Wednesday, December 15, 2010

Why don't we learn from WikiLeaks?

Pakistan since its inception has a chequered history, as we failed to learn from history. Our leaders never read the saying of "CICERO" who said "to remain ignorant of what happened before, you were born is to remain always a child" how true is this saying, when we find our leadership being exposed by WikiLeaks. The people and media had at large the same perception, which stands now authenticated by WikiLeaks. 

The global leadership is now determined to punish the CEO for leaking the truth, as our leaders are reported to have followed the dictates of a Lady Viceroy whilst the exposures have reflected our country as a Banana Republic, but similarly the civilised world is equally following the dictates to punish the web for disclosing the truth. 

I can only presume that our leadership has learnt from history its limitation as a guiding signpost and its negative value as a warning sign, whilst history of events does not teach us what to do by showing the most common mistakes that mankind is apt to make and to repeat. The second object lies in the practical value of history "Fools" said Bismarck "say they learn by experience. I prefer to profit by other peoples experience". 

There are two roads to the reformation of our present and prospective leaders be it civilian or military-one through misfortunes of their own, the other through misfortunes of others, the former is the most unmistakable, the latter is less painful, the knowledge gained from the study of history/events is the best of all educations for practical life. 

The basic remark ascribed to "Pontius Pilate - "what is truth "and often in circumstances that make us wonder why. It is repeatedly used as a smoke screen to mask a manoeuvre, personal or political and to cover an evasion of the issue. Yet the longer I watched the current events of 4 to 5 years in Pakistan, the more I have come to see how many of our troubles arise from the habit, on all sides, of suppressing or distorting what we know quite well is the truth, out of devotion to a cause, an ambition or an institution at bottom, this devotion being inspired by our own interest. 

One of our vocal intellectuals Hasan Nisar, made it abundantly clear on media that the trial of CEO of WikiLeaks is nothing but punishing a person who leaked the truth and exposed the big wheels of the global politics. I must also commend the brave Lady Jemima for coming forward to bail a person, who had been well awarded and recognised when it suited the global players. 

Loyalty is a noble quality, so long it is not blind and does not exclude the higher loyalty to truth and decency. It pains to see some loyal politicians commenting on the events and terming the leaks as blatant lies, although from the core of their heart, they are aware and convinced of the accuracy described as "a conspirator for mutual inefficiency in governance". 

"We use the term power politics as a common usage, but lack of understanding as to where power lies actually and how it is communicated and exercised in our land of the pure. The masses at large blame others for their own misdoings, but partly they are true as leadership and policies are decided abroad due to our economic problems. 

The beggars surely cannot be choosers and have to follow the dictates of economic managers, be it RGST or Flood Tax, power rates hike etc. Looking at the situation today, the most disturbing trend in US, Britain and other democratic countries, compared with the past, it seems that, whilst there has been an improvement in some respects, handicaps have increased in other ways and on balance these may be worse. 

One factor is an excessive growth of "security mindedness' more bureaucratic often then realistic, so that it is often carried to ludicrous extremes. The issue is causing serious stress on inter-religion harmony and singling out masses on the basis of religion, without discounting the factor that religion has no role at all, but it is exploitation in search of resources by developed nations, thus the under-developed world has to be exploited to control the energy, and mineral resources etc to meet the appetite of developed world. 

I am sure that our leaders will be more cautious with powers to be when deliberating on issues of national interest. Let us accept the fact and apologies to the nation for follies committed and now being exposed. There are broadly two schools of thought about leadership. 

One has it that leader should lead, the other is he or she should follow. The latter is not as paradoxical as it seems when the government takes careful note of media and public opinion, or scrutinise the views of focus groups, they are adapting themselves to trends and attempting to satisfy demand rather than to direct it. 

Sometimes it is the wisest course, what you cannot enforce do not command. We have recently noticed that in our issues of RGST, power hikes, fuel cost etc, public opinion is notoriously resistant to some of the imported brighter ideas of the IMF canvassed by national leaders, who have taken undignified tumbles as result. We are fully aware that in today's world the sovereignty has lost its value due to interdependence of trade and commerce, but self/national dignity is last to be compromised. The living example is how Indians treated Obama on his arrival as there was no line up of President, PM etc. They maintained their dignity, but at the same time, showered the incredible Indian courtesy. 

Sunday, November 28, 2010

Port master plan

From the time of Alexander the Great, it is recorded in history that Pakistan's geographical location is strategic for the control of resources and military power. It is situated at the crossroads from Europe to Asia. Armies have used Pakistan as a launching pad to conquer lands in India and beyond. Today, there is war of a different kind, an economic one. 

Pakistan offers overland access to the countries of Central Asia and Western China to serve these territories for their flow of goods, such flows are important to the development of these countries. Pakistan is of economic strategic importance to Central Asia and western China. Pakistan's economic fate is locked in one with these Central Asian countries. So much for the rhetoric. Action is needed for Pakistan to take up its role as a strategic corridor to serve the territories. 

To capitalise on the full strategic advantage, our leaders need a comprehensive plan. There needs to be a full-scale infrastructure to support the movement of goods and people from the shores of Pakistan to the landlocked areas of Central Asia and beyond. There is a need for ports to serve as the gateway for goods and a need for the required transport infrastructure to move cargo. Needless to say, there is the need for supporting systems, and an educated workforce to support our vision. 

Most of all, there must the right policies. In respect of ports, our Honourable Prime Minister / Minister of Ports & Shipping stressed, "Following examples of various developing countries, the government is always seeking new avenues to facilitate and encourage foreign investment into the country through the provision of incentives and business-friendly policies in the shipping and port sector." 

