Business...Profits of peace By Riaz Khan Daudzai

For more than half a century, Faiz Muhammad Faizi's family has depended on India for its livelihood. The trader's grandfather was the one who came up with the idea of selling herbs to the neighbour and Faizi is now the director of one of Peshawar's largest trading companies: Haji Noor Elahi & Sons.

The business model is simple: Faizi imports licorice roots (mulathi), asafoetida (heeng), cumin and alkant roots (ratanjot) from Afghanistan, processes them in Peshawar and then dispatches them to India earning, he smiles, "over 200 to 300 percent profit, that too, in foreign exchange". The amounts may seem like peanuts to some: Faizi says he exported licorice plants worth over Rs210 million this year while the export numbers of asafoetida, cumin and alkant roots also ran into millions. But the profits are not to be scoffed at. "I import licorice roots at Rs5.50 per kilogram and sell it for Rs57, which is at a profit of over 300 percent," says Faizi. "The import price of cumin is Rs10 per kilogram, which I sell for one dollar to India. Alkant roots I buy for Rs12 per kilogram and sell for 80 cents."

For traders such as Faizi in Khyber Pakhtunkhwa, facilitating business is the way the two nuclear-armed neighbours can achieve an enduring peace. Some of them who export or re-export a variety of locally produced or regionally sourced goods to both India and Bangladesh see the recent thaw in the trade ties of Pakistan and India as a paradigm shift that will ultimately result in more porous borders.

Already, say the traders, they're doing decent business; the need is to pump up volumes. "Cement already tops the list of export items to India and the two cement factories in the province are receiving orders for a daily delivery of 500 tonnes," says Faizi. Meanwhile, he says, rock salt, gypsum and soap stone are also being exported to India although the total worth of these exports is just a billion rupees annually.

"The pharmaceutical industry is the fast growing sector in Khyber Pakhtunkhwa and they import raw material from India and China," says Faizi, recounting stories of his friends in the sector. "But for this industry to really take off, they need to be able to send the finished product to India, which is a huge market."

(That India still grants only single-entry, single-city visas to traders, mostly with police reporting, is another sore spot.)

Faizi and friends are therefore supporting the grant of Most Favoured Nation status to India and hope it will pave the way for the signing of the Free Trade Agreement. The tariff and trade barriers on goods and services, they argue, can be normalized - if not eliminated just as yet - once the two countries implement SAARC's South Asian Free Trade Agreement (SAFTA). The politico-economic objective of normalisation of trade, say the traders, will also lead to the achievement of broader socio-political and security objectives.

According to Khyber Pakhtunkhwa Chamber of Commerce and Industry (KPCCI) president Afan Aziz, MFN status to India is just the first step. "I am all for trade with India," he says. "If I am anufacturing goods for America, Europe, Asian states and other countries; if I am purchasing goods from these countries, then why not from India?"

Former KPCCI vice president Muhammad Ishaq agrees. "Trade brought people closer even in the times of the Prophet Muhammad; many people who embraced Islam were among those the Muslims had trade ties with and trade was one of the instruments that brought peace among tribes," he contends. "There is no doubt that the people of Pakistan and India are now determined to have peace, even against the wishes of hawks at both ends."

Ishaq's bullishness on trade with India has just cause. "You have to look at the evolving long-term potential of India's consumer market," he insists. "If India continues on its current high-growth path over the next two decades, the Indian market will undergo a major transformation. By 2025, you'll then see India as the world's fifth largest consumer market, up from its current position of 12th largest."

While Ishaq agrees with the principle of safeguarding legitimate and genuine national interests, protecting local industry and workers, he's strongly against the caving in to unfounded prejudice and long-standing disputes. "The apprehensions and concerns of the business community can best be addressed through the exchange of trade delegations, seminars and workshops. Nothing can be worked out in isolation. Take everybody on board - even small business owners and traders - and have interactive forums which can sketch out future trade ties between the two neighbours longing for peace."

The greatest obstacle to peace and progress between two nations is unfounded prejudice. But as the French political thinker Montesquieu said, trade is the best cure for prejudice. n
The writer is a staff member.

Key commodities

Pakistani exports to India: Cement, yarn, herbs, anar dana, rock salt, clinker, hydrogen peroxide, dry dates, caustic soda, soda ash light, coal, plastic dinner sets, coriander seeds, dry fruit, calcium carbonate, lapiz lazuli rough stone, fruits, plastic material, leather, surgical goods, medical goods, raw wool, spices, specialised machinery, knitwear, art silk and synthetic textiles, readymade garments, bedwear, furniture, paper board, fertiliser, footwear, gloves and cutlery.

Pakistani imports from India: Buffalo meat, iron ore, chemicals, dyeing chemicals, cotton, garlic, potato, raw cotton, soybean, onion, green chilli, capsicum, fresh pineapple, goats, ginger, green beans, cucumber, cabbage, cauliflower and various seasonal vegetables.

Source: Independent resources

Monday, May 07, 2012

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