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Posts Tagged Pakistan for Sale




                          WHY TO SELL
Part 1



Asad Umar
Friday, February 14, 2014 
Part – I

The regressive fiscal measures taken by the PML-N government in its first nine months in power make it abundantly clear that PM Sharif’s ‘most experienced’ team has no interest in citizen welfare when taking important economic decisions. 

While the citizens have been burdened by unprecedented increase in prices of electricity, gas, petrol and burdened further by increase in taxes on essential daily use commodities, the elite has been lavished with tax breaks and amnesty schemes to get richer. However, the party may have just begun. The ‘most experienced’ team’s next target is to deliver what may be the ‘grand sale of the century’ – marketing it as the miracle cure for the ailing economy.

This is the same miracle cure that was administered by the ‘most experienced’ team in the 1990s under the IMF stabilisation programme. The results of the 1990s privatisation programme were dismal. The Asian Development Bank’s 1998 evaluation report found that only 22 percent of the state-owned enterprises (SOEs) that were privatised were performing better under private-sector management, whereas 34 percent of the unit’s performance worsened significantly. 

Out of the 83 manufacturing units privatised, 20 were closed down permanently, leading to significant loss of employment. We risk making the same mistakes if we are not more thoughtful in our approach. The government has prepared a list of 31 state-run enterprises to be privatised within the next three years. There is little to suggest that the results will be any different this time around.

The PTI supports a formal restructuring of state-owned enterprises under an independent board of directors (BoD) and through a transparent process as prescribed by the Pakistan Institute of Corporate Governance. The best example of a developing country successfully turning large inefficient state enterprises into engines of growth is Malaysia. The Malaysian government setup an autonomous strategic investment company ‘Khazana Nasional’, run by an independent BoD with powers to appoint CEOs and hold them accountable on clearly defined performance benchmarks. The landmark Government-Linked Companies (GLC) Transformation Programme of Khazana Nasional has been a huge success and has rapidly transformed inefficient SOEs into high performing corporate giants. 

SOEs with strategic importance were kept under government ownership but made competitive through eliminating influence of politicians/bureaucrats. Strategic importance can be for financial reasons (the income generated for government), energy security, employment generation capacity and public service delivery (water, health, education and public transportation). 

A few select SOEs with little strategic importance were also privatised. However, privatisation was pursued only after the SOEs had been restructured and made profitable to achieve maximum value for shareholders (government and public). Importance was given to strengthening the regulatory agencies to achieve the privatisation objectives of enhancing competition and raising competitiveness of industry.

The Khazana National model was also a key recommendation put forward in the National Economic Agenda that was presented to the government in 2012 by the Pakistan Business Council (PBC). This is also what the PML-N promised in their 2013 election manifesto. Specifically, the PML-N manifesto stated that “the immediate task of the CEOs – appointed by independent and professional boards, will be to manage these corporations effectively and to plug the losses”. Instead we see indecent haste in outlining over 31 SOEs for privatisation.

Like all other pre-election promises, the PML-N government has abandoned its promise of a transparent privatisation process managed by an independent board, free of nepotism. Instead the Privatisation Commission BoD nominated by PM Sharif are all members affiliated with the ruling party and hence not independent. The professional expertise of some of the members is also highly questionable.

Despite the passage of over nine months in power, the PML-N government has failed to appoint CEOs of over 28 of the SOEs/institutions. The SOEs being run with acting CEOs include PSM, PSO, OGDCL, SNGPL, SSGC and Pepco etc. 

For example the acting CEO of the PSM is the same man accused by the PML-N to have systematically destroyed Pakistan Steel under the PPP government. This raises serious questions marks on the intent of the government. Questions are propping up over the government preparing to hand over these SOEs at throw-away prices to friends and family.

Similarly, the PML-N government has systematically moved to weaken the regulatory authorities ahead of the planned privatisation programme. Ogra, Nepra, SECP and now even the SBP are without appointed CEOs and are being run on an ad hoc basis. The scant regard this government has for laws pertaining to regulators can be evidenced from the multiple violations of the State Bank Act being committed by the government in the last few months. This again raises serious question marks over transparency of the privatisation process – with the government deliberately and systematically weakening regulatory authorities ahead of initiating privatisation.

