spur competition and keep prices low while increasing quality.India has withstood many lynn carpenter`s to get where it is and she does make some valid statements but that doesn`t mean everything she says is true.There has to be a mix of services and manufacturing along withsound agricultural development to sustain a mimimum QOL for all.

#86

And yet IT salaries rose 15% this year in India, how do you square that circle?

India will dominate at both ends of the scale both $10/hr and at this:

read and weep asfand:

http://www.theregister.co.uk/2004/05/01/intel_whitefield_uncovered/

Since Pakistan and China are already engaged in active business particularly in Machinery and tooling for light to heavy industry, it would be interesting to see how India fits into this business environment.

The other interesting point is that Pakistan will become a test case for India to compete against Chinese products in durability, quality and price. Similarly since Pakistanis are already competing against Chinese products atleast in consumer products, Indian products should not pose a problem. There are however, areas where Indian products will definately face no threat, like durgs and possibly in vehicle manufacturing areas as already mentioned in the pervious posts specially (ahem) raidator caps as only Indian company makes it.

While Indians are eager to do business with Pakistan there is little interest in doing business with China. China is as large as India itself thus it should provide a better market. And did Indians ever thought os opening their market for Chinese products? What could happen is every body`s guess.

I will post an example that I heard from my Father`s friend. In mid 80`s this industrialist decided to set up a zipper making factory in Korangi, Karachi. After making initial calculations he found out that his cost of production will be around 36 paisa per linear foot and at that time the zipper imported from China C&F cost at Karachi was around 10 paisa per linear foot for the same specification zipper. He abandon the idea. He started to make rivits instead because he can produce them cheaper then Chinese made rivits.

I am all for India Pakistan business because I believe it will definately favor common man in Pakistan and lot of items will be selling cheaper. As far as ``made in India`` syndrome is concerned it is bogus. Pakistanis will buy cheaper products if India can offer it. We are already watching Indian movies (minus me from that list though) and Indian TV (minus me from that list again) and Indian Pan Masala, Pan, Bettle nut, katha, so on so forth. SO whats wrong in consuming Indian tires, tea (tetly or whatever), cars, trucks or whatever India can offer cheap.

The bottom line is that can India compete with Chinese made products and cheaply produced local products?

The answer is soon to be seen, I guess.

Asfand

Urstruly:
``The problem that when India has not played fair with us since Partition then what would make them play fair this time, comes next. But it is also a part of the problem.``

Since when has a bania -of any religion or country- played fair? All you have to ensure is that your `banias` have the same tools at their disposal as the Indian banias, let the banias fight each other and let the consumers benefit from that fight.
As for your rulers, they may have sold their souls to others but I think that they have a pretty good record of standing up to the Indians.

...and you should disabuse yourself of the notion that the bania has any other motive other than making money, especially `silly` notions like patriotism. Your banias were quite happy to sell sugar to India when the two countries were fighting each other, and the American bania has no problem giving pink slips to its own folks if he can save money by sending work offshore.

This is a cut and paste job. I guess it would be good article in the context of all the discussions going.

Asfand


INDIA - THE NEXT CHINA?
by Lynn Carpenter

The U.S. papers say China`s a blooming miracle. The Indian
press says China`s making the whole thing up. And the story
from those who search hard for the coming trend to write
about it first is that India is the next China.

Hoo-boy. Things sure have changed from the days when China
was going to be the new India. I`ve been looking at both
countries, and here`s what I think. India`s not the next
China. Not yet. Both countries have many risks, but China`s
emergence has a momentum and key support that India`s does
not.

It is interesting to read the Indian press reports. They
are replete with accusations that China is miscounting
ships in port, lying about its trade figures and fudging
the foreign direct investment numbers. They claim most of
this investment is Chinese money illegally sneaked
offshore, washed clean and then shipped back home as phony
`foreign` money.

China, in contrast, is largely ignoring India`s claims of
greatness. This may not provide numbers you can take to the
bank, but it is telling. Leaders don`t spend time whining
about how the laggards cheat. By contrast, India`s stance
strikes me as too much along the lines of, `I would have
won the marathon if they hadn`t had special shoes.`

China is the leader in this race for emergence right now.
The Chinese growth story is for real. Even if the Chinese
have overstated exports, as India claims, you can be sure
that the amazing numbers from Wal-Mart are a good cross-
check. Wal-Mart imports over $15 billion in merchandise
from China every year.

