Day: June 5, 2024

By Alexandra Brzozowski

(EurActiv) — A dozen EU member states have made a joint push to move forward the accession process for candidates Ukraine and Moldova and formally kickstart membership talks by the end of June, according to a letter to the Belgian EU presidency, seen by Euractiv.

“We jointly call for the adoption of the negotiating frameworks for Ukraine and Moldova by the General Affairs Council in June at the latest, in order to convene Intergovernmental Conferences with both countries by the end of June 2024,” the ministers wrote in their letter, dated 5 June, to their Belgian counterpart Hadja Lahbib.

Belgium, which holds the EU’s rotating presidency until the end of June, has in recent weeks been pushing to reach a decision on the issue. An intergovernmental conference with a candidate country marks the formal start of accession talks, a process that usually takes years.

“In light of the results achieved and the ongoing reform efforts in both Ukraine and Moldova, which the Commission has previously reported on, we believe that now is the time to move forward,” the ministers wrote.

The letter was signed by the ministers from Czechia, Sweden, Estonia, Finland, Portugal, Latvia, Poland, Lithuania, Germany, Slovenia, Romania, and Slovakia.

The joint push from the twelve EU member states comes after their ambassadors last week;voiced hope they would be able to agree;on the negotiation frameworks for Ukraine and Moldova in the first week of June, despite some remaining objections from Hungary.

While some EU countries would still require parliamentary approval, almost all 27 member states were in favour of holding the first intergovernmental Conferences (IGC),;according to people familiar with the talks.

However, Budapest continues to block Ukraine, but not Moldova, and has requested additional changes to the draft agreement due to 11 bilateral issues;regarding national minority rights, trade, anticorruption, agriculture, internal market, and good neighbourly relations.

“Reflecting the outcomes of the debate (…) of 29 May, we fully support your efforts and are pleased to see the progress being made,” the ministers said.

“By agreeing to these negotiating frameworks and convening Intergovernmental Conferences, we will de facto and de jure open the accession negotiations with both countries,” they added.

EU envoys are expected to revisit the matter on Friday (7 June), with the possibility of making a political decision.

The European Commission is expected to give EU ambassadors an oral update on both countries’ progress on accession reforms. EU officials say both are expected to receive a positive assessment.

“Opening the accession negotiations would bring additional motivation to both Ukraine and Moldova,” the ministers wrote in their joint letter

“Given the dire situation on the ground in Ukraine and the upcoming presidential elections and EU referendum in Moldova, this would boost morale and further the work on reforms in these countries,” they added.

They also urged that in order “to continue the credible enlargement process, the EU should provide tangible benefits for the populations of the respective countries”.

“This can be achieved by the gradual integration of Ukraine and Moldova into the European Union, through phasing into individual EU policies and programmes before full membership in the EU,” they stressed.

By Victor Mambor

Indonesia is going ahead with a project to convert millions of acres in Papua into a gigantic sugarcane plantation so the restive region can become self-sufficient in sugar and its related liquid fuel, bioethanol.

But indigenous communities and environmentalists worry that the project in South Papua’s Merauke regency will lead to land grabs, ecological damage, and the destruction of traditional livelihoods.

They have been scarred by previous failed ventures in this sprawling regency, notably the Merauke Integrated Food and Energy Estate (MIFEE), which they say cheated them on payments, broke promises, and disregarded local perspectives.

Investment Minister Bahlil Lahadalia has been touting the importance of involving local communities in investment plans, even as he has acknowledged the failures of previous projects in Papua.

He insisted this time would be different.

“This program in Merauke has failed several times, right? There was MIFEE,” Bahlil told journalists during a visit to the project site last month.

“I don’t want this one to suffer the same fate.”

He said one reason similar projects had failed before was the seeds used.;

“We have learned from the mistakes of the past,” he said.

“This time, we are addressing potential issues like seedling quality from the outset.”

Faced with Indonesia’s rising consumption of sugar and its consequent increase in imports, President Joko “Jokowi” Widodo announced a plan in 2020 for the country to become self-sufficient in the commodity in a decade.;

A key to achieving this and avoiding the pitfalls of previous attempts, he said then, was to expand cane area under state-run sugar mills beyond the traditional Java heartland to other regions and islands, the International Sugar Association said on its website.

