Jobs seen as crucial in thwarting the Taliban

Exemption from US quotas and duties part of plan to help impoverished Pakistanis find work and prevent them from joining militants.

A worker adjusts yarn at a modern textile unit at the Gadoon Textile Industries factory.

GADOON AMAZAI, PAKISTAN // A failing northern Pakistan industrial estate set up 20 years ago with US aid to offer alternative employment to opium farmers could be resurrected as part of Washington's strategy to counter rising insurgency, officials and business leaders said. They said the United States Agency for International Development (USAID) last year conducted, as part of plans to set up so-called reconstruction opportunity zones, an initial study of the Gadoon Amazai industrial estate in Swabi and similar estates in other districts of Pakistan's North West Frontier Province (NWFP) yet to be infiltrated by the Taliban. "American officials who have visited Gadoon twice told us that the objective of the zones is to boost investment and generate meaningful employment to people who might otherwise be tempted to join the Taliban," said Muhammad Iqbal Khan, project manager of the Gadoon estate for the Sarhad Development Authority. The reconstruction opportunity zones are a key element of a proposed US law for increased aid to Pakistan, the Enhanced Partnership with Pakistan bill, reintroduced to Congress in March. First tabled in 2007 by Joe Biden, who was then chairman of the Senate committee on foreign relations and is now the US vice president, the bill would exempt products exported from the zones from US import quotas and customs duties. Senior US trade officials, meeting with their Pakistani counterparts in Washington on Tuesday, reiterated their intention to win quick congressional approval for the aid bill. "We believe reconstruction opportunity zone trade benefits would complement other United States assistance efforts. By providing trade-based sustainable development, we will give hope to impoverished citizens and reduce extremist attacks on US, Pakistani and allied soldiers working to stabilise the region," they said in a joint communiqué. The bill is now being steered by John Kerry, the senator who currently chairs the foreign relations committee. Visiting Pakistan last month, he said the country's tribal areas were too violent and ungovernable to benefit from financial assistance. Unlike the insurgency-racked Federally Administered Tribal Areas and Swat, Swabi and other central districts of the NWFP are productive agricultural areas, having switched from poppy to conventional cash crops with US assistance in the late 1980s. The Gadoon Amazai estate was established as part of that initiative, with investment attracted by the promise of eight- to 10-year tax holidays and exemptions on raw material and machinery imports. However, the concessions were widely abused by investors with political patronage, causing a furore within the powerful business communities of Lahore, Faisalabad and Karachi. They subsequently pressed Nawaz Sharif, elected prime minister in 1990 and himself a Lahore-based businessman, into withdrawing the concessions for Gadoon, sending the estate into rapid decline. There is thus little faith in the Pakistan government among investors at Gadoon Amazai, but business leaders said a US decision to grant reconstruction opportunity zone status would do much to restore their faith. "Investors will not believe in any promises made by the government, but they may be swayed by American assurances," said Fazal-e-Amin, president of the Gadoon chamber of commerce and industry. "We raised the issue of continuity with them when they visited and they have assured us that, once a decision had been taken, investors would never be abandoned." But security fears have grown since Taliban units from Swat invaded the neighbouring district of Buner two weeks ago. The invasion sparked concerns that the militants were seeking to occupy the Tarbela Dam, Pakistan's largest water reservoir and hydropower project, which separates Buner from Swabi and other eastern districts of the NWFP, and is barely 10km from Gadoon Amazai. Maulana Fazl-ur-Rehman, head of the Jamiat Ulema-i-Islam party, an orthodox Islamist component of Pakistan's ruling coalition, last Wednesday told parliament that the Taliban were moving infiltration units towards Tarbela. The commander of the Taliban's Buner chapter, Maulana Khalil-ur-Rehman, later told reporters that the militants had no such plans, but on Sunday militants blew up a high-voltage electricity pylon linking Tarbela to the national power grid - a tactic previously used by militants from the Khyber tribal agency to disrupt life in Peshawar, the NWFP provincial capital. Pakistan on Tuesday launched a military operation against the estimated 500 Taliban in Buner, who are reported to include foreign militants, using paramilitary and army ground units supported by helicopter gunships and air force jets. Business leaders at Gadoon said the security situation would have the final say in whether the estate's fortunes could be revived by US trade initiatives. Factory owners said they have already cancelled orders for new machinery because of the increasing proximity of Taliban fighters to Swabi. They also fear the loss of skilled workers, most of whom were headhunted from central Punjab province. "The problem is that it takes years to set up a factory, but even the loss of 10 working days is enough to damage machinery and lose our best workers which, in turn, means we will lose our regular commercial customers and be blacklisted from government contracts," said Sajid Khan Shinwari, director of Alpha Vinyl Industry, a plastics manufacturer. [e-mail]