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profit.com.pk
Indian traders await Central Asian access after MFN grant
What the euro means for Asia REUtERS
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LAHORE
A
IMRAN ADNAN
FTER Pakistan’s decision to award most favoured nation (MFN) status to India by December 31st, businessmen and traders of Indian Punjab are anxiously waiting to get transit access to Afghanistan and entire Central Asia through Pakistan. IndoPak trade experts point out that India had recently initiated talks to get land route access through Pakistan, Afghanistan, Iran, Central Asian Republics (CARs) and Caucasian sea and three countries having already signed agreements. Countries except Pakistan and Afghanistan had already started a process to tie several loose ends related interconnectivity and customs, they underscored. They states that Indian Punjab businessmen believe that if these routes become operational, Punjab would again emerge as manufacturing hub for heavy machines, tools, pharmaceuticals, agriculture implements and textiles. It would help reviving Indian Punjab hosiery industry that compromised its share after free trade agreements with Sri Lanka in early 1980s and Bangladesh recently. They estimate that current trade between the two countries might touch $15-16 billion, if figures of legal, illegal and trade via Dubai or other countries are accumulated. They believe that non-tariff barriers (NTBs) on both sides of the border are main obstacles in liberalising trade between the two neighbours. Experts point out that refusal of trade through land route is one example as out of 1,963 tariff lines only 14 items are allowed to
cross border through land route. Only this barrier increases the cost of freight by over 233 per cent. Despite inefficient infrastructure at Customs Stations at Wagha Border, a 20-foot container crosses border through land route at $300 whereas the same costs more than $1,000 if diverted through sea route, they estimate. A cement exporter discloses that Pakistani cement has huge demand in Indian markets due to its premium quality. But, Pakistani exporters are facing great difficulty in enhancing cement exports with India. Not only Indian port authorities but also Indian bureaucracy and cement industry is creating hurdles in the way of Pakistani exports. He lamented that Pakistani exporters had to bribe Indian Railways officials and contractors to get their wagons unloaded. In a recent conference, Professor Sajal Mathur from Delhi-based Centre for WTO Studies indicated that transit route was one of the components of the WTO-mandated MFN status to all the countries, but in case of India and Pakistan both countries were looking towards transit access with fingers crossed. However, it might not be mandatory for both countries and Afghanistan as it was not a member of WTO. Indian business community believes that if transit route is allowed, Indian Punjab will get back its pre-partition glory as not only Indian Punjab would become industrial hub but also it will get higher revenue receipts, promotion of trade and even manufacturing to feed Pakistan, Afghanistan and Central Asian States, which are witnessing a double-digit growth.
Monday, 05 March, 2012
HE euro should not exist. In a perfect world (run by economists) the euro would never have been created. Sadly, however, the world is not perfect — and it is run by politicians. The result is an entirely dysfunctional monetary union. The Spanish economy has youth unemployment approaching 50 per cent. The Greek economy is in its fourth consecutive year of negative GDP growth and will embark on a fifth year of negative growth later in 2012. Euro area countries have to share a common interest rate and a common exchange rate with Germany — where unemployment is at a 20year low and growth is positive if unspectacular around 2.5 per cent. This is an unworkable situation — what Greece needs is very different from what Germany needs. Will the euro break up? We must hope not. The consequences would be devastating. The social unrest we have today is minor compared to what could take place if the euro were to fragment. As the euro was essentially a political creation, it must be political will that keeps it to-
gether — and it would be wrong to underestimate that political will. So what will happen? Because so much rests on political decision making, the path for the euro area is hard to determine. But it seems highly likely that there will be a recession this year. How bad that recession is depends on what happens to the banking sector. Euro area banks are increasingly reluctant to lend money — and with all the risks that they have been through over the last six months, this is hardly a surprise. Slower bank lending growth will hit some economies particularly hard. Fiscal austerity is being urged by Germany. In the wake of France’s downgrade (and with the UK outside the euro and unlikely to ever join) it is Germany’s voice that is loudest in setting the euro policy agenda. When the slowing credit creation is combined with further fiscal austerity, the consequence is likely to be negative GDP growth. Not all countries will be negative, of course, but Italy, France and Spain all seem likely to see a drop in economic activity. So why do the convulsions of the euro area matter to Asia? There are three reasons why Asian companies and investors need to follow the Euro drama.