The PML-N privatisation mantra is deeply flawed. The party argues that the private sector can run these SOEs more efficiently and that the government can no longer afford to spend taxpayers’ money on bailing out these SOEs every year. There is little evidence to suggest that private enterprises are always more efficient than state-run enterprises. Take the example of the energy sector; Sinopec of China and Saudi Aramco are just as profitable as BP or Exxon Mobil. Similarly, Singapore Airlines and Emirates, both state owned, are bigger and more profitable than almost any of the private sector airlines. 

The corporate banking giants in the US and EU had to be renationalised or recapitalised following the 2008 global financial crisis. The railways sector in the UK and EU had to be renationalised following disastrous results under private-sector management.

The real reason the government is demonstrating undue haste in pushing through privatisation is the need for money to finance its large deficits. The PML-N government borrowed over Rs883bn (June 1 to January 24) from the SBP for deficit financing – a new record beating even the woeful PPP government’s dismal performance. 

The IMF has put strict limits on further money printing and so the government is seeking new avenues to finance its unsustainable deficits. Instead of initiating real reforms to raise government income through tax on the large, extremely wealthy untaxed segments of the economy or curtailing unproductive spending, the government has gone for the easier short cut to finance its large deficits. This is, of course, a very short-sighted strategy as it is onetime revenue earned through sale of the SOEs and will leave the structural problem unresolved.

Let’s dig deeper and see how serious a drain the SOEs put on the government finances. The budget documents show that government paid Rs367bn in FY13 to SOEs for subsidies/losses out of which Rs350bn (95 percent) was accounted by only two entities – Wapda and KESC. As we know, KESC (Karachi Electric) is now a privatised entity. If we take out Wapda and KESC the losses of the SOEs paid by the government in the FY13 budget were only Rs18bn. 

Interestingly, the government forgets to mention the fact that most of the SOEs put up for privatisation are profitable and earned the government over Rs63 billion in dividends alone in FY13. So the net budget impact for the government (dividends minus subsidies) of the SOEs, excluding the power sector, was a positive contribution of Rs45 billion last year!

To be continued 


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Pakistan For Sale

Pakistan For Sale

 The whole battle is economic interests. Indians are  working in close collaboration with some top  shameless so called Pakistanis, like Mian Mansha, owners of Jang/Geo Tv, Saif ur Rahman and even family members of Mr.Nawaz  “Shameless”  Sharif etc, for acquiring prime back bone assets of Pakistan through offers to Privatization Commission.

                                        1. PIA
                           2. OGDC
                           3. National Bank of Pakistan.
                           4. Pakistan Steel Mills.
                           5. PSO
These shameless stooges would be governed with the Indian strings,exactly in a way Geo Tv of Pakistan is controlled by Indians.

 If #MNS <https://www.facebook.com/hashtag/mns> govt lets Indians acquire

 the Pakistani assets through Privatization Commission what would that mean
to Pakistan?

 1. Present government on the crutches of India.

 2. MNS surrenders Pakistan’s economy to India

3. MNS gets to expand his business in India.

 4. Pakistan loses its controls over its assets.

 5. India would be able to choke Pakistan economy any time.

There are two par­al­lel agen­das dri­ving two kinds of land grab­bers. The first track is food secu­rity. A num­ber of coun­tries which rely on food imports and are wor­ried about tight­en­ing mar­kets, while they do have cash to throw around, are seek­ing to out­source their domes­tic food pro­duc­tion by gain­ing con­trol of farms in other coun­tries.


They see this as an inno­v­a­tive long-term strat­egy to feed their peo­ple at a good price and with far greater secu­rity than hith­erto. Saudi Ara­bia, Japan, China, India, Korea, Libya and Egypt all fall into this bas­ket. High-level offi­cials from many of these nations have been on the road since March 2008 in a diplo­matic trea­sure hunt for fer­tile farm­land in places like Uganda, Brazil, Cam­bo­dia, Sudan and Pak­istan. Given the con­tin­u­ing Dar­fur cri­sis, where the World Food Pro­gram is try­ing to feed 5.6 mil­lion refugees, it might seem crazy that for­eign gov­ern­ments are buy­ing up farm­land in Sudan to pro­duce and export food for their own cit­i­zens. Ditto in Cam­bo­dia, where 100,000 fam­i­lies, or half a mil­lion peo­ple, cur­rently lack food. Yet this is what is hap­pen­ing today. Con­vinced that farm­ing oppor­tu­ni­ties are lim­ited and the mar­ket can’t be relied upon, “food inse­cure” gov­ern­ments are shop­ping for land else­where to pro­duce their own food. At the other end, those gov­ern­ments being courted for the use of their coun­tries’ farm­land are gen­er­ally wel­com­ing these offers of fresh for­eign invest­ment.