During his election campaign three years later, Defense Minister Prabowo Subianto – now the president-elect – promised to reduce Indonesia’s reliance on coal, the dirtiest fossil fuel. The key to achieving that goal, he had said, was to replace it with biofuels – fuel made from animal or plant waste, such as bioethanol.

Prabowo has stated time and again that he plans to continue Jokowi’s policies. The president tacitly supported Prabowo, and Prabowo’s running mate was Jokowi’s eldest son. But;analysts have said;the president-elect will also want to be seen as his own man with some unique policies of his own.

The new Merauke project, which will integrate the sugarcane, sugar, bioethanol and biomass power generation industries in Merauke regency, is taking off ahead of Prabowo’s induction into office and Jokowi’s exit in October.

To accelerate its implementation, Jokowi in April signed a presidential decree to form a task force assigned with enabling investments from those various industries.

Such a group’s formation was part of a requirement set out in a presidential decree signed in December 2023 on the “Acceleration of National Sugar Self-Sufficiency and the Provision of Bioethanol as Biofuel.”;

Bahlil heads the task force.

Under the task force’s plan, the integrated sugar-bioethanol-biomass power generation “clusters” will be spread across some two million hectares (4,942,107 acres) in Merauke regency.

The project is divided into four clusters, with the third one, covering an area of ​​about 504,373 hectares, set apart for the private sector. The task force hopes this cluster attracts a total investment of U.S. $5.62 billion, according to a Ministry of Investment statement issued on May 2.

Bahlil said this would be a large outlay so investors must have real credibility and must fulfill the customary rights of people in the area, the statement added.

“The factory will operate on a large scale, and in the future, this investment will actively engage local communities. We won’t allow investors to thrive while the community suffers. Absolutely not!” he said.

“Our vision is fairness. We want investors, the country, the region, and the people to all benefit together. It’s about growing together.”

But for many Papuans, these promises ring hollow. The region, rich in natural resources but plagued by poverty and a simmering armed separatist movement, has long been wary of Jakarta’s development schemes.

Papua has grappled with underdevelopment for decades. The region in Indonesia’s far east faces challenges related to infrastructure, education, healthcare, and economic opportunities. Indigenous communities have historically borne the brunt of these disparities.

The Indonesian government said it aimed to prioritize a welfare-focused approach in its efforts to spur development in Papua.

Suharso Monoarfa, chief of the National Development Planning Agency (Bappenas), said development projects should directly benefit Papuans.

“Earlier, we discussed plans to accelerate development in Papua. We will implement a welfare approach there,” the state-run Antara news agency quoted him as saying in May.

Indigenous clans get ‘token’ payment

Locals cite the example of the earlier MIFEE project that started in 2010 and which the government had said would revolutionize Indonesia’s food security. But all it did was leave a legacy of environmental damage and unfulfilled potential.

The administration of then-President Susilo Bambang Yudhoyono government had envisioned that if the MIFEE project succeeded, Indonesia would by 2030 have additional food reserves of 1.95 million tons of rice, 2.02 million tons of corn, 167,000 tons of soybeans, 64,000 head of cattle, 2.5 million tons of sugar, and 937,000 tons of palm oil per year.

The project had been expected to boost Papua’s per-capita gross domestic product to 124.2 million rupiah per year ($7,616) by 2030 and save the country 4.7 trillion rupiah ($288.2 million) in foreign exchange through reduced food imports.

Even worse, critics say, was the project’s disregard for the cultural rights and customary land ownership of indigenous communities. Customary land belongs collectively to;clans.;

Petrus Kaize, a representative of one of the seven clans that claims customary ownership of the land, said there had not been a formal deal with the company developing the properties for the MIFEE project.;

“There has never been a written agreement regarding this land issue,” Kaize told BenarNews.

In 2012, the contractor in charge of the MIFEE project gave the clans a “token” payment of 2 billion rupiah (roughly U.S. $133,000), but no formal contract was signed, Kaize said.;

Back then, the two sides had also disagreed on the length of the lease for the MIFEE project, with the government pushing for 35 years and the clans wanting 25.

‘Fish drunk on pollution’

Environmentally, greenhouse gas emissions spiked as large swaths of forest land were converted to plantations.;

In Zanegi, a village in Merauke, locals told a U.K. NGO in 2013 that malnutrition problems began after a company, which had arrived to run an industrial tree plantation, began operations.

