'This country should be run to make businesses thrive, not just to run a government,' Muhammad Zubair Khan, former Commerce Minister
Dr Muhammad Zubair Khan is currently CEO of a successful start-up company producing Pakistan's only internationally certified natural mineral water called O1 (www.o1naturallypure.com), and is also an international consultant in macroeconomic issues with over two decades of consulting experience with donors and multilateral institutions. He spent over a decade with the IMF, before serving as Pakistan's Commerce Minister from 1996-97.
BR Research met with Dr Zubair to discuss a variety of topics ranging from CPEC, trade to taxation and state-society relations. Below are edited transcripts of the refreshingly candid, wide-ranging discussion.
<B>BR Research: Let's talk about CPEC. What is China's interest, and why now?</B>
<B>Zubair Khan:</B> CPEC is a great opportunity for Pakistan. But it is also of strategic economic significance to China. There's the south-China sea confrontation between the US and China. The straits of Malacca are a bottleneck; it's a major threat to their energy pipeline. CPEC provides the alternative route for China's energy supplies.
Why now? Firstly, they could not come earlier because the US was in Afghanistan. Secondly, the US was destabilizing Pakistan with India's help. That has been successfully defeated by our Zarb-e-Azb. So now, China announced CPEC. And within six months, they've sent the first convoy.
<B>BRR: What advantages do you see for Pakistan from CPEC apart from the investment?</B>
<B>ZK:</B> Because China's large economy has become intertwined with ours, we should be able to benefit. How? Along with the infrastructure, they want to develop power as well. Tying their economic future with Pakistan's wellbeing, Pakistan will not need to get into an arms race with India. Now, the future of Pakistan's defence lies in the mutual defence of China and Pakistan. China is a source of stability in the region.
Other advantages depend on whether or not the people are enabled to benefit from the Chinese investments. You need to enable your people and reduce the cost of doing business to benefit from the ancillaries and the offshoots. The main thing is that the route forms an alternative to the shipping routes. Industries could get located along it or close to it and from there they will export to the huge Chinese market, whereas Chinese businesses will also relocate along the corridor bringing employment and will be exporting abroad from there.
<B>BRR: Does private sector have sufficient information about CPEC? Our experience leaves us to believe that they're in an information void.</B>
<B>ZK:</B> Same with me. All I know is that there's this road going down, and the Chinese will be using it to transport their goods to Gwadar. This is what I know.
<B>BRR: Is our trade and logistics infrastructure ready, say for instance the TIR. What are the main issues regarding implementation of TIR in Pakistan?</B>
<B>ZK:</B> You've got to have the right kind of transport vehicles, which will get TIR carnet. Each country has an organization that gives an assurance or guarantee against anything that violates the customs declaration. This institution is normally a semiautonomous, non-government institution. We don't have one. Afghanistan has been member of TIR since mid-80s, but it hasn't used it. Recently they issued two carnets, but what difference did it make?
When they send a truck, we say there's smuggling. They say you're stopping our truck, our perishables are suffering. Putting it in the international regional context, you've got to have the trade facilitation mechanisms in place; it needs to be smooth and efficient, so they can e-read it, all of the details (what's in the truck, where is it going, what's the driver's name) is given in one flash. Only then can 1,000 Chinese trucks pass swiftly in one day. Otherwise it can't happen!