I was a student and now am a practitioner in the maritime industry which is a evolving decipline and I shall focus on the area I have some vision ie the development of ports in Pakistan. In this respect, the Government of Pakistan started with the assistance of World Bank and their Transport specialist Durrani, the National Trade Corridor Improvement Program (NTCIP) in[June 2009 to improve the logistics infrastructure of Pakistan, with a view to enhance connectivity and boost trade in the South Asia-Central Asian region. 

One of the key initiatives under the NTCIP is to develop a Port Master Plan (PMP) to optimise the port development requirements and identify short-term (2011 to 2015) and long-term (2015 to 2030) operational requirements, port infrastructure facilities and setting a rational indicative project investment programs, prioritising development objectives and optimising resources. There has been no official announcement of the stage of the PMP. 

According to media report and World Bank sources, World Bank is said to have completed the technical and financial evaluation of the Ports Master plan. The contract negotiations for the project would soon begin between the Government and a consultant firm. The study is financed under the second trade and transportation facilitation project and the procurement is still in process. 

According to World Bank sources, all procurement of goods and services under WB - supported projects are undertaken by the authority involved in implementation ie the concerned ministry or department responsible for the implementation. Since, the implementation is at the discretion of the concerned ministry, thus consultants and director will be appointed by ministry adhering to PPRA 2004. It must be clearly understood that the funding is not a grant, but has to be paid back. It is assumed that advertisement will be made accordingly. 

It is imperative to carry out such study as it is overdue and it is feared that that in absence of such study excessive or over capacity development may take place. Our port planners and Managers are devoid of any electronic data processing in short-term port simulation and long-range planning, thus world Bank program of Port Master Plan will assist our planners for the next 25/30 years development. 

I, was amazed to see the news item on 20th November, that Karachi Port will accommodate post panamax generation of vessels of 100,000 dead-weight tons as the berth draft has been increased to 16 meter, however there is no mention of the channel depth and at the same time, it is intriguing that Karachi Deep Water Port of 16 meter draft is being built. There appears to be some misstatement or reporting error. If true as reported in such a situation Port Master Plan necessity has increased manifold so that adequate capacity planning be forecasted. The PMP is in limbo, thus needs to be expedited. 

Pakistan currently has three major ports, Karachi, Gwadar and Port Qasim, each under a different regulating authorities and reporting to the Ministry of Ports of Shipping. Together these two ports handled 2.1 million TEUs (twenty foot equivalent boxes) in 2009. To put things into perspective, Pakistan has a population of 170 million and our ports handling 2.1 million TEUs. 

India with a population of 1.1 billion handled 7 million TEUs. The reason for this favourable disproportionate figure is due to the forward-looking policies of Pakistan which treats investors right and that we have an orderly development of port infrastructure, through Public Private Partnerships (PPP). I, have restrained to discuss Gwadar Port for obvious reasons, being subjudice. 

We are uncertain at this moment, what is the stage of the PMP ie whether it is still being pursued or that more thinking is necessary. In the meantime, there is no co-ordinated development of facilities, each left to their own devices, having different visions and disparate plans. Investment decisions and expansion are made individually and sometime indiscriminately without central co-ordination's. One example is the planned conversion of general cargo berths at the Karachi Port into container terminal facilities while the execution of the Pakistan Deep Water Container Port project expected to cost US $1.5 billion is being executed. KPT will be investing close to US $1 billion to build the breakwater, quay wall, dredging and reclamation and the connectivity (road and bridge) infrastructure while the private investor will invest US $500 million for phase I. KPT investment will serve Phase I and two future phase, which will be executed depending on demand. Without clear thought and policy decision-making, in the long run, there is a risk of overbuilding, with catastrophic impact for the nation. 

In a system of PPP, it is crucial for any government to have the right policy strategies in place to attract and, most important, maintain investors interest in our country. Investors who cannot see a clear policy strategy will put their money elsewhere. Government policies should be aimed at an orderly development of infrastructure. Especially with port infrastructure, investments decisions are not made lightly and involved hundreds of millions of dollars on the part of the investor. 

With PPP, the government or the port authorities, are partners and co-investors, pouring their part of the hundreds of millions of dollars. Without a serious plan of orderly development, the government having poured such mega-dollars, building the basic infrastructure such as breakwater, dredging, may land ourselves in a situation where investors do not find it viable to participate as an operator under PPP. 

In the manufacturing and logistics industry, there is the concept of just-in-time as the most efficient manner of allocating resources. The concept envisage raw materials arriving just in time at the factory floor for production to take place. 

Material arriving too early would take up warehouse and factory space, which cost rental, insurance and other storage costs. Materials arriving too late will result in underutilisation of production capacity and loss of sales. Therefore, planning is essential such that materials arrived just in time. 

JIT could be applied to the timely development of port infrastructure. In this case, it is even more critical as overdevelopment could result in mega-losses to investors who will lose interest in investing in a country. Untimely underdevelopment will result in loss of economic opportunities for the nation. Ideally, investment infrastructure should be just in time. JIT involves the need for accurate forecasting of demand and building ahead to ensure that facilities are available when needed. 

Any Port Master Plan of Pakistan should envisage the proper co-ordination of port infrastructure development. Such development must cater for the interest of investors in such infrastructure, the port authority representing the nation and support the long term economic development of Pakistan. In the context of such infrastructure development, there has been initiatives to build container terminal facilities in the Karachi Port and Port Qasim. 