“We would eat sago and walk the forest all day without being weary. Now, the sago dies and the earth is dry,” said Yosefa, a Malind woman, who was 31 years old back then, told the Forest Peoples Program.

“The rivers are dark and oily, and the fish drunk on pollution. Our children are dying because our sacred mother land has been ripped away from us,” she was quoted as saying in a July 2013 submission made by 27 Indonesian and international groups to the U.N. Committee for the Elimination of Racial Discrimination.;

Many are similarly suspicious of what they see as the opacity of the sugar-bioethanol project on the same land.

Franky Samperante, director of the Bentala People’s Heritage Foundation, a local NGO, said he had not seen the official design of the project that would cover nearly half of Merauke.

“This [design] document should have existed before the project was implemented,” he told BenarNews.

It was also important to have shown this to communities that would be affected, consult with them and get their approval, Franky said.

Maikel Primus Peuki, director of the environmental advocacy group Walhi in Papua, said the government’s development policy revealed a lack of respect for indigenous communities in Merauke.

“This is a top-down policy,” Maikel told BenarNews, calling the government approach “brutal.”;

“It proceeds without the consent of indigenous people, who are the rightful owners of ancestral land and forests,” he told BenarNews.;

For young people in Merauke regency, the potential environmental damage from the project is a big concern.

MIFEE’s ambitious plans, for instance, led to widespread deforestation, devastating fires, and significant greenhouse gas emissions, contradicting its stated goal of sustainability, environmental groups said.

Recent floods in the area were caused by deforestation from palm oil plantations, and the sugarcane plantation would only worsen the problem, said Kasimirus Chambu, head of the Merauke Student Association in Jayapura.

“Investments entering South Papua have many bad impacts on indigenous peoples,” Chambu said, calling for the project to be scrapped.;

“I firmly reject the sugarcane company in Merauke regency.”

Last weekend, the;Washington Post;ran an;editorial;that bothered me more than most Washington Post editorials. The headline said it all, “Telling Americans the economy is good won’t work.”

I knew I had heard this before but couldn’t remember where. Then it hit me, the Social Security debate of the 1990s.

The 1990s were the heyday of the Social Security “crisis.” The problem wasn’t that Social Security actually was in crisis. The problem was that all the pundits, very much including the news and editorial pages of the;Washington Post, insisted that Social Security was in crisis.

This view was deeply entrenched in elite opinion. (Who can forget this;classic?) ;It was endlessly repeated in wise columns by leading intellectuals and backed up with vaguely scary data, like the ratio of retirees to workers is rising (sort of like it always has).

The crisis story became so deeply entrenched that even progressive politicians, who knew it was tripe, felt they had to repeat it, otherwise they wouldn’t look serious. I recall having a Democratic pollster tell me that people just get angry if you don’t “acknowledge” that Social Security is in a crisis.

Being old-fashioned, I decided to stick with the facts rather than what the pollsters were telling me. My friend Mark Weisbrot and I wrote a ;book,;Social Security: The Phony Crisis.

Anyhow, these memories all came back to me when I saw the Washington Post loudly asserting that we can’t tell people the economy is good. Well, I have been telling people the economy is good, based on the data, and I intend to continue to do so, despite the marching orders from the;Washington Post.

The Good Economy Story

In making the case for the economy being good, my benchmark is 2019, before the pandemic, when most people said the economy was good. To be clear, even in 2019 tens of millions of people were struggling. The poverty rate was 10.5 percent, and if we go to double the poverty line, still a very low income, we’re talking about more than a quarter of the population.

So, saying 2019 was a good economy hardly means everyone was doing great, and it’s the same story today. We need to take steps to improve our system of social supports so that everyone can have decent housing, access to healthcare, and food. The Biden administration has made some steps in this direction, but we need to go much further.

But again, I’m using the 2019 benchmark. If 2019 was a good economy, then can we also say the economy is good today?

I will strongly argue that case, starting with what I have always considered the single most important statistic about the economy, the unemployment rate. The story of the unemployment rate is incredibly good. We have had 27 consecutive months of below 4.0 percent unemployment. That streak matches the run in the 1960s boom and exceeds any stretch in the last half century.

