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BR Research

Whos to blame for bad rankings?

Published September 10, 2009 Updated September 10, 2009 12:00am

A flurry of rankings data has dominated the week so far. Ranked 11th (extreme risk) on the Food Security Risk Index, 85 out of 183 in the ease of Doing Business 2010 and 101 out of 133 in the Global Competitiveness Index 2009-2010, Pakistans standing in the comity of nations has been at a standstill, and getting worse in some cases.
On the face of it, the government is largely to blame. After all government instability/coups, corruption, political instability and inefficiency government bureaucracy have been cited as few of the most problematic factors in doing business in Pakistan.
The GCI rankings tend to support this view. Pakistan is ranked 89 in Diversion of Public Funds due to corruption, 82 rank in Public Trust of Politicians, 95 in Independence of Judiciary, 105 in Transparency of Government Policymaking, 114 in the extent to which organized crime imposes costs on businesses and 103 in Efficiency of Legal Framework in Settling Disputes in the business environment to name just a few.
But the fault that this factor-driven developing economy failed to increase its global competitiveness yet again is not to be blamed entirely on the government. It turns out that the private sector is nearly equally responsible.
Pakistani private sector corporations are ranked 112 out of 131 in training and employee development, 95 in the degree of customer orientation, 100 in terms of ethical behaviour in interactions with public officials, politicians and other enterprises and 80 when it comes to corporate spending on research and development.
The private sector is also believed to be poorly managed, as GCI reports that there is little reliance on professional management and most corporations rely on relatives or friends without regard to merit. Pakistan is ranked 91 in this context and 117 in terms of the efficacy and accountability of corporate boards.
Poor corporate governance, inefficient public bureaucracy and low output of private sector all lead to the core issue of lack of justice and inadequate law and order situation. No monetary, fiscal and exchange rate policy mix and no democratic or authoritative model can work in the absence of powerful law making institutions and above all a self-regulated conscience of individuals.

Copyright Business Recorder, 2009

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