The euro bloc is the second largest economy in the world. Over a third of APEC’s exports go to the euro bloc, making it the second most important market for Asia after the United States. If the euro area is to have a recession, falling demand, followed by poor growth, slow demand, then Asia needs to adjust its growth model accordingly. Of course, Asian dependence on export-led growth has faded in the wake of the global financial crisis, but there can be no complacency about exports to the Euro area. Euro financial institutions have been involved in the global economy for decades. Global trade, in particular Asian trade, has been financed by euro area banks. As euro banks retrench and the importance of the home market is emphasised, Asia will have to look elsewhere for funding. That is not to say that alternative sources are impossible to find — clearly, they are not. But it means that Asia must change. Similarly, the euro area as a globally integrated market will have an impact on other economies in the world. The euro bloc is over 20 per cent of US exports outside of the NAFTA trade bloc. The US may not be an export-led economy, but there is potentially an im-
pact from a euro area slowdown on US growth, which in turn has implications for Asia. In a globalised world economy with a complex web of trade and financial links, what happens in Athens can clearly have global ramifications. The wealth of the euro area can be discovered in surprising places (Italy, for instance, is a wealthier country than is Germany). Overall, the euro area is wealthy. Thus, the euro area has a role as an investor in the rest of the world. The political pressure on euro area banks and financial institutions to concentrate their investment efforts in their home markets is increasing. Popular hostility to overseas investment by multinational companies has also increased. Investment from the euro area into Asian stock markets, bonds and companies may well slow in the years ahead. The euro area is an economic mess — but it is a mess that the rest of the world must pay attention to. The slow growth that will accompany euro area reform and the changing relationship between the euro area and the rest of the world will be critical to global economics. Now might be a good time to start taking an interest in euro politics.
Pipeline politics and unreliable partners g
It is ironic that it’s the US, of all nations, that is giving us a tutorial on reliability of partners KUNWAR KHULDUNE SHAHID
M
y word, are we showcasing some guts in the IranPakistan pipeline episode! Hina Rabbani Khar’s riposte to Hillary Clinton’s ‘threats’ over the IP project was not only valiant she even made it sound realistic. Last week the US hierarchy – in a class ROFL moment – labeled the IP pipeline as a “bad idea”. And this week they are touting Iran as an “unreliable partner”…the sheer irony is painfully amusing. The US lecturing about the reliability of partners is like Lucas Papademos giving a tutorial on controlling debt crises or Veena Malik giving instructions on wearing hijaabs. So what is your idea of a reliable partner Mrs Clinton? Someone who doesn’t give a rabbit about your energy shortage? One who can’t stop meddling in your internal affairs and wants you to align yourself dutifully to its policies even if it’s bound to be detrimental for your own self? Or someone who kills innocent soldiers and civilians and then
doesn’t bother to do as much as apologise, for courtesy’s sake? Of the intriguing (read comical) verbiage served up by the US Secretary of State one particular statement stood out. “As we are ratcheting up pressure on Iran, it seems somewhat inexplicable that Pakistan would be trying to negotiate a pipeline,” Hillary Clinton said. With Pakistan finding itself in a deep hole as far as the energy predicament is concerned, fulfilling half of its energy needs via gas and running out of channels to quench the need of the aforementioned gas, is it really that ‘inexplicable’ Mrs Clinton that Pakistan would want to negotiate a pipeline with a neighbouring country that it has friendly terms with? Plus, the alternative that you’ve been giving us, the TAPI (Turkmenistan Afghanistan Pakistan India) pipeline has taken a nosedive into oblivion, primarily because a certain country has ensured that the A in TAPI borders on a war-torn fragile zone and definitely no way near the periphery of safety. The US has also been apparently mulling
over throwing in sanctions over the IP project. This looks clearly an act of frustration, especially after other Asian countries – including chums India and South Korea – have paid no heed to the Iranian sanctions. Although the American media is touting the rebuttal on sanctions as merely ‘tough talk’ meant for the respective publics, and that in reality the countries are taking a more conciliatory path. They flaunt the fact that India has ostensibly begun to look for alternative oil from Saudi Arabia and Iraq as the vindication. Either way what is unquestionable is that barring the European Union that would begin its embargo in July, not many are paying much heed to the US threats. And hence, gradually all their policies that are customarily touted by Washington as in the ‘best interest of the world’, are gradually falling within the ‘because I