Unemployment is a really huge deal for the simple reason that in an economy where most people get the bulk of their income from working, not being able to get a job means you’re really screwed. But that is only the beginning of the story.

When the unemployment rate is low workers have more bargaining power. This means that workers can push for higher wages. They can tell their boss that they need a pay hike or they will go somewhere else. This is especially important for workers at the bottom end of the pay ladder and for people who are victims of discrimination in the labor market.

And we have seen this story play out in this recovery. Workers in the bottom decile of the pay distribution have seen the sharpest;real wage gains;in half a century. Overall Black and Black teen unemployment hit record lows, as did Hispanic unemployment. The Black/white wage gap is the;lowest;on record.

When we have a tight labor market workers quit bad jobs and find better ones. If a job has few opportunities for advancement, or the boss is a jerk, workers can go elsewhere. And they did in a big way in this recovery. As a result, their measure of job satisfaction is the;highest;on record.

This should all be a very big deal, but the pundits don’t want us to talk about low unemployment. It gets just passing mention in one sentence in the;Post;editorial.

The Inflation Horror Story

The Post editorial is about the inflation horror story, and that is bad news. Although even here, the pundits have to do some little twists to make their case. The problem is that the pandemic inflation has come down sharply in the last year. In fact, if we pull out one item, owners’ equivalent rent, the inflation rate was just;2.0 percent;over the last year.

Am I playing games by pulling out a very important item? Well, owners’ equivalent rent is the rent that a homeowner would be paying to themselves, if they rented their own home. In other words, it is a payment that literally no one is making. I think it is fair to say that if this is what is driving the inflation story, there is not much of an inflation story.

But the pundits actually don’t want us to focus on current inflation. The problem, according to them, is that prices jumped during the pandemic and have not come back down.

There are two points to be made here. First, prices rose in the pandemic because of the pandemic. There was inflation everywhere in the world because of the pandemic. (Russia’s invasion of Ukraine also was a factor.)

We all get that people don’t care about inflation in Germany and France, they care about inflation here. But pandemic inflation is a reality, sort of like when a hurricane destroys much of the housing in an area you get a housing shortage. People may not care about the hurricane, they care about their housing, but that is the reality, as is the case with the pandemic and inflation.

Furthermore, for some reason people could understand pandemic unemployment and not blame Donald Trump. Have they gotten that much stupider in four years?

But the other reason the prices-going-back-down story is silly is that nominal wages have gone up by almost 22 percent since the start of the pandemic. We aren’t going to see pre-pandemic prices with post-pandemic wages, as all the pundits surely know.

To be clear, there has been some padding of profit margins since the pandemic, and we can reasonably hope that this will be reversed. But we’re talking about price declines here of 1.0-3.0 percent on average, not a story where prices fall back to their pre-pandemic levels.

Interestingly, no one expected prices to fall back to their pre-inflation surge levels in the 1980s. Everyone was satisfied that inflation had fallen back to a manageable pace of around 3.0-4.0 percent. However, this time around the pundits have chosen to place an obviously unrealistic complaint front and center in the policy debate.

We Are Not Telling Anyone;They;Should Feel Good About Their Own Situation

There is a final point here that is very important. No one is telling anyone that they personally are wrong about their own economic situation and that this is actually good, even though they think it is bad. The polls tell us that most people actually feel;pretty;good;about their own economic situation. The problem is that people think their own situation is an exception and that everyone else is doing poorly.

So, in telling people that the economy is good, we are not saying that their perception of their own situation is wrong, we’re telling them that their perception of other people’s situation is mistaken. Now where would people get the idea that everyone else is doing horribly when they are doing good?

Anyhow, this is the place where the pundits don’t want us to go. Just like we couldn’t tell people that Social Security is not in a crisis, they don’t want us to tell them the economy is actually pretty good by most measures.

Everyone can make their own choices here, but I’m going to make the same choice I did a quarter century ago. I’m going to follow what the data say and not listen to what the pundits tell me. It’s a great economy!

• This first article appeared on Dean Baker’s Beat the Press blog.