Terminal II of Port Qasim is expected to completed and operational soon. Karachi Port Trust is in the midst of executing the development of the Pakistan Deep Water Container Port (PDWCP) at Keamari Groyne. These developments will bring onstream huge facilities in the next five years and should serve to put Pakistan on the regional maritime map. These facilities involved billions of dollars, after serious consideration by all concerned -investors, governments, and port authorities. 

Having poured in billions of dollars, investors do not wish to see a disorderly and disparate expansion of excessive facilities only to drive the revenue down to a point where they see their investment. Experience in the other parts of the world have shown that a disorderly expansion of facilities will lead to dangerous trends with disastrous impact. 

Firstly, existing operators will adjust prices downwards to cater for their short term interests. Secondly, lower prices will mean lower royalties for the government and the port authority. Thirdly, such a downward spiral will translate into lower revenue in the form of profit tax, and other taxes related to prices of logistics services. Fourthly and most important, lower revenue collection will result in much lower funding available to the port authority and government for the development of future infrastructure. 

Fifthly, the downward spiral in revenue may lead to a point where investors find it unviable to bid for future phases of a container port. This is economically disastrous, where the government has already sunked in mega-sums on the basic structure, which cost are to be spread over a few phases. In summary, one can say that a disorderly expansion of port infrastructure will only serve to waste money but will also squander the golden opportunity of our strategic location endowed upon us by the Almighty. 

The solution to this could be a trigger rule adopted by those who direct the strategic policies of port development as seen in Korea. In the years prior to 2005, Korea suffered from excessive supply of container terminal infrastructure, resulting is total lack of interest from private operators in their PPP arrangement. 

The scenario was so chronic that the Korean government had to find creative ways to utililise such facilities, turning tracts of container handling space into movie studios, resulting in a reputation of Korean movies in Asia today. The lessons were painful and Korea has today implemented a trigger rule ie that new facilities will be developed in line with market. When capacity reached a certain strategic level, say 70%, new facilities will be developed. 

I, am of the opinion that concerned Ministry, Planning Commission must put their heads together with Port Consultants of repute to ensure that just in time philosophy and strategic level of 70% be followed to avert surplus capacity. The development of at least Karachi and Port Qasim be co-ordinated and monitored by planners. Port Management is a very complex subject today and it requires expertise in various fields related to ports, be it planning, bench marking in Port cost or qualitative requirements. 

Despite 10% contraction of container throughput in 2009, drewry has forecasted containerised growth in South Asia 4.7%, whilst the Far East and Middle East to grow by 4.3%. Most of the loading terminal operators are said to be adding capacity to their network by 2014. It is also opined that global terminal operators scope to achieve organic throughput growth will be limited by the recession and its impact on world GDP growth, thus our planners must take into account the Drewry's most authentic forecast till 2015 and our GDP of 1% for creating additional capacity. The planners of KPT has to bear in mind shifting of 4 mill tons cement and coal initially in phase I when PIBT terminal at PQA will be operational by 2012/2013 and fertiliser to FAP terminal as same is now operational at PQA. 

The planners must ensure that instead of KPT and PQA competing each other, they may co-ordinate and complement each other by ensuring same tariff regime, as the case in India where tariff authority of major ports ( TAMP) is responsible for uniform tariff. It is equally essential to bear in mind that ISAF cargo adding 3/400,000 TEUS will also be gone, once USA pulls out of Afghanistan. Planners must ponder professionally as opportunities are like sunrise, if you wait too long you can miss them. Excellence in profession is not an exception, it is a prevailing attitude that our planners have to bear in mind. Nine tenth of wisdom consists in being wise in time as President Roosevelt said. 

Monday, September 20, 2010

Let us treat the seafarers with dignity

When I joined foreign merchant navy cadet training ship after my graduation as a cadet in 1963, life at sea was different. As a young entrant it was always very exciting to call at new far away ports, see new lands, meet new people and, of course, get to know about their history and culture. By choice of our unique profession, we contributed to the world trade, but in the process, made new friends. Almost 90% of the world trade is still sea-borne.

How many of us ever thought of the fact that if all the sea-going ships were to be tied up in ports for merely two weeks, we would probably find the supermarket shelves empty. Today's hectic modern lifestyle could come to a standstill. 

The subject of this article is about the seafarers, who keep these ships operating all over the world. If one wants to single out a community that has contributed more than any other to the cause of international trade and commerce, then it has to be the seafarers. This is a community that remains out at sea, away from their near and dear ones for months at a time. There is no denying that it is their profession by their own choice, but in the process they contribute so much for the cause of international trade, commerce and communications. This, in turn, gives rise to friendship and closer relationship amongst nations. In today's world of open door competition, seafarers from several developing countries work together on ships in the spirit of friendship and brotherhood. In recognition of their special role, the seafaring community had always been treated with love, affection and respect. Ports around the world used to have recreational facilities to provide a home away from home. 

Unfortunately, things have changed. There are two factors. An incident in the year 2001 commonly referred to as 9/11 has, perhaps, caused more change than anything else. Terrorists' actions in the US, Kenya, Spain, Bali, Pakistan, India and many other places claimed thousands of innocent lives and took away our peace of mind. The terrorist threats continue to exist and nobody knows for certain when and where the next will occur. Everyone has to be on guard to deny any further chance to the terrorists. However, we must not suffer from any terrorist phobia. 