But what about India? Is it finally emerging from its
struggle to gain a foothold? Should we be looking harder
for ways to invest there?

Ah, if only we knew where to look!

India has been busy sending its companies global. Around
the world there are dozens of GDRs (global depository
receipts) and 144A companies. Americans can`t buy GDRs
easily. It generally requires an offshore account. As for
144A`s, they are limited to qualified institutional buyers.
That leaves us with the Level I, II and III ADRs. The Bank
of New York lists 13 such stocks.

Man... look at this crew! Talk about the not-quite-ready-
for-prime-time players. Seven of them have zero to negative
return on equity. Those that are profitable have ROEs
ranging from 4%-25%. But they also average a 39.8 P/E
ratio. There`s exactly one company on the list that I would
consider buying, if it were not so expensive at the moment:
Infosys. The others are modest businesses, with growth no
better than their U.S. counterparts, but much higher
valuations.

So far, the major business model for the more highly touted
Indian companies is: copy what`s done in the U.S., do it
cheaper, and ship it back to us. Innovation and R&D
spending are not robust. But journalists touting India seem
to be unaware of a fatal flaw in that plan. Not only are
the profits to be made selling cheap substitutes limited,
but it`s a plan all India`s fellow emerging economies can
copy. Taiwan and South Korea are already cutting into the
world IT market.

I`d rather find a sound business engaged in a more
sustainable market: capitalizing on the boom at home. A
good example of this is Sina.com or Sohu.com, the Chinese
Internet companies. Or CHINA UNICOM, the telecommunications
company that is gaining subscribers at home by the
millions, not to mention subscribers in nearby countries.
They`re not value investments today, but they are sound
businesses.

And Indian companies on these models? They`re in short
supply, and overpriced, too. That`s because India`s
internal progress still has far to go. India`s GDP may be
rising on exports, but it is not advancing on consumer
spending at home.

Quite simply... India has been on the brink of `emerging`
and becoming a world force about 40 times in the last 20
years. OK, I exaggerate, about once every two or three
years. But it never quite sticks. It`s not trustworthy yet.
India has not yet gathered China`s momentum. Or, as they
say these days, it hasn`t reached the tipping point.

India is still a story about billions of people hungering
to advance. That`s a spurious argument. It applies to
Africa as well. Wishes are not ability. What`s more, the
problems facing India are just as large as, if not larger
than, China`s.

China has heavily indebted banks and high unemployment in
its western provinces. India has high unemployment across
the country, but a much more advanced banking culture,
which would seem to give it an edge in the business world.
But it hasn`t worked that way.

China began courting Western business in the 1980s. It was
a rough beginning, fraught with high suspicion and
inconsistency. Over the years, China`s centrally controlled
government has become committed to privatization and
cooperation, as long as it doesn`t threaten central power.

India is still as suspicious of outside influences as China
was 20 years ago. It had a long history of domination by
the British that did its own people no good. But the big
difference between India and China arises from the years
when both countries threw Westerners out.

China, as a communist country, set upon a course to educate
and employ all its population. It came at too high a cost
to sustain, but it left a country where everyone had a
taste of success for a while and an entire generation of
well-educated students.

That never happened in India. Despite progress against
poverty in the 1980s, the trend began reversing again
during the early `90s, when inflation hit India. In the
1991 census, 38% of India`s population was again below the
poverty line. Not only are millions of adults illiterate,
but so are millions of children.

This creates a spiraling vicious cycle for India. It needs
progress so that it can afford to aid its own people. But
with so many of its people poor and untrainable, it is hard
to make that progress. India`s largest industry is
agriculture. Textiles come second. The vaunted IT sector we
hear so much about is a mere 3% of the economy.

The IMF recently warned that India`s GDP growth this year
is likely to be less than last year... and that it will not
meet its target 8% growth rate over the next several years
without major repairs to the physical and social
infrastructure. It needs roads, railroads,
telecommunications, training and education to proceed. It
must make daunting improvements within the country - in
poverty, literacy, energy and free access to improvement
for citizens below its small privileged class.

But the government is strapped. Its deficit comes to 10% of
the GDP (the United States` current record deficit is
roughly 5% of GDP). Its cumulative national debt equals 80%
of annual GDP. But when it comes to privatization, the
engine for progress and Western investment, India still has
strong, powerful resistance from farmers and labor trade
unions.