Eadaily.com, a Russian pro-Kremlin media outlet, in an article by Alan Pukhayev entitled ‘In Kazakhstan, they want to abandon the shared history of Kazakhstan and Russia’ said: “Agents of foreign influence in the Kazakh government are conscientiously fulfilling their task of creating a historical and mental separation from Russia. The latest thing that the Kazakh authorities have done is the renaming of Yuri Gagarin Avenue in Almaty into Yermek Serkebayev Avenue. [In this regard,] I would like to recall a statement made by President Tokayev at the Central Asia-Russia summit in October 2022. “Our countries are destined to be together. We must protect our shared history and create a unified future for the well-being of our people. Stability and security in each of our countries have a direct influence on the development of the region”, he said.; ;

However, it seems that the ‘Harvard boys’ in the Kazakh government do not agree with him. For them, what the US Ambassador to Kazakhstan, Daniel Rosenblum, says is much more important”. 

Those reproaches by the Russian pro-Kremlin media outlet seem to be leveled at Yerbolat Dosayev, Mayor of Almaty, a city, where that avenue is. Experience shows that this kind of verbal attack by the Russian media on high-ranking Kazakh officials does not remain without consequences. Here are some examples.

On January 11, 2022, President Tokayev appointed Askar Umarov as Minister of Information and Social Development of Kazakhstan. The Tsargrad TV reacted to this with a series of materials describing the latter as an ‘open Russophobe’. This Russian media outlet also called President Tokayev’s decision to appoint him minister ‘an outrageous gesture’. Other Russian media picked up its initiative. They were joined by some of Moscow’s officials and Russian politicians. There was a lot of noise. Some Russian politicians, experts, and journalists went so far as to describe Kazakhstan’s Minister of Information, Askar Umarov, as ‘a person with nazi and chauvinist views towards Russians’. He once, according to Russian media said, while addressing Kazakhstani Russians, the following: “You do not forget that you are an imposed diaspora here, not autochthons, and be thankful that your rights are respected, and no one is driving you away from here, as it is the case with colonizers in some other countries”. Yevgeny Primakov, who heads the Russian Foreign Ministry’s international cooperation agency Rossotrudnichestvo, reacted to the appointment of Askar Umarov as Minister in the following way: Rossotrudnichestvo ‘won’t cooperate with Russophobic trash’. He added: “Rossotrudnichestvo does not maintain contact, work or co-operate with Russophobic garbage, so that rules out any co-operation on our part with this Minister and the Ministry he leads”. Dmitry Rogozin, the then Roskosmos (space agency) director, advised Askar Umarov on Twitter not to visit the Baikonur cosmodrome. “Minister Askar Umarov is not welcome at the Baikonur Cosmodrome”, he wrote.

The result was not long in coming. Askar Umarov was relieved of his office on September 2, 2022. He held his position as Information Minister just for seven-plus months.

On September 2, 2022, Darkhan Kydyrali was appointed Minister of Information and Social Development of Kazakhstan. The Tsargrad TV reacted to this news very restrained: “A certain Darkhan Kydyrali has been appointed Minister [of Information] in his [Umarov’s] place”. As far as can be judged, the Russian propaganda media did not pay much attention to him until mid-August, 2023. But then the situation changed. There was information that the website of the Russian Tsargrad TV channel was blocked in Kazakhstan by the decision of the Ministry of Information and Social Development. The head of the Ministry made an explanatory statement.

Darkhan Kydyrali said that the blocking of the website of the Russian Tsargrad TV channel was due to the adoption of measures to ensure information security. The Minister of Information stressed that this topic should not be politicized.

“There is no need to look for political subtext in this. As in any State, information security is important for us. Therefore, content, a site that poses a threat to the information space, contradicts our Constitution, the legal norms of our state, and the law on the media, is blocked”, the minister said in an interview with Qazaqstan TV.

As an example, Darkhan Kydyrali pointed out that since 2016, more than 40 websites registered abroad had been blocked in Kazakhstan. “The site you mentioned is one of them. We warn publications about the need to comply with our standards, but if the media do not comply with our requirements, then they will certainly be blocked. And regardless of whether it is foreign or domestic media, we urge everyone to observe and respect our laws”, he added. What happened next?

Here is what the Novye Izvestiya newspaper has to say in this regard: “After the blocking of the Tsargrad TV channel in Kazakhstan, calls for radical action against the neighboring country began to be heard among the Russian patriotic public… There were reports that in Kazakhstan ‘a hunt has begun for the defenders of the Russian world’. Even calls for active action began to be read in some passages by Tsargrad”. Konstantin Malofeyev, who owns the Tsargrad TV Channel and had founded the Tsargrad website, came out with a very robust statement on the Kazakh Information Ministry’s decision.