If we give up our modern lifestyle and do not enjoy the fruits of the modern civilisation built over ages, then we help the terrorists achieve their goals. This is one reason why the United Nations General Assembly Resolution A/RES/57/219, "Protection of human rights and fundamental freedoms while countering terrorism," affirms that states must ensure that any measure taken to combat terrorism complies with their obligations under international law, in particular international human rights, refugee and humanitarian law. Not granting shore leave to innocent seafarers in the name of security threat is nothing other than depriving the seafarers of their age-old tradition of recreational facility. It amounts to violation of human rights and dignity. The US stands at top, whilst India and Pakistan, despite Shipping Protocol signed in 2006 deny shore leave to seafarers. 

The other factor is a serious nature of high profile ship related pollution cases around the world. Rightly or wrongly in most cases the master and chief engineer of the subject vessel is immediately arrested and put behind bars like a criminal. The seafarers are kept in detention for days together without even any formal charge and in some cases without any access to lawyers or solicitors. This is certainly gross violation of human rights. 

The concept of natural justice of being innocent unless proved guilty is brushed aside and it falls upon the seafarers to prove that they are not guilty. The local authorities are always very eager to look to be doing something. The easiest thing to do is to put the master and chief engineer behind bars. Sometimes the marine professionals are the easiest scapegoats for the failure of others, thereby diverting the attention when the issue is fresh and burning. 

The tanker "Prestige" suffered structural damage in heavy weather and the master's request for a place of refuge was refused. Instead the Spanish authorities towed the vessel 133 miles away from the coast of Spain, exposing the damaged vessel to further perils of the sea for six days later, she sank. In the opinion of salvage experts, in a suitable shelter, the vessel could have transferred most of her cargo to other vessels and any limited spill out could be contained and later recovered/skimmed off. 

Nobody questioned the decision of the local authority; instead the master was arrested immediately despite having complied with all the orders and instructions. The suffering that Capt. Apostolos Mangouras underwent in Spanish jail is known to all. In any case, the "Prestige" incident taught us two important things. It has now become a part of the SOLAS for coastal states to have designated shelters. It also identified the need for pre-arranged command structure, which the UK has now done in the shape of a SOSREP. 

In case of the tanker " Tasman Spirit," which was under advice and guidance of fully licensed local pilot, it is again the master and crew of the vessel, who were remanded in police custody immediately after the incident as if they conspired and put the ship aground. It was later revealed that Pakistan was not even a party to Civil Liability Convention and the arrest was an effort to ensure that damages can be recovered to cover their incompetence. The innocent seafarers had to suffer for shortcoming on part of the government officials. There are many more such incidents where seafarers had to suffer for no fault of their own. The enquiry, conducted by professionals, has not been made public as yet, nor record of any recovery. 

Now we look at another incident - this time it is not a ship but an oilrig named "Deep sea Horizon" that exploded in the Gulf of Mexico off the coast of Louisiana, United States. The blast not only killed eleven persons but also caused the worst ever pollution known in human history. I have not heard of any police arresting any master, engineer or any other person. 

However, all measures have been taken to stop further pollution, clean up the spill and compensate all qrr3d53e. Inquiry and investigations are under way. The cause of the blast will be found and remedial action will be taken to avoid such explosion. It does not rule out punitive measures against any individual found to be negligent. That is the right way forward. 

Denial of shore leave and locking up ship's officers as the first action for any pollution incident is wrong. Being aware that seafarers work and live on ships involved in the international trade and that access to shore facilities and shore leave are vital elements of the seafarers' general well being, therefore, to the achievement of safer shipping and cleaner oceans, all coastal states should make recreational facilities available for the seafarers and allow them normal shore leave facility unless there is specific reason not to grant such facility to any individual. Asking them to obtain prior visa from the seafarers country of origin amounts to denial of shore leave because sudden change of programme may lead to unexpected destinations for which they were not prepared at the start of the voyage. 

Criminalization and victimisation of seafarers for no fault of theirs is barbaric and inhuman. With regard to the incident of "Prestige," Captain Roger MacDonald said "It should be of great concern to every European Union national that a democratically elected European government got away with the locking up a ship master for three months in a high security prison without charge and without access to lawyers". The Secretary General of the International Maritime Organisation said 'punishing treatment meted out to seafarers, on whom international sea-trade and prosperity of nations depend, was not only disrespectful, wrong, unfair and unjust but also contrary to international law. 

The United Nations Convention on the Law of the Sea is the paramount convention on all sea-related matters. We should, therefore, try to achieve our primary objectives through UNCLOS82. Article 73 and 292 of UNCLOS-82 have clear provisions against unreasonable detention of seafarers and for their release against suitable bond or guarantee. Article 230 is very specific that monetary penalties may be imposed to control pollution of marine environment except in the case of a willful serious act of pollution in the territorial sea. 

In the field of marine environment, there are a number of international instruments to deal with various aspects of ship related marine pollution. They range from the subject of control and prevention of discharge by oil, chemicals, garbage, sewage and even exhaust by different annexes of the MARPOL-73/78; There is OPRC-90 that deals with preparedness and response (national as well as regional) in case of accidental pollution (how to contain and restrict and then the clean-up); There is Intervention-69 that gives powers to a coastal state to take pre-emptive precautionary action should it feel threatened by an accident or incident; In the field of compensation regime it has got CLC-69/ 76/92 to pay for, by the carrier; There is Fund-71/ 76/ 92/2000/2003 to pay for on top of CLC. The importance of protecting marine environment has gone to the extent of imposing restrictions and limitations on exchange of ballast water and use of anti-fouling paint on ships. These instruments are the outcome of lead given in the UNCLOS-82. 