The sec­ond track is finan­cial returns. Given the cur­rent finan­cial melt­down, all sorts of play­ers in the finance and food indus­tries – the invest­ment houses that man­age work­ers’ pen­sions, pri­vate equity funds look­ing for a fast turnover, hedge funds dri­ven off the now col­lapsed deriv­a­tives mar­ket, grain traders seek­ing new strate­gies for growth are turn­ing to land, for both food and fuel pro­duc­tion, as a new source of profit. To get a return, investors need to raise the pro­duc­tive capac­i­ties of the land and some­times even get their hands dirty actu­ally run­ning a farm.

Experts say the agri­cul­ture invest­ments could be a win-win sit­u­a­tion. The Gulf gains food secu­rity, while poorer devel­op­ing coun­tries ben­e­fit from added jobs and improved tech­nol­ogy. But there are con­cerns, too. The head of the UN Food and Agri­cul­ture Orga­ni­za­tion, Jacques Diouf, has warned that for­eign land acqui­si­tion and long-term leas­ing schemes, if done poorly, risk cre­at­ing a neo­colo­nial pact” and “unac­cept­able work con­di­tions for agri­cul­tural work­ers.”

Even so, some coun­tries are seek­ing out invest­ment. The food secu­rity land grab is the one that most peo­ple have been hear­ing about, with news­pa­pers report­ing that Saudi Ara­bia and China are out buy­ing farm­land all over the world, from Soma­lia to Kaza­khstan. But there are many more coun­tries involved. A closer look reveals an impres­sive list of food secu­rity land grab­bers: China, India, Japan, Malaysia and South Korea in Asia; Egypt and Libya in Africa; and Bahrain, Jor­dan, Kuwait, Qatar, Saudi Ara­bia and the United Arab Emi­rates in the Mid­dle East.

The sit­u­a­tion of these coun­tries varies a great deal, of course. China is remark­ably self-sufficient in food. But it has a huge pop­u­la­tion, its agri­cul­tural lands have been dis­ap­pear­ing to indus­trial devel­op­ment, its water sup­plies are under seri­ous stress and the Com­mu­nist Party has a long-term future to think of, it should sur­prise no one that food secu­rity is high on the Chi­nese  government’s agenda. And with more than US$1.8 tril­lion in for­eign exchange reserves, China has deep pock­ets from which to invest in its own food secu­rity abroad. As many farm­ers’ lead­ers and activists in south-east Asia know, Bei­jing has been grad­u­ally out­sourc­ing part of its food pro­duc­tion since well before the global food cri­sis broke out in 2007. Through China’s new geopo­lit­i­cal diplo­macy, and the government’s aggres­sive “Go Abroad” out­ward invest­ment strat­egy, some 30 agri­cul­tural coop­er­a­tion deals have been sealed in recent years to give Chi­nese firms access to “friendly coun­try” farm­land in exchange for Chi­nese tech­nolo­gies, train­ing and infra­struc­ture devel­op­ment funds. Chi­nese com­pa­nies leas­ing or buy­ing up land, set­ting up large farms, fly­ing in farm­ers, sci­en­tists and exten­sion work­ers, and get­ting down to the work of crop pro­duc­tion.

Most of China’s off­shore farm­ing is ded­i­cated to the cul­ti­va­tion of rice, soya beans and maize, along with bio-fuel crops like sugar cane, cas­sava or sorghum. The rice pro­duced abroad invari­ably means hybrid rice, grown from imported Chi­nese seeds, and Chi­nese farm­ers and sci­en­tists are enthu­si­as­ti­cally teach­ing Africans and oth­ers to grow rice “the Chi­nese way.” How­ever, local farm work­ers are hired to work the Chi­nese farms.

The Gulf States – Bahrain, Kuwait, Oman, Qatar, Saudi Ara­bia and the United Arab Emi­rates – face a totally dif­fer­ent real­ity.

