President Asif Ali Zardari's desire for political parties and the business community to draw up a minimum agenda of the "Charter of Economy" has been widely hailed by business leaders, who met him last Tuesday. In fact, the work in this direction had already commenced. Pakistan Business Council, representing Pakistan's top corporates - both national and multinationals - is scheduled to meet the representatives of all the major political parties at Islamabad today.
PBC is expected to come up with industrial community's input on five critical areas: education; energy; macroeconomic; regional trade; and social protection. These recommendations were finalised after several rounds of debates between business leaders, academics and experts, who were divided into five panels. The creation of a Pakistan Economic Forum by PBC is indeed a laudable step as reforms are not a one-time event but a sustained and protracted process. And economic challenges facing a nation along with geo-political situation keep on changing with time.
In Pakistan, committees, task forces and commissions are regularly formed on a variety of issues. Comprehensive reports with detailed recommendations are forgotten soon after these are submitted for consideration. The focus by the leadership at the helm is usually on fire-fighting on a daily basis through ad hoc measures.
Planning Commission has drawn up over the years five-year plans and also 10- and 20-year visions. However, we as a nation, have failed to stay the course to do something that is difficult or takes a long time until it is finished as every successive government has tried to undo what its predecessor has done before. They were able to do so because the very institution, which provides continuity of governance, ie the bureaucracy or civil service, is often turned into a "government" service by the government of the day. The issues as well as the solutions are known to all and sundry. Poor monitoring leads to weak implementation.
The five areas identified by Pakistan Economic Forum are vital for achieving economic progress. And, brining political forces to a minimum economic agenda with the economic agents is a much-needed goal. A nation gets its vision from the political forces it has. And, co-ordination among and advises to federating units is a job undertaken by the Federal government. The objective is to achieve economic growth whereby financial transactions move faster for the economy to grow. In addition to capital and labour, energy is also a vital input.
Pakistan lacks capital, suffers from a deleterious shortage of skilled manpower and faces an acute energy crisis. Nevertheless, we offer a market of 200 million consumers to investors. Their confidence can be boosted through improvement in law and order by effectively addressing cases of ransom, extortion and terrorism. In developed economies, education is treated as an investment in human capital, since benefits accrue to an educated individual over lifetime of activities. One of the most important benefits is higher income from labour market participation. Investing in education will provide us the skilled manpower which can create a surplus in industry, agriculture and service sectors to efficiently meet defence needs.
An economically strong nation which ensures a fair, equitable and just distribution of resources among its federating units can easily protect the country against real or imagery threats of fragmentation. Hence, the need for a reversal in our present priorities of expenditure. When government's top priority is to remove fiscal weaknesses and get back on track with the International Monetary Fund - concerted efforts are required to somehow make energy available, slash drastically the quantum of subsidies and raise revenue, although the choices to do so are astoundingly difficult, politically speaking.
Therefore, help from both political parties in parliament - to pass the Budget FY 2012 - and business community is needed to pre-empt strikes and shut-downs in the near future. Avoiding populist measures and undertaking reforms are also heavily dependent on PPP leadership's decision about the dates of the next general elections.
The government did move towards raising electricity tariffs and bridging the gap between the higher cost and lower sale price for POL products. But once the coalition started to fall apart - political expediency and partisan interests became the norm. In short, sound economic goals were abandoned. Restructuring of public sector enterprises and austerity measures committed in the Finance Bill 2009 were dropped stealthily while non-productive expenditures were allowed to soar.
Efforts to have much-needed legislations such as Corporate Rehabilitation Act; Amendments in Banking Companies Ordinance; Competition/Merger Control Regulations 2007; Amendments in SBP Act; Corporate Law Reform Commission went nowhere as these were found to be lacking deep sincerity or seriousness. We wish the business community the best of luck for the effort that seeks to make the political leadership from across the divide to understand and then adopt a course so that the engine of growth can continue to rev higher.
However, to shun ad hocism and remain focused on monitoring and implementation of solutions adopted require continuity and sincerity of purpose. The starting point for all this has to be civil service reforms at all three tiers of the government - Federal, provincial and local. Business leaders quite rightly feel that the economy is over regulated, at all the three tiers, and every time they have to move through a bureaucratic maize to get their job done.
The need of the hour is a significant impetus in growth, which will ultimately lead to help reduce the alarming incidence of unemployment. Let us start by magnetising the perks and privileges of bureaucrats. Entice top professionals into the officialdom. And, have a legislative and administrative framework with a view to regulating businesses only to a level that does not hamper competition, but effectively discourages monopolies and cartels from taking advantage of the consumers. Businesses must not be viewed as competing centres of power. But as taxpayers, they need to be respected as they pay to keep the politicians in power.