There should be no need for putting people behind bar unless there is evidence of deliberate action or willful misconduct. Arresting people for cheap publicity or popularity should be discouraged. The recent surge in piracy at the horn of Africa has taken toll of many seafarers, recently a Pakistani Capt. Jaffery was killed being a hostage. The pirates are operating whilst the world navies combined joint task force - Horn of Africa (CJTF - HOA) are guarding Gulf of Aden, Horn of Africa, Arabian Sea up to Sallalah, but piracy remains deadly for seafarers, a real mind boggling issue to understand who is sponsor and beneficiary of piracy, but victims are seafarers only in this chess game, whilst settlement of release of hostage and ship are said to be made by London lawyers and ransom is collected. 

On the occasion of the World Maritime Day, the Secretary General of IMO said in a message to the world's seafarers "Our intention is to pay tribute to you, the world's 1.5 million seafarers - men and women from all over the globe". 

As a seafarer, I say the best tribute we can pay to the seafarers is to do something which will prevent them being bullied in future. I call upon both IMO and ILO to work together to prepare a draft document and then call a diplomatic conference to adopt a convention under title "Fair treatment to Seafarers". The document, with all due respect to the sovereignty of every state, should make it binding upon them to ensure that visiting seafarers are given shore-leave (without insisting on prior visa) and that states should provide such recreational facilities as are considered appropriate to their history and culture except where there is reason for not granting such shore leave. 

In case of accidents or incidents resulting in loss or damage to human life, property or environment, the state, which has the jurisdiction, may inquire, investigate and deal with the matter in a manner acceptable under international treaties, practice and procedures. The flag state of the vessel should be involved in the process of investigation. Unilateral arrest of seafarers should be avoided unless there is clear evidence of deliberate misdeeds. Where arrests are already made, the seafarers should be treated with dignity and be provided with full access to legal support for grant of bail. Unless criminal negligence is established, monetary fine/ penalty should be preferred to jail sentence. 

Wednesday, August 4, 2010

Maritime industry - corporate social responsibility

It is indeed commendable that our national flag carrier in a recent board meeting has taken the initiative of corporate social responsibility, rewarding PNSC afloat staff on yearly performance. The new management is dedicated not only to keep the organisation in green, but has embarked on replacing old tonnage. 

The welcome news is induction of two double hull Aframax Tankers and plans to purchase a bulk carrier. The management is fully alive to its responsibility and, being public sector organisation, is making profit without any liability on taxpayers. The accelerated growth in tonnage is good one and even private sector is willing to join hands with PNSC, due to its performance, based on market reports. 

Shipping is able to boast of its history and tradition that few other industries can match. And yet it remains as relevant to the modern world as it has ever been, perhaps, even more so because, without it, today's global economy simply could not function and half of the world will freeze. 

The legacy that seafarers hand down to one another is one of the pride in a job well done, of attention to details, of innovative skills assiduously learned and in short pains-taking application of seamanship. It is widely predicted by maritime analysts, that unless something is done sooner, shipping is bound to face manpower crisis and there will be acute shortage of qualified officers to manage the ever-increasing world fleet. 

There is a strong evidence that today educated young population does not find it an attractive career, thus industry cannot ignore the current shortage of good entrants. It is on record that in the recent past, shipping has done well to improve its safety/environmental records and complied with the stringent regulatory regime of IMO. 

Recently, STCW 95 has been revised in a diplomatic conference held in Manila, thus it is imperative for the industry to complement the simultaneous developments with sense of corporate social responsibility to attract young educated officers. 

Unfortunately in the past, there was no formally established and internationally accepted standard or principle for CSR and nobody was clear as to what the concept means and its application. It was addressed by the international standard organisation and now the ISO 26000 is the principle of CSR. The UK nicely summed up in a seminar, attended by me, that CSR is about how a business takes account of its economic, social and environmental aspects in the way it operates maximising the benefits and minimising the downslides. 

The world business council for sustainable development defines corporate social responsibility in the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as local community and society at large. 

It was heartening to note that the management of PSNC has comprehended the issue of staff morale, motivation of brand loyalty, reputation risk and environmental sustainability, widely recognised as drivers of competitive advantage. CSR has come to mean more than charity or philanthropy. It has moved from margins to mainstream of corporate strategy being inter linked objectives of doing business. 

Needless to mention, in the 19th and 20th early century industrialist luminaries, W.H. Lever, George Cadbury, Rockefeller exposed visions of content, healthy and as a consequence, efficient workforce to place their countries on world map. Today environmental considerations, the fair treatment of workers and the duty of care businesses have toward their customers are of increasing concern. The status of employee as a " sensitive asset" has led the companies to perceive the value of creating work place attractive to applicants and corporate values that are aligned to wider social interest. 

Ships today are indeed technologically advanced, workplace and, in future, it may be controlled by a single joy stick and a mouse ball in the arm of helmsmen sent out, and engineers will have probably clean hands and the calluses on their finger will be from tapping a keyboard rather than wielding a spanner. The crew accommodation will be clean and food will be good. I simply wonder if we are preparing for future by training the educated officers strictly on merits and changing the syllabus of our training academies and school. 

Pakistanis need to work hard to remain employed on the ships of the future and there is a dire need to recruit quality officers and train them for future needs. Shipping is no different from other industries, and it was pleasing to participate in a seminar organised with the support of PNSC at Karachi where shipping was introduced to audience from different walks of life, ie businessman, bankers, insurance and investors, a first ever good effort to market the industry. 

In Pakistan, shipping still suffers from relatively poor public image, probably through lack of understanding of its true importance and the fact that it only seems to grab the headlines when, an inevitably accident or pollution occurs as was the case of M.T. Tasman Spirit in 2004, which spilled 30,000 metric tonnes of crude oil. 