say so’ jurisdiction. All the noise that the US has been making over the past couple of months, especially with regards to Iran, both on the IP front and globally smacks of the aggravation of that bully who just
can’t stand the fact that he is not being listened to, and that his ‘subordinates’ have the audacity to choose logic and self-interest in lieu of following the guidelines. And when one comes to think of the debate of the reliability of partners; the most important façade is the fact that if you have your own bases covered and give the national interests their due priority and do not compromise on sovereignty, the reliability of partners becomes a moot question. The writer is Sub-Editor, Pakistan Today. He can be reached at khulduneshahid@gmail.com
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Monday, 05 March, 2012
debate
Free trade ad nauseam
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NTDCL boosting up the power infrastructure SHAUKAt ALI
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atioNal transmission and Despatch Company limited (NtDCl), a state owned entity is mandated to transport power from generation units to load centres across the country, thus manages one of the largest transmission networks in the world. one of its main responsibilities is to evacuate electricity generated from hydropower plants located in the north and thermal power plants located mostly in the south of the country and transmit it to various parts of the country. the enormity of the task can be gauged from the fact that presently, 12 grid stations of 500kv having capacity of 14850 MVa and 26 sub-station of 220KV with 15364MVa capacity and 5023 Kms of 500KV line and 7,319 Km of 220 Kv are being maintained and operated by NtDCl. a recent study conducted by Power Planning department of NtDCl projects that electricity demand will surge to nearly 84,000 MW by 2030. to meet the ever growing demand, there is dire need to induct additional power generation units along with requisite grid stations and associated transmission lines to dispatch electricity to variety of consumers. NtDCl has therefore, chalked out an extensive power development program to lay out transmission lines and construct Grid Stations to cater the ever increasing future power distribution needs of the country. this programme is being funded by various international Financial institutions (iFis) including asian Development Bank, aDB, JiCa, World Bank, KfW Germany, Eximbank of Korea and Economic Development Bank of iran as well as from own resources generated by NtDCl. aDB has offered to meet most of the financing needs of NtDC through its Multi-tranche Financing Facility (MFF) for rehabilitation, augmentation and expansion of transmission network in Pakistan. in this connection, a framework financing agreement
has been signed with aDB for $800 million to finance power transmission enhancement investment program in tranches. tranche-1 for $220 Million and tranche-ii for $226 million will be utilised to construct 19 projects of 500 and 220 kv substations and transmission lines. aDB plans to financing 80 per cent of the total project cost whereas the remaining financing will be arranged by NtDCl through its own resources. tranche-ii comprising of nine projects will also be financed by aDB. lying of 500/220 kv transmission systems, expansion and up-gradation of National Power Control Center is being funded separately by JiCa. in compliance with the present democratic government’s commitment of ensuring optimum utilisation of all available resources and create a balance between the demand and supply of power. NtDCl is expeditiously carrying out work on the construction and augmentation of grid stations and associated transmission lines and their early completion. this urgency is necessitated due to increase in power generation through induction of new thermal power plants and up-gradation of the existing ones. Work on following projects is being completed on fast track basis. 1- addition of 4th 220/132 KV 160 MVa transformer at 220 kV Grid Station Sarfaraz Nagar falling under the jurisdiction of lESCo. 2- addition of 4th 220/132 KV 160 MVa transformer at 220 kV Grid Station in Jaranwala, Faisalabad. 3- 132 kV Muzaffarabad - Hattian transmission line length consisting length of 45.3 Km. 4- a 220 kV Dadu-Khuzdar transmission System Project has achieved an average progress of around 76 per cent. this project entails a 220kV D/C transmission line with 274.27 km length from Dadu to Khuzdar, a 220/132kV Grid Station Khuzdar and 220kV Extension at 500kV Dadu Grid Station. 5- Extension of 500 kV Grid Station Dadu New, (1x 450 MVa,