India`s lack of buying power at the ground level where
consumers live is astounding. Partly that`s the result of
its attempt to leapfrog from an agricultural economy to a
service economy - a model that excludes most of the
population. The true path to successful development wends
its way through industrialization first. It comes with
higher rates of education, literacy and health. And it
comes with heightened confidence on the part of large
international investors - as represented by foreign direct
investment.

Until the big boys put their money down, it`s not safe for
small retail investors to get in on the game. Foreign
direct investment to India just barely nudged up to $6.7
billion last year. That`s about what flows to Poland or
Portugal... though admittedly, it`s a great increase from
the $2 billion or less of prior years.

If you`re determined to catch a mainstream trend, catch the
China wave rather than India`s. As an investment, I still
much prefer China. An impressive portion of China`s growth
is coming from industrialization and consumer products with
both domestic and international appeal. It also has large
companies like Sohu.com and CHINA UNICOM that are growing
rapidly by selling goods and services at home and to its
neighbors in Asia. That`s a better sign of economic
vibrancy.

I think the current India mania is a dangerous bubble. So
are the main Chinese stocks at their current valuations. I
will continue to look for Indian companies that are good
values; one day India will make the turn, and I`d like to
be there.

For the moment, though, I don`t see much point in chasing
the Indian dream.


Regards,

Lynn Carpenter

P.S. Yes, yes, I know what you`ve heard: They speak English (ha! ha!
you can`t tell if they are speaking English or Hindi)
a lot in India, have cheap programmers, and this time is
different. India is about to explode.

But what kind of growth strategy is that? I`ll tell
you... one that every other country in Asia can copy as it
emerges.

Here`s something India touts forget to mention when they
talk about India`s educated masses of tech-smart labor. You
may have heard how cheaply India`s software programmers
work. And probably you were told it was a sign of India`s
growing competitive importance and success.

But consider: Ten years ago, Indian software consultants
were able to charge $70-$90 an hour to their U.S.
customers. Today, they are charging $10 an hour or less.
India is not winning the IT World Olympics. It is losing
economic ground every time it cuts its fees...

actually to all.....hot air.We all need to rah rah a bit once in a while.In person we might be civil and actually become friends.India`s next PM sonia gandhi says she will continue the peace process with Pakistan...Hey whatever pakistanis say about indians the proof of the pudding is in the eating...that sonia gandhi can aspire to hold the top executive post in Inida is proof that india is a more openminded society than most.I rest my case.The elections have now opened up a new round of discussions for all of us.Happy ranting, everyone.

Tauheed at # 56:

I agree with your assertion that pakistan will struggle with foreign investment.

It seems that you are laying the blame of internal insecurity of Pakistan on President Musharraf. I don`t think so. Lack of security is plainly attributable to terrorism and will take a long time to correct. There is no communal violence in Pakistan that can be addressed by e.g. bringing in the communal leadership and sorting out their differences through negotiations. The sectarian terrorists are not going to listen to anybody. It will take the Government technological and educational measures that will eradicate this menace in medium to long-term range. Unfortunately, we have to live under the burden of our follies of the years gone by for quite some time in the future.

Dost

You did not understand my point. I have no problem with trade or trade volume. My problem is internal i.e. unless there is a strong and independent legislature to protect the interests of farmers, producers, businesses, and consumers it will be an economic suicide for Pakistan to go ahead with SAFTA or WTO. How can a despot who raids his own people with an army of tanks and gunship helicoptres at the urging of foreign powers, be trusted with our financial future when he doesn`t know himself whether he would last another day or not.

The problem that when India has not played fair with us since Partition then what would make them play fair this time, comes next. But it is also a part of the problem.

Urstruly:
It is true that SAFTA or even open trade with India will have more impact on Pakistan than on India. My own prognostication would be that it would have a small negative short-term effect and a large long-term positive effect on Pakistan. If I were a Pakistani, I would also insist upon transitionary measures to assist those sectors in Pakistan which may be particularly vulnerable to Indian exports. But even if I were wrong, the argument you make of an already skewed bilateral trade with India is no argument at all for restricting trade with that country. It does not really matter if Pakistan is exporting as much to India as it is receiving. What does matter is what those imports are substituting? If imports from India are displacing local products, this would be one thing; but if they are merely displacing imports from other countries, then they do not cause any damage to Pakistani producers, and indeed could be saving Pakistan some of its foreign exchange if the goods from India can be had cheaper.