The unique hazards confronting the seafarers are pirate attacks, unwarranted detention and abandonment, which serve as disincentive to recruitment, although seafaring is potentially exciting, financially rewarding career. Shipping carries more than 90% of the world trade safely, but it surely needs to attract and retain the sort of educated, qualified and motivated workforce of high calibre, to secure its own future, but without CSR application, it may not attract qualified educated youth. 

The most welcome development for the seafarers is the adoption in 2006 of the International Labour Organisation (ILO) consolidated maritime convention dealing with seafarers working condition. I am proud to be a contributor at ILO and I hail this as the fourth pillar of regulatory regime for quality shipping, complimenting three IMO key conventions, SOLAS, MARPOL and STCW these treaties address the all-important social dimensions. 

The IMO has launched go to sea campaign in 2008, which has been endorsed by all seafaring nations except Pakistan where it did not receive any attention, although we have young educated youth, who can readily fill the world seafarers shortage only after intense training. 

I hope some realisation may dawn on the concerned ministry to use this window in time, getting our due share in world maritime jobs. The IMO has declared 2010 as year of the seafarers, thus appreciating the 1.5 million seafarers, who are serving the industry. 

The concerned ministry may pick up the blueprint of PNSC-CSR and implement same through the government shipping office as incentive to seafarers working on foreign fleets remitting about 100 million dollars to the exchequer. The problem of the global seafaring shortage of 34000 persons can only be resolved through CSR initiatives by the ship owners, industry and concerned ministry. 

Sunday, June 13, 2010

Budget: common man's Perspective

Whilst Karachiites were all set to brave the much created media hype of cyclone (tropical revolving storm), they were actually scared of "budget storm". In spite of the cyclone hype, businessmen gathered to listen to the budget speech at various trade forums. 

The presentation made by Finance Minister Dr Hafeez Sheikh, at times extempore, was highly commendable and it can be described as excellent presentation of a technocrat. However, it was intriguing that a man of his calibre used undesirable political rhetoric, compromising his stature of an economist and academician, unless one is set on course for further elevation as had been the case with his predecessor in the last government. How true the minister said that the budget document may not be construed as final document, thus more significance be attached to policies thereafter. 

The first spell to be felt is the increase in the tariff of KESC, and that too from retrospective effect and it is said to be Rs 1.70. Presently we are paying Rs 11 per unit inclusive of all taxes, which will be increased, along with recoveries from the consumers. The budget document caused disappointment as it has miserably failed to provide any incentive for revival of economy and job opportunities. There are serious doubts expressed by an economist on fudging of numbers in the GDP growth and inflation. 

We were expecting that the learned finance minister will prevail upon the government for austerity measures aimed at cutting down expenditure of the government, instead he came out with the novel idea of freezing the expenditure, which is at its peak. The budget is a bureaucrat-designed document with the IMF dictates. 

The GST, being increased to 17%, may fetch Rs 120 billion instead of Rs 80 billion through imposition of VAT, to meet the increase in pay and pensions of gigantic bureaucratic surplus machinery of the Federal government an epitome of bad/poor governance, who are given enormous pay rise without monetizing their benefits received in kind. No saner person opposes increase in salaries of the government functionaries and they should be paid market-based salaries. The only austerity measure announced is a 10% decrease in pay of the regiment of ministers, which is an eyewash with hardly any impact. 

A classic example of austerity in Britain, Greece and Spain may be studied as of today. Ministers are not allowed chauffer-driven fleet of vehicles. We tried some austerity at Junejo's time, but efforts were stalled, thus try again. 

It is equally sad to see that instead of increasing allocation to education, it has been trimmed from 2.5 to 2% only and that too is not spent prudently. The private sector is operating schools on commercial basis. Those who can't afford private schools, will remain illiterate. If we fail to invest about 7% of the GDP in education, there is no hope for a better future. The nation needs quality education, thus it is recommended that the armed forces, who are disciplined and imparting quality education be asked to establish schools on behalf of the government to provide quality education, creativity and innovation to our youth. The armed forces have track record of managing excellent learning centre. There is no denying that education is an essential preparation for life and work in an advanced economy. 

Modern economics require skilled and motivated workers, who can earn only profit from the opportunities they afford if they are equipped to respond to their demands. The best gift of Pundit Jawaharlal Nehru to India was Indian Institute of Technological Sciences. I had an opportunity in 2007 to visit the IITS and it was fascinating to see their technology farms, where research and development work was done. India's growth has been led by services sector, contributing 62.6 percent to their GDP whilst industrial and agriculture sector contributed 20 and 17.5% respectively. It employs millions of skilled people in (BPO) business process outsourcing. India has 200 recognised universities and in addition, it spends 4 billion dollars on youth for higher studies abroad. India's GDP is led by qualified professionals only. 

The Germans after World War Two, dedicated themselves to education and they are the third largest economy worth 3.0 trillion dollars due to education only and most of us know that their head of state is still known as Chancellor as Germans declared the whole country as university. 

We need to declare Jihad for education and this may not be left to inefficient federal or provincial ministry of education, but the sum allocated to education be given to army education corps to establish schools of excellence where even poor rural population can enter on purely merit. 

Aristotle said that education is an ornament in prosperity and a refuge in adversity. I hope Dr Hafeez Sheikh may give due credence to my humble submission for the sake of posterity. I assume that a new scam in respect of CFL is in the offing, unless transparent rules for its procurement and foolproof mechanism of distribution through private sector is not planned. 