500/220 kV auto transformer Bank and 1x160 MVa, 220/132 kV auto transformers) 6- a 220 KV Rohri Substation and associated transmission lines which will disperse power from iPPs Foundation Daharki and Engro near Ghotki. 220 kV Rohri New Grid Station and Extension at existing 220 kV Grid Station Shikarpur. this project also entails a 62 km 220 KV Double Circuit twin bundle transmission line from 220 KV Rohri New Grid Station to 220 KV Shikarpur Grid Station, is also near to its completion. 7- 220 kV Double Circuit twin Bundle Dera Ghazi Khan – loralai transmission line; this transmission line will be connected from DG Khan grid station to lora lai grid station with total length of 85 km. 8- Ground breaking ceremony of Rahim Yar Khan 500 kV Grid Station and associated 500kV transmission lines Project was done by President of Pakistan in 2010. this project comprises of two packages i.e Design, Supply, installation, testing & commissioning of 500/220/132 kV Grid Station Rahim Yar Khan and in & out arrangement of 500kV Guddu-Multan 3rd Circuit at Rahim Yar Khan Grid Station with length of S/C = 26 Km and D/C = 17 Km. this vital project will be completed at an estimated cost of Rs 6108 million and funded by JiCa. 9- a 220 kV aiS loralai Grid Station comprises Design, Supply, installation, testing & commissioning based on 2x250 MVa, 220/132 kV auto trasformers and 6x132 kV line Bays is being constructed in QESCo area. 10- to facilitate the import of 100 MW Power from iran to Gawadar, a grid of 220/132 kv is being setup at Gawadar and 75 km transmission line to iran border. the total cost of the project is Euro 30 million, out of which 70 per cent funding is being provided by iran and the rest of the fund is being provided by NtDCl. 11- another major project being
undertaken by NtDCl is construction of 500 kV D.G. Khan Substation & associated transmission line Project. it encompasses two packages; in Package-i Design, Supply, installation testing and commissioning of this 500/220/132 kV aiS Substation at Dera Ghazi Khan and packageii entails construction of 33 km 500 kV Guddu-Multan Circuit-i in & out transmission line at Dera Ghazi Khan. 12- a project is also under execution to connect the power generated from wind to national grid. 132 kV Double Circuit transmission line in and out 132 kV Nooriabad-Jhampir transmission line will connect FCC & Zorlu Wind power project. total length of 132kV transmission line up to FCC Wind Power is around 5.820 Km and 132kV t/line to be added from FFC Wind Power to Zorlu Wind Power which is 1.205 Km approximately. after the completion of these projects, which is expected soon, there will be marked improvement in the voltage profile and supply reliability of the national grid. this would help reduce line losses in lESCo, FESCo, aJK, QESCo, SEPCo, HESCo and MEPCo networks and ensure availability of additional quantum of electricity to domestic, commercial and particularly agricultural consumers of Punjab, Balochistan and Sindh. NtDCl engineers and staff are working with complete dedication to improve connectivity and early completion of these projects of strategic National importance. their services are even more laudable given the terrain and security hazards along with extreme weather conditions (scorching heat of Sibbi and Jacobabad) that they have to negotiate continuously in turbulent, farflung and hard areas. The writer is Assistant Manager PR at NTDCL
JAgDISH BHAgWAtI
O much has been written, by so many, against the muddled ideas that have now overwhelmed good sense on trade policy in the United States government that one wonders whether there is anything left to say. yet it is worth recalling what PierreJoseph Proudhon reportedly told the Russian intellectual Alexander Herzen: “And do you imagine that once a thing has been said, it is enough?....It has to be dinned into people, it has to be repeated over and over again.” What we need now is a primer on the major misconceptions in the hope that, unlike Gresham’s Law, which says that bad money drives out good money, good economics will drive out bad economics. Four, in particular need to be corrected. The first misconception is that exports create jobs, while imports do not – a fallacy that the great trade economist Harry Johnson traced to mercantilism, and which the US has resurrected. In fact, in a world where parts and components come from everywhere, interference with imports imperils competitiveness. The success of parcel-delivery companies, for example, depends on imports, which must be brought from the borders inland, as well as on exports. Second, the credo “Trade, not aid” has given way to the mistaken belief that trade matters less than foreign assistance. The labor constituency, ever fearful of import competition, has undermined trade policy. It has also shifted aid policy in directions that assign priority to areas where the returns to US efforts are relatively minuscule. Thus, the US State Department has ceased being an advocate of multilateral trade liberalization, despite decades of massive gains from the removal of trade barriers. Instead, its aid arm, the US Agency for International Development, has now retreated into low-yield programs conceived as randomized experiments. That