As nations built in the desert, they have scarce soil and water with which to grow crops or raise live­stock. But they do pos­sess enor­mous amounts of oil and money, which gives them pow­er­ful lever­age to rely on for­eign coun­tries for their food. The cur­rent food cri­sis has hit the Gulf States excep­tion­ally hard. Because they depend on food from abroad (espe­cially from Europe) and their cur­ren­cies are pegged to the US dol­lar, the simul­ta­ne­ous rise in food prices on the world mar­ket and the fall in the US dol­lar have meant that they have imported a lot of “extra infla­tion.” Their food import bill has bal­looned in the last five years from US$8bn to US$20bn. When the food cri­sis exploded, and rice sup­plies from Asia were cut off, Gulf lead­ers made fast cal­cu­la­tions and came to hard con­clu­sions. The Saudis decided that, given impend­ing water short­ages, it would make sense to stop pro­duc­ing wheat, their main food item, by 2016 and, instead, to grow and ship it over from else­where, pro­vided that the whole process was firmly under their own con­trol. The United Arab Emi­rates, 80 per­cent of whose pop­u­la­tion is migrant work­ers, most of them rice eaters from Asia, pan­icked. Under the aegis of the Gulf Coop­er­a­tion Coun­cil (GCC), they banded together with Bahrain and the other Gulf nations to for­mu­late a col­lec­tive strat­egy of out­sourc­ing food pro­duc­tion. Their idea is to secure deals, par­tic­u­larly in sis­ter Islamic coun­tries, by which they will sup­ply cap­i­tal and oil con­tracts in exchange for guar­an­tees that their cor­po­ra­tions will have access to farm­land and be able to export the pro­duce back home. The most heav­ily tar­geted states are, by far, Sudan and Pak­istan. The seri­ous­ness of the Gulf States’ drive should not be under­es­ti­mated.

Between March and August 2008, indi­vid­ual GCC coun­tries or indus­trial con­sor­tia leased under con­tract mil­lions of hectares of farm­land. Lead­ers of the GCC are plan­ning to final­ize offi­cial pol­icy on this.

Japan and South Korea, for instance, are two rich coun­tries whose gov­ern­ments have opted to rely on imports rather than self-sufficiency to feed their peo­ple. Both get around 60 per­cent of their food from abroad. Early in 2008, the Korean gov­ern­ment announced that it was for­mu­lat­ing a national plan to facil­i­tate land acqui­si­tions abroad for Korean food pro­duc­tion. Indeed, Korean food cor­po­ra­tions are already buy­ing up land in Mon­go­lia and east­ern Rus­sia to pro­duce food for export back home.

The new strat­egy is well under way in Burma, which sup­plies 1m of the 4m tons of lentils, that India imports each year to sup­ple­ment its domes­tic out­put of 15m tons. Rather than keep buy­ing

from Burma, Indian traders and proces­sors now want to go in and grow the lentils there them­selves. It works out cheaper, and they get more con­trol over the entire process. With the government’s sup­port, Indian cor­po­ra­tions are get­ting leases to Burmese farm­land to pro­duce the crop for exclu­sive export to India. The Indian gov­ern­ment is pro­vid­ing the Burmese mil­i­tary junta with spe­cial new funds to upgrade its port infra­struc­ture, and is aggres­sively push­ing a tai­lored bilat­eral free trade and invest­ment agree­ment to iron out the pol­icy wrin­kles between the two states. But it doesn’t stop there. Indian CEOs are also buy­ing up Indone­sian palm-oil plan­ta­tions, and are now board­ing planes to Uruguay, Paraguay and Brazil to find land to grow pulses and soya beans for export to India. Mean­while the nation’s cen­tral bank, the Reserve Bank of India, is quickly try­ing to change India’s laws so that it may issue Indian pri­vate com­pa­nies, with the loans they need to pur­chase farm­land over­seas. Such a pos­si­bil­ity has never been con­tem­plated before, so the rules don’t exist.

The Gulf States, among other land grab­bers, are quite lucid about their inten­tion to (a) secure food sup­plies through direct own­er­ship or con­trol of for­eign farm­land, and (b) exclude traders and other mid­dle­men as much as pos­si­ble in order to cut their food import bills by 20 – 25 per­cent. Indeed, they have been forced to go to places like Islam­abad and Bangkok and ask the gov­ern­ments there to lift their export bans on rice just for their spe­cial farms. The under­ly­ing con­tempt that all of this shows for open mar­kets and free trade, so much lauded by West­ern advis­ers over the last four decades, is glar­ing.

