A string of challenges in our national journey has brought our signature trait of resilience into sharp relief. The prudent tackling of the first spell of COVID-19 pandemic brought to the fore this characteristic, but this feature will be put to a real hard test in post-pandemic economic recovery by a government that has predicted more turbulence ahead.
As the government vows to clean the economic Augean stables, it can hope to achieve its objective only by partnering with the country’s businessmen. The tall order of enhancing exports, minimising the trade deficit, getting rid of circular debt, retiring debt, luring investment, creating jobs and cutting public sector losses cannot be achieved without working hand in hand with the corporate sector in a strategic manner. The continuing pandemic and its fallout have intensified several-fold the government’s critical need to count heavily on business organisations, at a time when an aggressive joint political opposition has made the government’s “failing economic agenda” their vociferous battle cry.
While the window may have begun to close for the reformist government in displaying progress on economic priorities, especially for the man-on-the-street, it still appears to be moving casually in building confidence and collaborating with the nation’s wealth creators. On assuming charge, the government had spiritedly announced the establishment of a Council of Business Leaders to initiate private-public interaction in order to discuss policy matters, reforms and grievances. But later, it was thought that corporate heads may liaise directly once in a while with the Prime Minister and his economic team.
In a preliminary touch base with business leaders last September, Prime Minister Khan had promised to facilitate the business sector by, inter alia, creating a competitive environment, reducing bureaucratic red tape and unnecessary regulations, and lessening the burden of tax-compliant companies. Since then, a few such interactions have taken place but these need to be convened on a regular basis. The periodic stocktaking sittings can help the government in re-setting its course on several issues due to the evolving national, regional and global situation.
Corporate organisations may choose their representatives for such conclaves on the basis of their profile in creating wealth, payment of taxes, generating employment and exports etc. In these parleys, the corporate side could be led by Nishat Group as this most eminent conglomerate has been the country’s biggest taxpayer and one of the largest employers in the private sector, in addition to being the producer of a widely diverse array of products, services and strategic public amenity. i.e. electricity with global extensions across continents.
The government will also have to insulate businesses from the unintended, adverse implications of an all-out drive against corruption, particularly after the passage of the anti-money laundering bill by the Parliament. The habit of looking at businessmen from the prism of political affiliations will have to be done away with. The politics-business hyphenation should not be allowed to mar the complementary environment between the public and private sector. Similarly, the members of the government team with a business background or connections should be viewed as bridge builders between the two sectors.
In creating ease of business, the government has not yet deviated from more-than-needed preference to foreign investors. FDI comes in when domestic businesses are enjoying a hassle-free environment. Unless domestic entrepreneurs are facilitated, an unfavourable perception of the business climate will continue to cast its shadow despite an improved security environment. Though FDI has grown to $2.56 billion in 2019-20, up from $1.36 billion in 2018-19, yet it is less than the $2.78 billion recorded in 2017-18.
Pakistan Business Council continues to urge the government to give due importance to domestic investments as these form the bulk of private capital injected into the economy. The Council recently reminded, perhaps for the umpteenth time, the Board of Investment to “ensure quality facilitation services to all investors, local and foreign” as it is not just “the Board of Foreign Investment”. We can learn from the success story and best practices followed in Bangladesh, as a government-corporate partnership has enabled this country to overtake India in GDP per capita. The policy support from their government has won for the South Asian country the position of the second largest apparel manufacturer after China.
In addition to helping the government in economic reforms, thriving businesses could be a potent bulwark against fifth generation and hybrid threats. The business sector is the principal actor in lending resilience to the economy as it is directly involved in financial, labour, monetary and employment markets and investments, not to mention corporate philanthropy and CSR. But the business organisations will only be able to lend economic strength to the country if they are themselves able to withstand and avoid political and economic shocks and disrupting changes with essential cushion from the policymakers.
Our military’s strong resolve to protect CPEC-related business investment and regional zones amply underscores the strategic dimension of the businesses. Last year, a rare exchange of views took place between the military leadership and the country’s top corporate heads. Such strategic interactions are also to be attended by heads of organisations dealing with investment, commerce and industries, and taxes should be institutionalised as these actors have crucial roles on the basis of a strong security-development nexus in our geo-political scenario. In a recent statement Army Chief General Bajwa appreciated the public-private partnership initiatives and said that the private sector must be “supported in greater national interest.”
The need for the government to take businessmen on board on a regular basis cannot be more urgent, especially when the country is facing a second and more pernicious onslaught of COVID-19. Appointing a focal federal ministry for streamlining issues confronted by businessmen could be an idea worth working on. Such a dedicated department would encourage massive domestic and foreign investments by constantly evaluating the governance structure and chalking out predictable, consistent and transparent policy framework and its implementation.
Premier Khan foresees a time when job seekers from around the world would flock to Pakistan. This miracle would be well-nigh impossible without a large-hearted and sustained embrace by the government of agents of economic development. And this partnership could be a sure and the best bet for taking on economic and fiscal challenges. The power relief package for industries is a promising step. But such measures ought to emanate from a consistent business policy rather than be just stand-alone actions prompted by political pressures.