After a few days, on September 1, 2022, Kazakh President Kassym-Jomart Tokayev dismissed Darkhan Kydyrali from his ministerial post. It is noteworthy that he received the Kazakh Minister and heard the latter’s report on the performance of the Kazakh Information Ministry only 20 days before that. Then Kassym-Jomart Tokayev issued instructions to Darkhan Kydyrali. Nothing, it seemed, portended dismissal. But Darkhan Kydyrali was soon dismissed.

On June 3, Eadaily.com published the above-mentioned article about Gagarin Avenue in Almaty on May 31, 2024. On June 3, Kassym-Jomart Tokayev met with Almaty Mayor Yerbolat Dosayev and heard the latter’s report on the performance of the Almaty city administration. Then the Kazakh President issued instructions to Yerbolat Dosayev. Time will tell what’s next…

And here is what else to be said on this occasion. Zhaiyk Karibzhanov, in his article entitled “How Ivan Ivanovich quarreled with Ivan Nikiforovich: ‘The last high-ranking Mohican’ has been kicked out” and published by zonakz.net on April 8, 2004, reported the following: three days earlier, on April 5, Zhaksylyk Doskaliev, who had earlier been the sole Kazakh Government member as Minister for Health, representing the Junior zhuz, or West Kazakhs, also known as Alshyns, was dismissed. There was also information there that he had previously been publicly subjected to accusations of tribalism by Kazakh MP Erasyl Abylkasymov, who is said to belong to the Jalaiyr tribe of the Senior zhuz just as does the current Kazakh president, Kassym-Zhomart Tokayev. Yerbolat Dosayev, a native of Almaty, was then appointed in his place as Minister for Health of Kazakhstan.   

In his piece, Zhaiyk Karibzhanov further said: “A unique situation has now emerged on the [Kazakh] government Olympus. Nothing like this has perhaps happened in more than 80 years of the existence of the republic in the autonomous, union status, and then in the sovereign status. What such a course could or should mean is difficult to say, as this all smells like an arbitrary practice directed against West Kazakhs as a whole plus their representatives in the center [of the State] in particular”. Then it was thought that among government members, there was none from the Junior zhuz, or West Kazakhs, also known as Alshyns.

But here is what French newspaper Le Figaro’s François Hauter wrote around the same time in this regard: “For all Kazakhs, political life boils down exclusively to the internal struggles of hordes [zhuzes] and clans [tribes]. ‘The transfer of the capital to the city of Astana neutralized the aggressive tendencies of the Middle zhuz towards the Senior one because Astana is located on the territory of the Middle zhuz’, explains a keen observer. ‘I can never be the President of the Republic [because] I belong to the Junior zhuz’, a young Minister said confidentially” (François HAUTER ‘Guerre de clan dans les steppes kazakhes’, mardi 21 septembre 2004, page 4).

The Kazakh media had then already formed the idea that there were no representatives of the Junior zhuz in government. And no one had denied it at the time. However, the above report by François Hauter in Le Figaro showed that this idea was mistaken. But since that young Kazakh Minister was not named by François Hauter, his identity has continued to be kept incognito until the present day. And one can only make assumptions about who this unnamed Minister might have been. In this context,  we now only know one thing: according to Wikipedia, Yerbolat Dosayev, who was appointed as Minister for Health of Kazakhstan instead of Zhaksylyk Doskaliev in April 2004, though he is a native of Almaty, is also a member of the Junior zhuz. Is he the one who said in 2004 to the French newspaper Le Figaro’s François Hauter ‘I can never be the President of the Republic [because] I belong to the Junior zhuz’? Only François Hauter can tell whether this is the case or not.