Another fun­da­men­tal issue is that work­ers, farm­ers and local com­mu­ni­ties will inevitably lose access to land for local food pro­duc­tion. The very basis on which to build food sov­er­eignty is sim­ply being bartered away. The gov­ern­ments, the investors and the devel­op­ment agen­cies that are being drawn into these projects will argue that jobs will be cre­ated and some food will be left behind. But these don’t replace land and the pos­si­bil­ity of work­ing and liv­ing off the land. In fact, what should be obvi­ous is that the real prob­lem with the cur­rent land grab is not sim­ply the mat­ter of giv­ing for­eign­ers con­trol of domes­tic farm­lands. It’s the restruc­tur­ing.

For these lands will be trans­formed from small hold­ings or forests, what­ever they may be, into large indus­trial estates con­nected to large far-off mar­kets. Farm­ers will never be real farm­ers again, job or no job. This will prob­a­bly be the biggest con­se­quence.

Pak­istan opens more farm­land to for­eign­ers




Senator Waqar Ahmed Khan

Pak­istan dra­mat­i­cally increased the amount of farm­land open to for­eign investors to 6 mil­lion acres, but will require out­siders to share half of their crop with local grow­ers, Pakistan’s invest­ment min­is­ter told Reuters (May 17,2009). Crop shar­ing will defuse ten­sions with local farm­ers fear­ful of being crowded out by wealthy for­eign­ers as Pak­istan opens exist­ing farm­land to out­siders for sale or long-term lease, said Waqar Ahmed Khan, Fed­eral Min­is­ter of Invest­ments.

Gulf Arab coun­tries reliant on food imports have ramped up efforts over the last year to buy land in devel­op­ing nations rang­ing from Pak­istan to the Philip­pines and Ethiopia. “We expect the investors in farm­land to give the local farm­ers 50 per­cent of the land’s yield, in addi­tion trans­fer­ring the tech­nol­ogy which will help increase the out­put of the land by three times,” Khan said dur­ing a trip to the United Arab Emi­rates (UAE) to rally investor sup­port. “We have to apply these reg­u­la­tions to sup­port the inter­ests of the local farm­ers, oth­er­wise we will be fac­ing objec­tions from the farm­ers, and we need to keep them happy,” he added.

Farm­ers’ con­cerns have led the south­west­ern Pak­istan province of Balochis­tan to block direct deals between pri­vate investors based in the UAE and farm­ers, Nasir Khosa, gen­eral chief-secretary of Balochistan’s provin­cial gov­ern­ment, said in April 2009.

The United Nation’s Human Right Coun­cil has expressed con­cern over the sale of farm­land and called for a code of con­duct. “We will do every­thing to pro­tect farm­ers’ inter­ests,” said Khan.

Last month, Khan said the coun­try had a mil­lion acres of farm­land to offer to investors. “Recently, we have been able to iden­tify around 6 mil­lion acres of farm­land in var­i­ous parts of the coun­try which can be leased out on long-term basis or sold,” he said.

Six mil­lion acres is the equiv­a­lent of 2.43 mil­lion hectares. Dur­ing Pakistan’s Gulf farm­land sale road show, a lot of inter­est came from UAE investors, espe­cially in acquir­ing farm­land to pro­duce ani­mal feed and rear­ing live­stock, said Amjad Nazir, the joint sec­re­tary at Pakistan’s Min­istry of Food and Agri­cul­ture.

“All week we had meet­ings with investors from both the pri­vate and the pub­lic sec­tor and I think very soon we will be send­ing del­e­ga­tions to study the oppor­tu­ni­ties here,” said Nazir. Emi­rates Invest­ment Group, a private-sector invest­ment com­pany based in Shar­jah, the third-largest emi­rate of the UAE, said last month it was in the process of acquir­ing farm­land in Pak­istan to export more food to the Gulf region. Last year, pri­vate Abu Dhabi-based invest­ment firm Al Qudra said it had plans to start agri­cul­ture projects in Pak­istan.

To attract the for­eign investors, the gov­ern­ment would guar­an­tee full exemp­tion from duties and other levies for all equip­ment imported for farm land projects. In India for­eign com­pa­nies are banned from acquir­ing farm land but allowed to oper­ate on rented prop­erty.

Efforts to sell farm­lands began in year 2000 but so far have met sig­nif­i­cant oppo­si­tion. For exam­ple, an offi­cial of Pakistan’s Min­istry of Food and Agri­cul­ture said in July 2000, “We are work­ing to final­ize a pol­icy for intro­duc­ing cor­po­rate agri­cul­ture in the coun­try where large farm hold­ings will be allowed to com­pa­nies which would seek list­ing in the stock exchange.” Under the pro­posal, for­eign com­pa­nies were to be granted a 30-year lease on government-owned land that could be extended for another 20 years. How­ever, food rights cam­paign­ers expressed the fear that profit-driven agribusi­ness transna­tional com­pa­nies (TNCs) would use Pak­istan as a base for export­ing cash crops which would replace sta­ple cere­als on the country’s farms.