There is a dire need to check the leakage of 500 billion rupees in the FBR. The FPCCI and its President have strongly advocated an end to this haemorrhage. This money should be used for debt servicing. 

I am convinced that Dr Hafeez Sheikh due to paucity of time has not been able to take feedback from the market and relied heavily on a prepared document, balancing the books. I also feel that that he has not given his input or not permitted to re-cast meaningful distribution policies that may benefit the masses below the poverty level. Nothing is lost. Now that Dr Hafeez Sheikh has time, he may look into the document and give his professional input and benefit the poor masses in future policy documents as he believes that the budget is not World Cup 2010 a family affair 

DAVID HEIN Family will play a role at the 2010 World Cup as Slovakia and the United States both have fathers coaching their sons, three nations have brothers in their squads and one set of half-brothers will face off for different nations. 

Vladimir Weiss was already a well known in Slovakian football history, but the legacy grew in the build-up to South Africa 2010 as Weiss coached the nation to its first-ever World Cup appearance as an independent nation. Helping the coach - at 45 the youngest team boss in South Africa - was his 20-year-old son Vladimir Weiss, who plays for Manchester City. 

To add to the confusion is the fact that the coach's father is also named Vladimir Weiss and played for the Czechoslovakia national team, including at the 1964 Olympics when his son was born. Weiss II, who played for Czechoslovakia at the 1990 World Cup, never feared calls of nepotism when he added Weiss III to the Slovak side for South Africa. 

"I was warned because there were reports that I was doing him a favour. But everyone could see that he deserved his World Cup nomination," the coach said. The Weisses are not the only father-son combo at South Africa. US coach Bob Bradley has in his ranks his son Michael Bradley of Borussia Moenchengladbach. 

"Michael is a professional player, and he understands as well as anyone how you earn respect in a group. When we're at work, that comes first," said father Bradley. "He's my dad, and he's the coach. I'm a player, and I'm his son. There's not much more to it, really," said the younger Bradley. 

But fathers coaching their sons at a World Cup is not unprecedented as Italian boss Cesare Maldini had his son Paulo as captain at the 1998 World Cup. The World Cup also has seen its fair share of brothers in the past. And South Africa 2010 is no different. Kolo and Yaya Toure are playing for Ivory Coast and Paraguay have the Barreto brothers Edgar and Diego. Honduras brothers Wilson and Johny Palacios will undoubtedly have heavy hearts despite helping the nation to its first finals since 1982. 

The pair's brother Edwin was kidnapped in October 2007 and held for ransom before eventually being confirmed dead in May 2009. One of the strangest family instances in World Cup history is the half-brother duo of Germany's Jerome Boateng and Kevin Prince Boateng of Ghana. 

Both have the same Ghanaian father with different German mothers. In fact Kevin Prince is the great-nephew of Helmut Rahn, who scored the winning the final word. It is my firm belief that the minister knows how to put economy back on rails. It gives adequate time, he may do the needful. 

There are many other measures, as I had proposed, including water reservoir on dry riverbeds thus now that the minister has time, he may interact with the private sector, trade bodies, FPCCI, KCCI and all shades to take their input so that his future policies are pristine, innovative, creative to meet the demand of today. I believe that the minister has the skill and be allowed substantial time to remove the menace of last 2 years coupled with poor governance in all shades. 

Friday, May 28, 2010

Budgetary proposals

I profusely admit that I am not an economist, nor an accountant/banker, but duly qualified in maritime commerce only, thus I am writing with caution with my limited knowledge resource. The catalyst behind my writing is a proud Memon patriotic Pakistani, friend of mine who had been former President of KCCI/SITE, Chairman, SME, and shared his view being in business on forthcoming budget. 

The way our homeland and its GDP nose-dived reeling to 2% GDP from 7.6% with growing burden of foreign and local debts, thus being salvaged by the IMF conditionalities. If the bankers can be at the helm of our economy instead of economist, at least we may be allowed to make our humble suggestion as we feel Dr Hafeez Sheikh from the previous set-up is most competent person and he is willing to listen to all shades for improvement of our economic health, which is certainly in a very poor shape. 

I would like to quote Deputy Chancellor, David Laws (Liberal Democrat), "Public borrowing is only taxation deferred, and it would be deeply irresponsible to continue to accumulate vast debts, which have to be paid off by our children and our grand children for decades to come". How true it is, that today every Pakistani carry a debt of Rs 27,000 as reported. 

The huge decline in LSM growth about 7.6% and industrial performance is not significant, except a little growth in auto sector. The high interest rate, poor governance, lack of water and power, rising law and order situation, coupled with instability for the last two years, has crippled us economically and the situation is gloomy and future is bleak. I would, strongly suggest all to read a book by Shahid-ur-Rehman named "Who owns Pakistan", a food of thought for all in particular for Dr Sheikh to devise measures to benefit the poverty ridden common man instead of elite class. 

In view of continued poor governance, rampant corruption and low calibre government functionary, I wonder as to how we expect Dr Sheikh to deliver and salvage the economy. The FBR is all set to impose the VAT and emphasising on revenue growth only, rather than employment generation, as unemployment is soaring and our populace with median age of 17/21 years are running from pillar to post for bread and butter. The inflation and ever-rising commodity price, be it edible or non-edible, is biting severely those who are even employed. The irony of fate is this that the masses are paying 222 billion rupees plus 100 billion rupees in pension to government officials for the poor governance and about 400/500 billion rupees are dished out to armed forces, leaving a very insignificant amount for PSDP, health, education and welfare of masses. 

