Forward-looking experts have long resolved that the antidote to Pakistans slow-motion economic implosion is trade, and not aid. Proponents of this school of thought maintain that the common man wants to work hard to earn his livelihood, instead of just being handed a meal.
And, for just as long, theyve had their eyes set on markets in the West. In a reversal of fortunes, last week the European Commission decided to offer Pakistan concessions. Similar requests had been rejected before on various grounds.
In the aftermath of the floods, Pakistani diplomats at all levels - from the President and PM to cabinet ministers - reiterated the need for development of industry, creating jobs and hopefully stability. They requested special concessions like those that had been awarded to Sri Lanka and Haiti in recent times.
Though, it didn receive unanimous approval, with France and Italy dissenting to support their domestic textile industry, the concessions to Pakistan are expected to reduce tariffs and duties to the tune of $400 million over the next year. The primary motive is to ensure stability through the reduction of unemployment.
Even if it sounds like a pittance, the fact is, that the international community has thrown a tester rope Pakistans way. But its a triumph for the untiring diplomatic efforts to achieve greater market access to the country that Pakistan trades with the most.
Exporters, mostly in the textile sector, ship about a quarter of the countrys exports to the 27 countries that collectively form the European Union. As details of the concessions are revealed, once its inked in mid-October, a clearer picture of the economic impact will emerge.
While the trade concessions, it seems are not specifically targeted at a certain industry, the major benefactors will be the exporters in the textile manufacturing sector. Industry leaders have received the news positively and are hoping to make the most of the opportunity.
Preferential trade is accorded to countries awarded with coveted GSP-plus status. Pakistan has previously been rejected by the EU on human rights grounds. Media reports now suggest that the status may be awarded to Pakistan, if it meets the human rights conditions by 2014. Such a status may not be relevant from a flood relief point of view, but it will address longer term commercial concerns for the country. Its not over till its over. While the European Commission has agreed in principle to the concessions, the deal has not been finalised yet. In the next few weeks, conflicts of interest with EUs trading partners in the region will be assessed.
Diplomats must not count their chickens before the eggs hatch.