Huma Fakhar

Huma Fakhar, a mar­ket research and trade con­sul­tant, said Pak­istan is a log­i­cal choice for Gulf invest­ments. Fakhar said an investor from Abu Dhabi, whom she declined to name, last year, bought about 16,000 hectares, or 40,000 acres, of farm­land in the Pak­istani province of Balochis­tan. Two UAE firms, Emi­rates Invest­ments Group and Abraaj Cap­i­tal, have also expressed inter­est in invest­ing directly in Pak­istani agri­cul­ture. A few months ear­lier, some locals from the Makran area expressed their frus­tra­tion with Arab investors who, were not hon­or­ing terms agreed at time of the sale of farm land to the com­pa­nies. They said that they (local) were promised employ­ment on farms but they (investors) did not ful­fill the promise. Instead of cul­ti­vat­ing the food crop with the involve­ment of locals, the con­trac­tor sub­con­tracted land to some­one else who planted fod­der with the help of con­tract labor brought from areas out­side the province.

Pros and cons of cor­po­rate farm­ing Fed­eral min­is­ter of invest­ment Waqar Ahmad Khan out­lin­ing his plan said that in our coun­try 28 mil­lion acres of land is bar­ren, with the help of for­eign  investors, we can con­vert the mil­lions of bar­ren acres into cul­ti­vated land, which will pro­vide the job oppor­tu­nity to thou­sands of peo­ple as well as increase the country’s GDP. He fur­ther said that the gov­ern­ment would pro­vide exemp­tion from taxes and dif­fer­ent levies to the for­eign investors, that the gov­ern­ment would install 100,000 strong secu­rity forces to ensure secure envi­ron­ment at farm land. He said that in the new invest­ment pol­icy, for­eign investors inter­ested in Pak­istani farm­land have bound 50 per­cent part­ner­ship with Pak­istani farm­ers.

He said that the agri­cul­tural pro­duc­tiv­ity can get a major boost if suf­fi­cient com­pa­nies are facil­i­tated to start busi­ness by inject­ing cap­i­tal and intro­duc­ing mod­ern man­age­ment and tech­nolo­gies.

Our peo­ple have dis­played great poten­tial in adapt­ing to smart busi­ness prac­tices, he fur­ther added.

“As food prices sky­rock­eted over the last two years, coun­tries and state-sponsored com­pa­nies were qui­etly snap­ping up land around the world,” says Abdul Khaliq in an arti­cle titled ‘Pak­istan offers one mil­lion acres of agri­cul­ture land to Arab mon­archs, Cor­po­rate farm­ing to lock up scarce water resources in Agri­belts.’ “Few noticed when South Korea began invest­ing in farms in Mada­gas­car, or when China, Japan, Libya, Egypt, and Per­sian Gulf coun­tries acquired farm­lands in Laos, Cam­bo­dia, Burma, Mozam­bique, Uganda, Ethiopia, Brazil, Pak­istan, Cen­tral Asia, and Rus­sia. The pur­chases weren’t about land, but water. For with the land comes the right to with­draw the water linked to it. And, because this water has no price, the investors can take it over vir­tu­ally for free. Their lusty rush­ing to lock up scarce water resources in agri­cul­tural belts is nonethe­less dis­turb­ing,” he asserts fur­ther.

“Most con­spic­u­ous aspect of this pol­icy is the absence of labor laws; gov­ern­ment has assured investors that labor laws will not be applic­a­ble to Cor­po­rate Agri­cul­ture Com­pa­nies, which is a clear vio­la­tion of Human and Labor rights. It is also per­ti­nent to men­tion that there will be no cus­tom duty and sales tax on import of agri­cul­tural machin­ery, equip­ment, mak­ing sig­nif­i­cant decrease in tax col­lec­tion. Div­i­dends from cor­po­rate agri­cul­ture farms are also not sub­ject to tax while remit­tance of 100 per­cent cap­i­tal and prof­its are allowed. There will be no upper ceil­ing on land hold­ing. This ‘grand’ pack­age of incen­tives projects a nefar­i­ous pro­posal by the gov­ern­ment of Pak­istan to cor­po­rate com­pa­nies for re-colonizing the coun­try,” he com­pletes.