technique impresses Bill Gates, and the new USAID administrator, Rajiv Shah, has experience with it. But, even if all such programs succeeded, their benefits would not add up to a fraction of the documented gains that have accrued from trade and other macro-level policies in which the US has lost interest. Third, many believe that manufactures deserve preferential support. This is practically the mantra of US President Barack Obama’s administration, and it has cost him the support not only of much of the economics profession, but also of Christina Romer, who chaired his Council of Economic Advisers. In a recent newspaper commentary, she refuted virtually all of the arguments advanced by manufacturing lobbyists for special treatment. Add to the critiques that of Nobel laureate Robert Solow, a staunch supporter of Obama’s Democratic Party. He agrees that there are activities that yield higher social returns than private returns. The problem, he notes, is that neither he nor anyone else can possibly know which ones they are, whereas the lobbyists claim that they know this precisely. Proponents of a “manufacturing first” policy argue that “clusters” of businesses are more productive than individual businesses are. But big clustering effects are hard to find. The economists Glenn Ellison and Edward Glaeser have found that clustering is only marginally greater than if businesses are allocated randomly. Besides, it is hard not to accept that, in the economist Frances Cairncross’s famous words, we are increasingly seeing the “death of distance.” Finally, the financial sector has come to be viewed as the bane of morality. In a world of financial fraud and insider trading, it is easy enough to believe this, and to accept that the financial sector must be taxed. But morality cuts across sectors. There are plenty of honest people in all walks of life, and crooks as well. The quasi-Marxist view that our morality stems from our economic position overlooks the moralizing role of family, religion, culture, and art. Given these misconceptions, protectionism has re-emerged as a formidable foe. In 1999, when the ministerial meeting of the World Trade Organization erupted into bomb threats and mayhem, I asked then-Director-General Mike Moore whether we ought not to be prepared to die for the great cause of free trade. I should have said: we ought at least to be prepared to live for it. Between old and new muddle, and the certain prospect that the demolition of each bad idea merely allows others to take root and grow in its place, the task of the free trader is never finished. A version of this article was first published in Project Syndicate
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Monday, 05 March, 2012
EDITORIAL
Liberalisation pitfalls
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RANTED, the local press is right in appreciating the pace of progress of PakIndia trade liberalisation set in motion by the FahimSharma summit some months back. Nor can there be any denying that the present regime of redressing trade barriers is unprecedented, and ultimately complete liberalisation is in the best interests of both countries, as well as greater South Asia. yet it is prudent to be mindful of pitfalls such processes invariably entail. So far, the government has been rightly cautious, revising its negative list after giving another ear to some industries that stand to lose comparative advantage in case of opening up too soon. Pros and cons cannot only be weighed technically, with market forces dictating eventual readjustment. Shifting posture too soon in a stagnant economy is rife with complications
– imports from the neighbour increasing just when traditional production advantage is compromised, for example. Rather than mark year-end for phasing out the negative list, both Islamabad and New Delhi must reconsider gains against the original project scope. Much has been accomplished. Both governments have been able to restrain rightist tendencies and convince trade lobbies of the urgency of forward march. Interestingly, this movement has rubbished the previous mutual position of settling political disputes before engaging more purposefully in commerce. Now, the technical more-trade transition needs very fine management. Both sides must ensure their trump cards are not caught off guard, and some will require more time than the remainder of the year to prepare for stiffer competition. Should haste prevail, no matter how well intentioned, neither economy can currently withstand production and earning
IP Pipeline
Bull surge
This is with regards to the quick edit titled “The pipeline policy” published on Saturday. I think it is a positive stance from our government that we are ignoring all these so called threats from Washington. And now that we have made our stance pretty clear, my humble request to the Government Of Pakistan would be to stop giving statements on Pak-Iran pipeline and complete the project on Fast Track basis as this is the most economical and viable project . This would rest the debate for good.