#80 by Urstruly

so now i get your real objection.

``The issue of SAFTA was never debated in National Assembly and despot and his cronnies signed it without taking the nation into confidence. Therefore it is the duty of every Paksitani to reject SAFTA and WTO.``

i agree with you there. no point doing any deals without a debate. so what you really propose is an inquilab, since there is no formal debate on anything at all.

indian interest in freer trade is mildly economic, more on security front, and with a long term hagemonistic (sp?) effect on the area (not a bad thing, we all will live happily, except not necessarily under a musalman rule, could be roman catholic).

Jang

Two reasons but neither is compelling or worth losing sleep over.

In todays newspaper there are two essays on SAFTA and trade with India. One essay that cautions us to observe restraint in business with India cites that in the fiscal year 2002-3 Pakistan`s exports to India were 70.6 mil US dollars whereas imports from India were 616.5 mil US dollars. And this is when SAFTA is three years away. Then he cites a case about a recent conference held in Islamabad by SMEDA (small and medium size enterprise development authority) where none of the participants in conference could tell what SAFTA stood for. Then he cited about another recent conference by ministry of agriculture where the news about SAFTA were heard with a jaw dropping surprise.

The second essay that supports the SAFTA agreement and seems to be towing the government line portrays it as one of the greatest human achievement in this part of world. After the usual sarkari emotional drivel when author comes down to building the case for SAFTA he elaborates it on as if SAFTA will only allow discretionary trade between the two countries. But SAFTA trade is not discretionary. It is an open border documented trade. He mentions that SAFTA would mean import of some chemicals and processed steel from India and also tea. He states that the average mutual trade between two countries is between 250 - 300 mil US$ whereas illegal trade between the two countries is close to 1.6 billion us$. He argues that SAFTA will help legalize this trade which is a 64 thousand dollar joke.

The fact of the matter is that government has continually shirking its duty to disclose the details of SAFTA and what it entails for the farmers, producers, and consumers of Pakistan. The issue of SAFTA was never debated in National Assembly and despot and his cronnies signed it without taking the nation into confidence. Therefore it is the duty of every Paksitani to reject SAFTA and WTO. Both of these attrocities amount to our national collective suicide. As long as there is taxation without representation, as long as there is no proper and independent legislative body in Paksitan that would not only look after the interests of not only the businessman but also that of manufacturer and consumer we the people of Paksitan cannot allow fauji dumbfucks to a collective economic murder of us all. Therefore it is imperative for all Paksitanis to support all those forces who promise our retraction from the attrocities of WTO and SAFTA but also the public executions of faujis.

``Humility goes a long way.``

Look who is talking.

``If one were to analyze the steps taken by each nation so as to bolster trade related ties, it would be clear that India has clearly accorded more sops to Pakistan and the latter’s reciprocation amounts to a naught.......The army is powerful, and lots of other big problems exist in Pakistan. Conflict with India is something the army needs to justify its own existence, and something the government (whether civilian or army) can use to divert attention from domestic problems...again a time-tested practice......The popular refrain so far has been that Pakistan cannot award such a ‘coveted’ status to a country with which it has an ‘ideological’ conflict........In political terms the stated position of Pakistan for popular consumption or for gallery is it could not trade with India on the blood of the Kashmiris.........Pakistan watchers on this side of the border (India) reckon that the Pakistan Army has a vested interest in not allowing more trade to flow across the divide. Trade would inevitably increase people to people contact and this would mean that the army’s control over the establishment would loosen as increasing number of people would interact with people from the ‘other side’ and this would mean infusion of liberal ideas in the hereto closed society. ........that existing power equations in Pakistan mean that self-interested people would lose more from peace than war.``

Why does every Indian article on Pakistan, blames Pakistan for nearly everything? Indian writers, quoting Indian professors, and Indian websites, painting strange pictures of Pakistan. No wonder Indians were so suprised and overwhelmed when they saw Paksitan, in person..... :-)

Perhaps the first thing that needs to happen, for peace, is for Indians to carry out some introspection, and to get a more objective view of the whole situation, in South Asia, and spread blame equally.....Otherwise, India will turn into Vereeshabad, i.e. well-meaning Indians, who genuinely want peace with Pakistan, but are convinced that Pakistan is the cause of all the problems between India and Pakistan........And desparately wanting Pakistan, ``to get its act together,`` while being convinced that India is not to blame for much.......