Rehmat ullah Javed

“Emi­rates Invest­ment Group is in the process of acquir­ing farm­land in Pak­istan to export more food to the Gulf region,” said Rehmat ullah Javed, Chair­man stand­ing com­mit­tee of FPCCI on SMEs. “Instead of sell­ing land it would be bet­ter to sell its yield to the peo­ple in the Gulf Region. Appar­ently the deci­sion is a con­tin­u­a­tion of pri­va­ti­za­tion process, sim­i­lar to sell­ing shares of PTCL, banks and other state enter­prises or attract­ing for­eign invest­ment,” he added.”But if it is seen in depth and his­tor­i­cal per­spec­tive this can have seri­ous reper­cus­sions in the future.”

Sell­ing six mil­lion acres of farm­land does mean in effect that we are invit­ing multi-national colonists back to our coun­try once again. It can cre­ate secu­rity risk for the coun­try and the deci­sion to offer farm­land to for­eign­ers lacks vision and fore­sight, espe­cially since the only draw is short-term gains at the cost of sell­ing the home­land. “The deci­sion is a con­tin­u­a­tion of pri­va­ti­za­tion process sim­i­lar to sell­ing shares of state-owned insti­tu­tions to attract direct for­eign invest­ments,” said Mian Abu Zar Shad, for­mer Chair­man PIAF, “but if seen in depth and his­tor­i­cal per­spec­tive, sell­ing six mil­lion acres of farm­land means once again invit­ing East India Com­pany to our coun­try.”

Mian Abu Zar Shad Former Chairman PIAF

“It is due to the sale of Kash­mir to the Dogra Maharaja that Kash­miris were deprived of free­dom,” he con­tin­ued fur­ther, “despite the fact that the State of Jammu and Kash­mir had an over­whelm­ing major­ity of Mus­lim pop­u­la­tion in 1846 when the Amrit­sar Treaty was signed and it had 95 per­cent Mus­lim pop­u­la­tion in 1947 and there was no rea­son as to why it should not become part of Pak­istan. Despite the fact Jammu and Kash­mir was clos­est to the area which was declared Pak­istan in 1947, but due to the Maharaja Hari Singh’s dis­hon­est act Kash­miris could not reap the fruits of free­dom. Sell­ing of our farm­lands is in fact sell­ing of our home­land. It can cre­ate secu­rity risks for the coun­try,” he explained.

“As Emi­rates Group is look­ing for an inter­na­tional part­ner and total land avail­able for sale is six mil­lion acres, as such, our ene­mies can man­age to become part­ners or indi­vid­ual buy­ers directly or indi­rectly. His­tory has recorded the biggest blun­der of Pales­tini­ans when they sold land to Jews and grad­u­ally rich Jews took over their home­land and Israel appeared on the world map. The author­i­ties are requested to kindly read the his­tory and see how Israel man­aged to cap­ture the land of Pales­tini­ans and appeared as an inde­pen­dent coun­try on the world map. Pales­tini­ans are the vic­tims of their own mis­takes and Israeli has become per­ma­nent pain in the neck, “he com­pleted.

“The deci­sion to sell six mil­lion acres of farm­land can prove extremely dan­ger­ous in the long run,” said Ibrahim Mughal, Chair­man Agri forum Pak­istan.

“Pak­istan allowed some for­eign­ers in tribal areas to fight against Rus­sia and these for­eign­ers were allowed to reside in these areas with­out proper immi­gra­tion doc­u­ments and pass­ports, as a result these for­eign ele­ments have become the great­est threat for the coun­try and our gov­ern­ment has failed to send them back to their native coun­tries.

