The most critical challenge is country's state of economy. The Prime Minister recognised that state economy is not a matter of just domestic importance but has global dynamics attached to it as he confronted at UN General Assembly the stark reality that nations, inclusive of majority of Muslim states, opted to stand behind India on the strength of its economy, ignoring the just cause of Kashmiris and the human tragedy unleashed on them by New Delhi.
Prime Minister Imran Khan, while hosting a delegation of representatives belonging to the various Chambers of Commerce and Industry & prominent business leaders, last Thursday at Islamabad reportedly said that the federal government was fully committed to providing all possible facilities to the business community. The members apprised the premier of the problems being faced by them and also presented their proposals in this regard. