Stuck in worries

The Joint J&K Chamber of Commerce has been more paralysed than the cross-LoC trade it was supposed to run. Unsupportive India and Pakistan Governments had added to the limitations of the trade. Kashmir Life special correspondent reports.

Traders feel trans-LoC trade has been an important breakthrough on the Kashmir front in all these decades.
Traders feel trans-LoC trade has been an important breakthrough on the Kashmir front in all these decades.

Zulfiqar Abbassi shot to fame when he led a trade delegation to Srinagar in October 2008, almost a fortnight before the trucks started moving on the Jhelum Valley Road (JVR). He came as president of the Azad J&K Chamber of Commerce and returned as president of the Joint J&K Chamber of Commerce, an initiative his hosts took in Srinagar which was later supported and upheld by Jammu Chamber of Commerce. Since then, he requires no introduction in Kashmir.

These days, Abbassi is a busy and worried man. In his term the situation on the trans-LoC trade front remained vague and fluid so everything remained unchanged. No initiative was possible and the ‘joint chamber’ did not move beyond a few statements, courtesy calls and attending a conference on Kashmir. In a close-door meeting at Colombo recently he said he will do his best to make the joint chamber a vibrant institution in the limitations that the prevailing situation imposes.

Trans-LoC trade, he says has been an important breakthrough on the Kashmir front in all these decades. “But it continues to be symbolic as the two governments have neither taken the traders into confidence about what they intend to do nor is it facilitating the trade and helping solve problems we are facing,” he said. The decision has generated a lot of activity but the limitations are creating problems. “Every time the list is out about whose truck is going (to crossover) there is a protest,” he said. Now the government is using various methods including taxing to prevent the rush of people who want to be traders on the two LoC roads. “We all must realize that the quantum of opportunity right now is small,” he asserted.

It is here he intends to intervene. But the task comes at a time when his presidency is on extension. “I have completed my term,” Abbasi said, adding “I am waiting for the Srinagar trade to settle their problems and nominate the replacement. They had sought some time to respond and I am waiting.” He says the differences in the trade and industry in Kashmir have left him no option but to continue after his term was over in October last.

A well-read articulate Abbasi is one of the leading business magnates of PaK. He runs a (Pakistani) Rs 2600 crore business group that has two small hydropower projects of 10-MWs and 84-MWs besides a steel fabrication mill at Mirpur.

But personal business and state’s trade are not the only things that worry him. For a long time he feels the economic development and policy making does fall in the priority areas of the successive regimes in Muzaffarabad.

Comprising of two provinces – Mirpur and Muzaffarabad, PaK has a total population of 3.2 million (32 lakh) and of them 11 lakh live in Bradford (UK) for many decades now. “Of the 22 lakh population, 110 thousand people are the employees of the PaK government and another 50-70,000 serve the defence forces,” estimates Abbassi. This makes Muzaffarabad government perhaps the costliest establishments in the region. J&K has over 11 million population and less than half a million are serving the state government.

PaK has set up its own bank only in 2005 that has now over 30 branches. Its deposits were of the order of Rs 230.88 crores at the end of the 2009 with a net profit of Rs 13.70 crore. The bank plans expansion abroad once it gets a scheduled status. This bank has a huge potential to grow given the remittances that come from abroad.

Remittances from 11 lakh people living in UK and other places make over one-fourth of the foreign exchange that Islamabad earns and it lands in banks across Pakistan. As the earners are abroad and the remittances go to the aged lot living back home, there is no expenditure. “Right now as many as 1.5 trillion rupees worth deposits (means Rs 150000 crore) are with the banks in Pakistan,” Abbasi said. Part of this money could change the course of PaK and lead to setting up of scores of institutions that can earn and bring change at the same time.

Having 12000 kms of metalled roads, and 67 percent literacy, PaK has around 500 registered industrial units, but it does not produce much and is not known for any manufacture. “We face the same problem that you face in Kashmir – being far away from the raw material and the market,” Abbasi said.

In fact part of the massive public infrastructure that was built in the mountainous region over the decades was destroyed by the October 2005 earthquake besides killing thousands of people. At the same time, however, it triggered good investment as well. “Apart from $6 bn that was pledged by countries, we must have got over Rs 5000 crores for rebuilding that is still taking place,” believes Abbassi. “We now have some of the best hospitals and the universities in the region.”

Being a small economy means its resource base is narrow. “For a Rs 3500 crore budget the local resource contribution by way of taxes, services and earnings from commercial sources may not be more than Rs 600 crore and most of the money comes from Islamabad,” he said. In Pakistan the financial year is July to June and the current fiscal 2009-10 is about to close. Given the security situation that emerged in Pakistan, diversion of money to the security head slashed all budgets by 45 percent. “We are about to close the third quarter and I presume Muzaffarabad government might not received one-third of its budget,” he added.

Abbasi sees the water resources being the only way out for bringing about change in the socio-economic profile of the region. “Our water resources are getting used but the royalty is not being paid,” he said. Instead of other provinces where power utilities offer 30 percent of their profits to the states, we end up getting Rs 0.15 per unit as water usage charge. “If enhanced payments and royalties go to the public kitty in Muzaffarabad, our resource base will be more honourable,” he believes.

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