These so-called Mujahideen occu­pied some area of our tribal region (less than one mil­lion acres) and despite the Drone attacks, both USA and Pak­istan have failed to get rid of these peo­ple who are not only a threat to Pak­istan, but for the whole world. By sell­ing six mil­lion acres of land we will intro­duce new type of feu­dal­ism and cre­ate rel­a­tive depri­va­tion in the area which can spoil the future of our com­ing gen­er­a­tions, who are already vic­tims of our short-sightedness. Pun­dit Nehru, the first Prime Min­is­ter of India, intro­duced land reforms in India and feu­dal­ism was buried once and for all and total land divided among land­less farm­ers. There are many other options avail­able to us if we want to uti­lize this land and some of these are: instead of sell­ing the farm­land out­right, the gov­ern­ment can offer to lease it, sec­ondly, the farm­land should be offered to domes­tic investors first. What’s wrong with offer­ing the same incen­tives and sub­si­dies to local farm­ers? Thirdly, gov­ern­ment may dis­trib­ute this land among land­less farm­ers and help them to cul­ti­vate the same. For the uti­liza­tion of such land the gov­ern­ment should pre­fer local investors and poor land­less farm­ers and sup­port them in cul­ti­va­tion of land to increase our GDP and per capita income. Finally, gov­ern­ment can eas­ily assess the pop­u­la­tion growth in the coun­try in com­ing years. Our coun­try would need more and more cul­ti­vated area to feed our own pop­u­la­tion, rather than feed­ing other nations!”

Dr Murtaza Mughal Pakistan Economy Watch (PEW).

“Agri­cul­ture is the biggest sec­tor of the econ­omy,” said Dr Mur­taza Mughal, Pak­istan Econ­omy Watch (PEW). “It is under seri­ous threat as grad­ual sale and lease of large tracts of lands to for­eign­ers is being car­ried out in a very quick and secre­tive man­ner. Mil­lions of farm­ers will become job­less while thou­sands of acres of fer­tile land will become bar­ren because the cor­po­rate farms would be given pref­er­ence in pro­vi­sion of canal water, seed, pes­ti­cides, fer­til­iz­ers and other inputs. The idea of cor­po­rate farm­ing has evoked more fears than hopes. Many think that cor­po­rate farm­ing will have neg­a­tive impact on rural liveli­hood and will trans­form Pak­istan into a more unequal coun­try. Despite oppo­si­tion, some impor­tant per­sons seem deter­mined to allow for­eign­ers to own an unlim­ited amount of land in any part of Pak­istan,” he said fur­ther.

Indus­trial pri­va­ti­za­tion was car­ried out to retire the debt. In the process we lost many prof­itable units and the coun­try was pushed to brink of bank­ruptcy. Now fer­tile lands are being pri­va­tized in the name of tech­no­log­i­cal advance­ment and attract­ing for­eign invest­ments. For­eign­ers have only one thing in mind while invest­ing out­side their coun­try, to gain max­i­mum in min­i­mum of time and leave.”Wealthy coun­tries have con­trolled global trade, now they are eye­ing over one tril­lion dol­lar agri­cul­tural out­put of under­de­vel­oped coun­tries,” said Dr Mur­taza Mughal. “Rich coun­tries have already bought large farms in many coun­tries like Congo, Sudan, Zam­bia, Myan­mar, Laos, Uganda, Cam­bo­dia, Mozam­bique, Mada­gas­car, Ethiopia, Angola, Nige­ria, Tan­za­nia, Brazil and Cen­tral Asia. They are expand­ing and attract­ing unrest and riots. It seems that now it is our turn. Cor­po­rate farm­ing will push some cul­ti­va­tors to com­mit sui­cide while oth­ers may pre­fer crimes. A good num­ber may develop extrem­ist ten­den­cies that will have a heavy polit­i­cal price.”

“I am sur­prised at the media — why are they silent on this issue of national impor­tance? The issue must be dis­cussed in the par­lia­ment before mak­ing any deals with any for­eign groups,” he fur­ther added.

If the author­i­ties are bent upon cor­po­ra­tiz­ing farm­lands then it would be bet­ter to lease it so that Pak­istan has the right in par­lia­ment before imple­men­ta­tion.

There are many other options to uti­lize the land, instead of sell­ing, the gov­ern­ment should offer such land on five, ten, or 15 – 30 year lease, sec­ondly, the farm­lands should be offered to domes­tic investors on com­par­a­tively eas­ier terms and thirdly the gov­ern­ment may dis­trib­ute this land among land­less farm­ers and help them to cul­ti­vate the same.

Ahmed Humayun is Bureau Chief Value TV

This arti­cle was orig­i­nally pub­lished in the print edi­tion of Val­uemag, July 2009, issue 12

Graphix and lay­out by Muham­mad Asif, Pho­tos by GM Shah 








 In other words, Pakistan would become a slave to Indian economy. That would
 further mean Pakistan being folded back into India.

 Should this be allowed to happen? Is a question for every Pakistani to
 think and answer.

Wakeup People ……… Wakeup Pakistan

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