For decades, Pakistan’s automobile industry has been mired in multi-billion dollar frauds that have hindered its growth, impeded economic progress, and perpetuated unemployment. Despite efforts to regulate and monitor the industry, the persistence of corruption and illegal activities continues to prevent the realization of its full potential.;

The series of frauds within the industry is extensive, involving the illicit importation of vehicles, non-compliance with localization requirements, and the exploitation of legal loopholes. The Pakistan Engineering Board, tasked with overseeing standards and practices, struggles to enforce regulations effectively. Consequently, the prices of vehicles in Pakistan remain inflated, and the benefits of a robust automobile sector, such as job creation and economic development, are left unrealized. The frauds are not limited to small-scale operations. Major players in the industry have been found guilty of importing vehicles without proper authorization, thereby evading taxes and duties. These activities have caused significant financial losses to the national exchequer and have distorted the competitive landscape of the industry. Moreover, the influx of substandard vehicles compromises the safety and satisfaction of consumers, further eroding trust in the sector.

If the Pakistan Engineering Board were to enforce regulations strictly and ensure compliance with localization policies, the impact on the industry and the economy could be transformative. By adhering to a merit-based system, the cost of vehicles could be reduced by half within a few years, making them more affordable for the general population. Additionally, millions of jobs could be generated as new industries emerge to support the manufacturing of vehicle parts locally. A merit-based system would ensure that only companies meeting stringent quality and localization criteria are allowed to operate. This would foster healthy competition, encourage innovation, and attract foreign investment. Furthermore, a transparent and accountable regulatory framework would deter fraudulent activities and instill confidence among stakeholders.

Currently, many companies exploit the system by importing thousands of vehicles without proper authorization, sending billions of dollars out of the country through the State Bank. These vehicles often fail to meet the quality standards of their countries of origin, yet they flood the Pakistani market, undermining local production and quality control efforts. The Pakistan Engineering Board’s lax enforcement exacerbates the problem, allowing substandard vehicles to circulate freely. The economic implications of this non-compliance are profound. The outflow of billions of dollars weakens the national currency, exacerbates the trade deficit, and hampers economic growth. Moreover, the lack of investment in local manufacturing stifles industrial development and limits job creation. As a result, Pakistan’s automobile industry remains dependent on imports, unable to leverage its full potential for economic development.

Pakistani law stipulates that a new company can import only 100 vehicles initially, showcasing them in various showrooms to demonstrate their features. Within five years, 70% of the finished vehicles should be imported as Completely Knocked Down (CDK) kits, while 30% of the parts should be produced locally. Within seven years, at least 70% of the parts must be manufactured in Pakistan to foster local industry and job creation.

However, the previous regime saw significant breaches of these regulations. For instance, a close associate of the then Prime Minister imported 10,000 vehicles directly into Pakistan, bypassing legal limits and sending hundreds of millions of dollars abroad. This blatant violation not only hurt the economy but also set a precedent for other foreign companies to follow suit, further destabilizing the industry. The preferential treatment of certain companies undermines the rule of law and creates an uneven playing field. It discourages legitimate businesses from investing in the sector, knowing they cannot compete with those enjoying undue advantages. This perpetuates a cycle of corruption and inefficiency, preventing the industry from achieving sustainable growth.

In contrast, India has successfully localized its automobile industry, with millions employed and vehicles being manufactured with 100% local parts. This achievement highlights the potential benefits for Pakistan if similar standards are enforced. The local assemblers’ cartel in Pakistan, however, actively resists these changes to maintain their monopoly and continue reaping profits from an unregulated market. India’s success story serves as a model for Pakistan. The Indian government’s proactive policies, investment in infrastructure, and support for local manufacturers have transformed the automobile industry into a global powerhouse. By contrast, Pakistan’s reliance on imported vehicles and parts stymies innovation and growth. Learning from India’s experience, Pakistan can implement policies that incentivize local production, attract foreign investment, and create a thriving automotive ecosystem.

To combat this ongoing fraud and stabilize the industry, the Pakistani government must enforce stringent regulations on local assemblers, compelling them to achieve 100% localization. Such measures would not only create employment opportunities but also ensure the availability of affordable and high-quality vehicles for the Pakistani population.

Additionally, preventing the illegal outflow of billions of dollars would bolster the national economy. Implementing these changes requires a multi-faceted approach. First, the government must strengthen the Pakistan Engineering Board, equipping it with the resources and authority to enforce regulations effectively. This includes regular audits, inspections, and penalties for non-compliance. Second, incentives should be provided to companies that invest in local manufacturing, such as tax breaks, subsidies, and access to finance. Third, public awareness campaigns can educate consumers about the benefits of locally manufactured vehicles, fostering demand for domestic products.

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