This is with regards to the news report ‘Pakistan equities return to top five regional stock list’ published on Saturday. The recent trend of bull surge has been a positive sight and now that we have returned to the top five regional stock list, we must look to cement our place over there. February was a lucrative month for Pakistan, and if we steer clear of political turmoil the coming months should also follow suit. The fact that we are only behind China, India and Indonesia in the region is also a promising stat.
RIZWAN
ALI WAHID
LAHoRe
KARACHI
When sovereigns are bankrupt
R
Javed Gilani
ECENT events in Europe have been extremely instructive. Greece accounts for a very small proportion of the main European economy. It comprises but a couple of percentage points of continental GDP. yet its debt debacle has had the entire continent strung in an awkward position for a good two years now. Germany and France, the two biggest EU economies, have thrown in all but the kitchen sink to keep the debt ridden country from defaulting. What is more, the bailout package just agreed has all but turned the bond market on its head. Ironically, the ECB is saved from the painful haircut all other ‘old’ bondholders have been made to take. Why such desperation? Why must Greece be kept from defaulting, which is what ordinarily happens when a country is unable to meet debt obligations? The reasoning is pretty simple. The minute Greece defaults, exits the EU and abandons the single currency, an untold number of big international financial organisations will immediately go belly up, their position compromised by overwhelming exposure to Greece and other, bigger economies, sometimes in much worse position. And when big money collapses, the financial and political elites on both sides of the Atlantic will be ruined, even though Greece will revert to the drachma, devalue considerably and export and grow out of the subsequent depression. While this partially explains the rush to rescue Greece, it does not nearly save the European project. Portugal, Spain, Italy and even France are hemorrhaging, and not very far from needing substantial help in doses, which will inevitably tilt towards the bailout precedent that
Pakistan must learn from examples of governments that run high deficits
the Greece example has set. Counting on Germany to keep filling budget deficits of other, less resilient economies would, of course, border on insanity. Interestingly, financial markets initially greeted the deal with optimism. The euro advanced, crude oil rallied and, coupled with signs of growth returning to the American economy, the European package introduced much welcome risk appetite in global currency and commodity markets. However, it was only a matter of quick time before long term concerns returned to pundits. When that happened, the euro collapsed, reintroducing long-term shorts. The message for other economies, especially Asia’s emerging markets, is obvious. In the post recession era, when capital market solvency is in serious question, sovereign debt is a very serious issue. Once capitals start running serious deficits, financial institutions with the slightest exposure are put at serious risk. And when that happens, the life and blood that oils the international globalised market – credit – dries up, compromising whatever efforts are made to return to growth. For an economy like Pakistan the message is even more serious. Unlike regional economies, our state of stagnancy is acute. Growth is nowhere on the horizon, there is still no value addition in exports, and the rupee is in freefall. While February’s impressive stock market performance deserves credit, it does not reflect critical structural deficiencies in the macro economy that cannot be sustained without serious overhaul of policy. Our deficits are in serious red. With substantial components of international aid also petering out, there will be yet more unforeseen upward revision of the current account deficit, while the development budget, year-end revenue and final GDP are all revised downward. We must immediately introduce policies that check unnecessary leakages and stimulate growth. At present, both fiscal and monetary policies are counter productive, while relevant authorities doing little of intrinsic value. The election is near. Learning from examples of countries destroyed by debt will not only heal the state of the economy, but also facilitate the government’s long term survival in Islamabad. The writer is Chief Manager, SME Bank, with more than 30 years’ experience in the banking industry.