Veeresh ji, can you tell me what products Pakistan can sell to India? Will India agree for Gas Pipeline through Pakistan, will India Purchase Electricity, No India will never.

ULTRA PATRIOT, is it Economical for India to buy Expensive LPG via Tankers instead of cheaper Gas directly via Pakistan?.

Urstruely

``Now how can we do business with you? Give me one good reason. ``

1. God is on your side. Why, you a proud musalman fear minor banya intellect? You go around quoting One-Hair (Iqbal) and his claim to khudi, and you are scared of indulging in little bussiness? This after being a follower of a great bussinessman of 7-th century arabia? This is unforgivable.

2. Yes, the Sahukar of the yesteryear is much-maligned. My own folks told me of how the money lending in pre-partition pak was all in bania hands. Evene Alamgir Aurangzeb had to deal with moneylender banias to finance his campaigs. So i understand your pain, however, this is all yesterdays social structure. Today, the sons of sahukars have to do govt jobs and software writing as anyone else. So, as far as you are willing to accept that musalman may not necessarily dominate, the playing field is level. Consider that with baygahirat banias help, aam musalmans lifestyle may actually improve! Currently, granted that some musalmans dominate in pakistan, but at the expense of a large number of other musalmans.

so there, two reasons. And by the way, your last post was long-winded but did not make a crisp point as your posts normally tend to make. was it from romair?

=== Interact Filtered ===
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Vereesh #66: ``Poor Mr. Patriot.``

I truly hope that you do not work in the sales department of any Indian company; specifically one that wants to sell in Pakistan. Whatever opportunities that company may have in selling in Pakistan, will be ruined by your comments and attitudes.

If there is one thing I have learnt, after becoming a businessman (albeit a small-businessman, at the moment) is that humility goes a long way. The other thing I have learnt is that businessmen have one aim: to successfully (and hopefully legally) make money, and more money

I get hired to give advice to companies in how to set up and/or overhaul their IT depts. This involves sitting down with VPs and CIOs and advising them. One of the hot issues at the moment is off-shore development. Every single client has asked me about where they should do off-shore development. And I have told every single one to go to India. Even though I am a Pakistani. Why? Because, at the moment, I think that is where they will make the most money.

During this process, I end up meeting sales reps from Indian off-shore companies. The one from Tata, handling a major part of North America, is a close acquintance. We are family friends now, and watch Indian movies together, whenever we meet. I have worked with the Infosys guys also. And will be meeting Wipro shortly. There is one trend about all Indian IT people I have met in North America, that I greatly admire. They are all extremely humble. They are the most humble successful people I have ever met, in my life. Quite the opposite of most Indians I come across on Chowk.

Not once have they told me how India`s IT industry is gigantic, while Pakistan`s is tiny (which it is). They have never told me that all the radiators in Pakistan are made in India (even if they are). Or how everyone in Pakistan is Mr. Patriot, while everyone in India is Mr. Peaceful. To make a long story short, they never concentrate on one-upmanship, even in areas, where they could. Either because they are good salespersons, or because it not their nature, or because they know I am not an idiot and understand profit and loss, as well as they do.

Now, imagine what would happen if they followed the same logic and marketing approach you are following. If they tried to show me that they know more about Pakistan, than I do, even though I have grown up in Pakistan, and they have spent five days there. And that I need to get my act together. And that Mr. Patriot is the only things keeping Indian CDs out of Pakistan, etc. What would be my reaction? Do you think I would buy their nonsense? Do you think the next time I advised a VP, I would be inclined to advise him to go to India, or to go to China or Russia or Pakistan?

Humility goes a long way. As does an attempt to not be judgemental. Pakistani businessmen got into privatisation in the late 50s - thirty years ahead of anyone else in South Asia. They are quite shrewd. They know a good deal when they see it. You don`t need to convince them. In fact, your arguments may actually drive quite a few away, rather than attract more.......