Can Pakistan afford a regiment of Federal/provincial ministers and trips abroad. I, wonder if the Finance Minister will be able to restrain the government to cut down their expenditure, rather only going for imposing more taxes. The ex-banker Finance Minister pinpointed that only in the FBR 300 billion rupees are siphoned away due to flying invoices and GST returns etc. In spite of gloomy and bleak future and loss of my productive time, it is incumbent upon me to make some humble suggestions to our learned Finance Minister. 

-- Focus on employment generation rather than revenue generation. 

-- If the VAT is imperative, the government may exempt edible items, medicines senior citizens, education and service sector and delay it for next year. 

-- Rationalise import duties in consultation with the trade bodies for domestic industries to survive. 

-- Facilitate mineral exports by providing freight subsidy and hinterland connectivity. 

-- Facilitation to entrepreneur and good understanding with regulators can create confidence and may help in documenting the economy. 

-- Explore windows available in the region for employment of our skilled youths. 

-- Low-cost housing, may create a stimulus for unemployed labours and construction industry. 

-- The SME sector plays a vital role in our economy and my friend Chairman of SME Bank recommends that Rs five billion be injected, rather than privatising it. 

-- Revisit of Laws, rules and regulations: It is equally important that we must bring our laws in line with civilised world and ratify international conventions, so that FDI, may reflow, investors are shy due to obsolete laws. 

-- Power sector: Our growth and exports will keep on suffering, unless we embark on more hydel generation, by building Kalabagh and harnessing all resources for cheap hydel energy or coal energy, instead of relying on thermal based, IPPs or new concept of dubious RPPs. The US has already agreed to overcome our energy crisis and has pledged 1.14 billion dollar to partially finance the 19 energy initiatives mostly renewable power projects. The USTDA has already invited Pakistani delegation to the US, for baggasse-based co-generation projects at sugar mills. Power generation cost is very low as the baggasse is available at no cost. 

According to USTDA report, 2000 MW of energy can be generated by 2012. Coal, wind, solar power projects may also be considered to reduce the soaring oil import billion of 11 billion dollar. Thermal-based RPPS must be discouraged as our exports can't be competitive with high utility tariffs. 

-- Making of misadventure in case of distributing 30 million high quality energy savers be discouraged. It is true that Asian Development Bank is investing 40 million dollar in the energy efficient cost-effective compact fluorescent lamps and the government will invest 65 million dollar to distribute free energy savers to the masses. 

It is not a bad idea as the studies revealed saving of 1100 MW at peak demand and it was practised decades back in the US and civilised world. There is no denial to this fact, but the advance countries are now popularising LEDs which has life up to one hundred thousand lighting hours and consume only one-third energy when compared to CFLs. I feel that in the allocated amount of about 125 million dollars, we may be able to assemble 30 million LEDs bulb locally, which in addition to saving energy, may create employment for 1000 people. Government and Asian Development Bank may consider a study before making a misadventure as we may respond to the latest available technology only. 

Maritime employment: I have been pinpointing that world maritime industry is suffering shortage of 20,000 officers, thus window is available, so we may train our youth to fill the slot and improve our home remittances from 70 million dollars to min 200 million dollars. 

Remittances: The government has taken good initiative and remittances have improved through banking channels as it has helped us largely in these hard time, but there is till room to induce overseas Pakistanis so that we may achieve a target of 10 billion dollars instead of 7.5 billion. If Bangladesh and Philippines can do so, why can't we. The US State Department describes remittances as development resources and place them in category of domestic savings and foreign private investment. 

FDI: The government must address the reason of drop in FDI by 48.9%, a serious situation, thus it calls for identifying the reasons of fall and address the issues to improve flow of FDI in manufacturing sector not only in services sector. We all know that telecom sector in the past was biggest contributor of FDI, however, all efforts to be made to induce entrepreneurs in manufacturing sector. 

Improve export: Pakistan can improve its exports to bridge the trade deficit, as statistics available show that Bangladesh is exporting worth 19 billion dollars, thus we can do better. TDAP has to play its due role efficiently and be given target of min 25 billion dollars and be monitored. 

LNG imports: A lot of base work was done in 2005-06 to build LNG terminal at Port Qasim,, therefore it is imperative that we go full speed ahead in building the LNG terminal as natural gas contributes 49% to our energy consumption. The gas demand is expected to exceed supply by 4 bcm by the end of 2010. The gap will widen to 44 bcm by 2020. We must conclude agreements to import LNG as India has built two terminals at west coast Dahej and Hajira so is Singapore and all are operational. Let us give a kick-start to the LNG import to bridge the gap, before it is too late. 

Water scarcity: Whilst India continues to build Dams on our 3 western allocated rivers under Indus Water Treaty and all our efforts have been to no avail, thus preserve whatever water we get by adopting drip irrigation, water lining of our canals and arresting the seepage. We may construct small dams on monsoon fed dry river beds to conserve water at every cost to meet the food need of growing population. Plantation of more trees to save the climate change and go for water-shed management. The government is well advised to allocate handsome amount for building of small dam for dry season, which is achievable in short period with strong will and dedication. 

I personally feel and remain confident that if Dr, Sheikh is given a free-hand, he has the skill reputation of achieving in the past, so why not now. We must ponder coolly that we can't survive with present GDP growth as even Bangladesh, Nepal and Sri Lanka have fared better than us. India is doing well with 7.5% GDP, so is China set to 10% GDP growth. The option is either to give up or face the challenge bravely for the sake of posterity. The government must cut down its expenditure and invest more in PSDP, health and education with better governance to achieve our targets. It is better to light a candle then to curse the darkness.