Lawn-ing with the most favoured neighbour
O
Maheen Syed
H, what a beautiful morning! I turn onto the main road only to stare at the enormously gigantic billboards and flex banners featuring pretty girls from Bollywood. In the Pakistani context, it would not be presumptuous to state that celebrity endorsements by Bollywood actresses can and in fact, have successfully managed to aggrandise the brands involved. Passing by the roads of Lahore these days, I am forced to contemplate and have second thoughts
about my location status. Whether I am really in Lahore or not: that is the question. It appears as if I am watching a Bollywood movie or taking a walk through the streets of Delhi, where every other pole is lined up with a banner of a visibly beautiful Indian actress wearing a - not so visibly in focus, lawn print (I still am in serious doubts whether the celebrity is endorsing the product or the product is endorsing the celebrity). Pakistan, just like India, is one country which has always idolised stars of the celluloid world. Therefore, it makes tremendous sense for a brand in Pakistan to procure a celebrity for its endorsement. But despite the obvious economic advantage of using relatively unknown celebrities or Lollywood actresses for that matter, as endorsers of the advertising campaigns; the choice of Bollywood actresses to fulfill that role has become common practice for lawn brands competing in the lawn-race. The objective for a celebrity endorsement of this sort is clearly
to garner faster brand recognition in an attempt to win the customer preference and sell the product. And Bollywood actresses have no doubt helped the lawn brands to stand out from the surrounding clutter of ever-increasing lawn brands, improving their communicative ability and brand recall. Just like I remember that Firdous became the pioneer and talk of the town by endorsing ‘Kareena Kapoor’ for their lawn prints; I can also recall my male friends’ enthusiasm on waking up one fine day to see their epitome of Bollywood beauty endorsing a product of their least concern. I am not sure about the target audience of these lawn prints, but the males did and still continue to get a good eye candy of these celebrities coming straight from the neighbouring country. On the flip side, recently there has been a massive uproar among the leading industrialists, including people from the textile industry, regarding the Most Favoured Nation (MFN) status to India, trade liberalisation and phasing out of the negative trade
SHAHAB JAFRY Business Editor
KUNWAR KHULDUNE SHAHID Sub-Editor
BABUR SAGHIR Creative Head
ALI RIZVI News Editor
MAHEEN SYED Sub-Editor
HAMMAD RAZA Layout Designer
I can recall my male friends’ enthusiasm on waking up one fine day to see a Bollywood beauty endorsing lawn prints of their least concern
list with India in order to secure the domestic industry. Seems like cognitive dissonance is playing its cards quite perfectly because there is a strong lack of agreement between the beliefs held by the group and their actions. The irony of the situation is that even when the textile industry is taking a heavy toll on the situation, it is choosing the favoured nation for endorsing and selling the textile products. Marketers claim that advertising simply mirrors the attitudes and values of the surrounding culture. Hence, you only make a celebrity endorse your product because you ‘believe’ that the ‘particular’ celebrity is the most favoured and popular among the target audience of your product. Therefore, the reality of the
situation is that the industry somewhere in the corner of its mind also upholds this belief and regards the nation to be favourable while on the other hand opposes the decision of the government. Also, remember that ‘people make a nation’. I am certainly not favouring any side and neither giving my stance on the MFN status to India, however, the point that I am trying to make here is that if we are using our favoured nation’s people to sell our products then we should accept the recognition of their granted status as well. Let’s just open our eyes and step out of our shells of doublestandards to embrace this reality, which is otherwise dirt-under-the-carpet. The writer is Sub-Editor, Profit. She can be reached at
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