#66 -- oops it has already begun -- my sympathies are with you bong/asfand -- veeresh sahib -- `ask anyone who travels on the lahore-isb motorway` -- already did,s everal who use it quite frequently, they laughed in my face, thought i was a lunatic -- and they arent the nationalistic types, if something like this was happening they would be the first to tell others -- seriously veeresh sahib, seriously - poor mr. Veeresh

veeresh ji -- you say you have been at it for the past few weeks -- on this board, ji, its the other way round -- i have contested your claims, most of which are quite absurd and ill-informed (the gem being the daewoo-tata motorway) to merit repeating on this post --

lopsided approach,

Trade and people o people contacts are the outcome of two nations having similar values, similar institutional arrangemenbts. During the communist days not many from other countries visited them, there was hardly ant trade. The situation ius very similar between pakistan and india. In terms of the world views, pakistan is miles apart from india. Jihadis rule the streets of pakistan. I was reading an article that in karachi, industries cannot operate at night because people are not ready to come out at night. One can imagine its impact on costs due to low capital utilisation.

Murder of a human is not a crime against the state, the families of the dead have to pursue it through the corts. A politician is deported while mushy is offering residency for terrorists in pakistan. Dawwod ibrahim under this law has been staying in pakistan.

Every one who starts trade with pakistan will be the looser. At the start of next hostility his assets will be looted. When pakistanis talk about babri masjid, no one dares to mention the temples destroyed in pakistan. Only once PM on chowk acknowl;edgd this. No dawn will dare to report this. No Omar will dare to write an editorial. Pakistanis have xplained this as spontaneous reaction, well what will happen to any indo pak industries due to this spontaneous reaction.

There are no company laws and trade rules. no legislative activity has taken place since mushgy came to power. It is pure wishful thinking by the ilks of dost mitter and stuke and others from the hindi belt who find so much of cultural similarity with pakistan. They forget taht there is no similarity between the valeus reflectsd in society. As the war on terror progresses, a pak visa stamp on your passport, one will live to regret it.

On automobile parts in general:

Look at any independent garage (almost extinct at this point) or auto parts shop in the US. There will be a blue sign saying ``NAPA`` indicating they sell approved replacements for Original Equipment (genuine brand-name) spare parts.

You would have the choice of buying GM (or Ford or Chrysler) parts or their identical (in measurements) replacements made to NAPA specifications. These NAPA parts are made all over the world. You wouldn`t buy an alternator from GM, you would buy a NAPA alternator because it is cheaper. (Trivia: In fact, in the case of alternators, you wouldn`t buy a new one but a ``remanufactured`` one since it is cheaper.)

OEM radiator caps for GM cars are sourced exclusively from TVS. NAPA radiator caps are made by... who knows and who cares?

Jang # 40

``Some bad collective memories from pre-partition days?``

As a matter of fact yes - there are memories (not mine, since I was in a fluid form then, but that of the generations that preceded me.)

As I mentioned earlier in a post that I had a meeting with some Pakistani cloth merchants recently; when the debate got heated up some other people joined in the discussion as well. Some of them were of the older generation who were in their late 80s and discussion turned towards the business ethics of the Muslims/Pakistanis. A question was posed as to why do Pakistani businessmen have such an abysmal business ethics while their own Prophet (pbuh) and number of his associates were businessmen themselves. Someone suggested that as compared to us the buniya has relatively sound business ethics. A number of theories and social analyses were presented. Our Tao Ji in his late late 80s had this to say.

He said that it all happened before and after the War of Independence in 1857. Even decades before the war British started promoting Hindus as a business class to weaken the political clout of the Muslims; the baniya on the other hand was always in business because of their caste system. So after 1857, the Muslims lost not only their political power that protected their capital but also the capital itself through confiscations followed by public executions, and simply loot. So as a result, until the start of WWI, Muslims did not have any capital to do any kind of business. During the WWI British contracted out work to Muslims as well and first time after almost three quarter of a century later Muslims began to see any form of capital coming towards them. Since, British were also fighting against Ottoman Caliphate the Muslim mindset was to rip British off if nothing else to get even with an overwhelming oppressive force. That sowed the seeds of bad business ethics in Muslims the first time. War is an ugly business and baniya employed unethical methods as well but Brits needed help from Muslims on two fronts – one, they needed man power to strengthen their military force spread across Arab and African continent and second, they wanted to pacify Muslim sentiment against them, which was on the peak during Khilafat Movement of Ali Brethren.

