Better late than never


WEB DESK: The Economic Co-ordination Committee of the Cabinet (ECC), the highest economic decision making body in the government, chaired by the Federal Finance Minister, has finally approved the extension of tax concessions under Gwadar Port Concession Agreement for Operation and Development of Gwadar Port to those establishing businesses in the Gwadar free zone for a period of 23 years.

The decision was overshadowed, with some critics maintaining diminished, by the announcement of a tripartite agreement between Pakistan’s three neighbouring countries namely India, Iran and Afghanistan to set up what is being widely seen as a serious competitor to the Gwadar port: the Chahbahar port in Iran which would be financed and developed by India.

This agreement was signed by heads of the three governments – Modi, Rouhani and Ashraf Ghani – and is envisaged as a route that would provide an alternate to Central Asian Republics (CARs) to trade with the rest of the world. One would be compelled to assume that this agreement is India’s proactive response to the China Pakistan Economic Corridor (CPEC) whereas previously it had limited its response to voicing its serious reservations.

It is unfortunate that Pakistan, long seen by our successive heads of government, as the major natural geographical connector between the Central Asian Republics and access to a warm water port in Gwadar may lose the advantage if the India, Iran, Afghanistan agreement to develop Chahbahar port is successfully implemented. While it is true, that Afghanistan remains a wild card with its failure to resolve the Taliban issue, implies disruption of any trade route through Afghan territory, yet one would hope that in future our government takes prompt actions in the national interest instead of delaying decisions that provide fodder to our traditional rival India.

Be that as it may, analysts argue that the Sharif administration had, in all probability, assured the Chinese investors that tax concessions to businesses operating within the environs of Gwadar port free zone would be extended well before the actual approval by the ECC as otherwise Chinese investment may not have been forthcoming. But a formal approval by the ECC and subsequent notification is critical prior to the extension of any concessions and this is surely known to all ECC members, including the chairman.

So what could be the reason for the delay in formally approving tax concessions to businesses operating in the Gwadar free zone by the government? The official line is that the ECC had on a summary moved by the Ministry of Ports and Shipping directed that a committee be set up, to be headed by the Special Assistant to the Prime Minister on Law, to review the proposals which were considered by the ECC on 12 April.

These were reviewed again in a meeting on 5 May in which a consensus was reached with the approval finally granted on 23 May. Others argue that this delay maybe rooted in Dar’s extremely challenging responsibilities and associated engagements – he heads more than 35 committees – which are only increasing with time. Recently, the prime minister approved and sent his name, together with that of five other federal ministers, to the Speaker of the National Assembly as the government’s representative on the parliamentary panel to determine the terms of reference for the judicial commission to investigate the Panama papers.

This committee is expected to take much time of the finance minister in the next few weeks though one would have expected him to focus at this time on the budget 2016-17, his primary responsibility, which is due on 3 June. To conclude, it is high time for the Sharif administration to acknowledge that world events/decisions do not revolve around the speed (or lack thereof) of its decision making potential and that with India under Modi dedicated to eroding our relevance in international affairs time is of the essence.-Business Recorder