the central government program, has been very heavily slanted in the direction of protecting local manufacturing, nearly all of which is concentrated in West Pakistan, and has required he East Pakistanis, in effect, to purchase from West Pakistan rather than from the outside world, a policy that we encountered in our own history before the War of Independence, when we had similar tics with the manufacturing in Great Britain, and with many of the same results, both economic and as to our feelings.
East Pakistan should probably be permitted to import what it needs from the outside world under the most favorable terms, whether it comes from West Pakistan or from Hong Kong or elsewhere. That would relieve them of a substantial burden.
There are a number of other detailed economic policies. The result seems to be something that is very hard to pin down exactly, because the West Pakistani Government is discreet enough not to publish all the figures you want. But it does appear that about $90 million a year has been transferred from the dreadfully poor East Pakistanis to the not-so-poor West Pakistanis as a result of these policies, a substantial drain.
Mr. BINGHAM. That certainly is a very striking statement. Without that element, I am not totally impressed with the statement by itself, that public investment has been disproportionate in West Pakistan over East Pakistan because that might have come from West Pakistan resources. If the investment comes from West Pakistan resources, then you can't criticize it too much if it is allocated in that proportion.
But if it comes from the transfer of capital resources, that is a very different matter. What is the nature of those transfers? “What resources are there in East Pakistan that are capable of being transferred? Is it tax moneys?
Mr. DORFMAN; Partly taxes, partly profits on this kind of trade that we have mentioned. Those are the two main machineries. And partly also some repatriation of profit from industries that are located in East Pakistan and owned in West Pakistan.
It is a very peculiar situation that most of the foreign exchange that Pakistan as a whole earns comes either from jute in raw form or jute in manufactured from. Both of those originate in East Pakistan rather than in West Pakistan, so that the poorer part of the country is also the larger foreign exchange earner. It is this transfer of funds that has put the jute earnings at the disposal of West Pakistan.
Mr. BINGIIAM. These factors, then, would tend to explain why the Government of Pakistan is so determined to hold on to East Pakistan; is that right?
Mr. DORFMAN. Partly, yes. And partly also, I think, it is the natural obligation of all governments' not to see part of their provinces taken away. You know what Churchill said, and every responsible government leader feels the same way, not wanting to see the country dismembered.
Mr. BINGIIAM. Thank you.