After the war Muslims gained some capital to start businesses with, but they did not have political clout to protect the businesses. The wholesale business was absolutely owned by buniya and he wouldn`t sell merchandise to a Muslim at a price that would keep him competitive with his Hindu counterpart. The years between the two great wars are a sad story of Muslim failure to do business. In addition, they also had to survive the great depression of the 30s, which effected everyone globally. Then the WWII came. Brits again needed Muslim help. The Muslim business mindset that took its roots during WWI and strengthened during the failures of 20s and 30s became very aggressive in ripping Brits off to get even for the failures of past many decades. That is exactly the reason why when during the war years when Muslim League presented his idea of a separate homeland where there would be economic independence and freedom from the economic oppression by Brits and Hindus, the idea not only appealed to the masses but also to the business class. And hence our Quaid-e-Azam won us the economic freedom that we had been yearning for so long.

After Pakistan came into being what we got in result, however, was high ambitions, no capital, and a very bad business ethic. Every Pakistani interlocutor on this forum will attest to this effect. So in Tao Ji`s analysis Muslim business class is extremely ill prepared to take on the global challenges let alone dealing with the buniya. It is shortsighted, and it is greedy. In addition, Tao Ji opined that Hindu over the years has not changed his mindset either. He longs for those years when he could exploit without impunity and he yearns for the chance to get even with Muslims again.

I agree with Tao Ji. Personally, I hold a very low opinion about Hindus as a nation and a business class. The self-serving, condescending and mindless drivel that they spew here in their travelogues (about Pak) and very interacts on this thread when they talk about business is an evidence of a deeply ingrained inferiority complex and contempt that they harbor against Pakistanis in particular and Muslims in general. Now how can we do business with you? Give me one good reason.

niranjan -- interesting you bring up that discussion of my weenie is bigger than yours -- one guy in particular seems to be doing it here on this board -- now his claim that all radiator caps are made by one company in the world -- and guess where he`s from niranjan ?

bongdongs and asfand -- prepare now to be flooded with dozens of posts that will talk down to you, refuse to accept what you have to say and end up leaving you with considerable regret at having said something against the venerable veeresh ji --

bongdongs -- i dont think its a problem at all to have an indian piston in a pakistani car -- the problem is when some dude sitting in delhi insists that all paki cars (well most of them) have indian pistons -- AND THAT DRIVERS CALL THE DAEWOO MOTORWAY THE DAEWOO TATA MOTORWAY -- hahaha -- that was a particularly creative one -- i know dozens of people who have travelled on this, including journalists and they never picked this change in nomenclature but this itinerent traveller comes from india and picks it up, starts telling the whole world that is the case and insists he is not wrong --

veeresh ji -- naheen i get none of the points -- and plz dont bother explaining yet again -- arjun 54# hahaha this isnt a political argument -- i cant seem to understand why veeresh is insisting that he`s right -- when so many pakistanis LIVING in pakistan are interacting here and would probably have more authentic information than him -- as for your statement ``Let them live under the illusion that trade between the two countries won`t benefit Pakistan more`` -- actually many business people do think that pakistan can also benefit -- in any case, thats more an economics thing -- that is not what is under debate here -- clearly veeresh ji you dont get it, and i dont think ever will -- when he is confronted with the facts -- by an interview by the MD of Tetley in Pakistan saying that company is a joint venture with Tetley UK, when he ist old that santros here do not say MADE In INDIA he then engages in further semantic exercises -- veeresh ji you are quite good at obfuscating the obvious and unfortunately do not seem to have the moral courage to admit that you have been cornered -- but its ok, i dont think u will ever get that either --

Bongdongs 62/Asfand 60:-

a) TVS on radiators ofr OE equipment to the automobile industry, almost 100%.
b) There is a back-to-back majority holding in IVECO by a Hinduja company.
c) Please ask a friend to travel on a bus on the Lahore-Islamabad Highway.

Point I am making here is:-

a) Indian goods have entered the Pakistani market. Previously by back doors, smuggling and others, now courtesy joint ventures and third parties, usually using switch bills of lading route. Mr. Patriot therefore pays 2-3 times the cost of a tyre, for example.

b) These routes, to shield identity, only increase the prices to the eventual customer, Mr. Patriot.

c) However, to keep Mr. Patriot in his place spending higher, the establishment brings out the ``India will swallow you card``.

d) Interim, the local manufacturers, also Patriots, if any, do not get any encouragement to work efficiently.

e) At the end of the day, therefore, the Patriots continue using Indian goods and paying more.

Poor Mr. Patriot.

There is no alternative to trade.

It is a great vehicle to start anew.


Ras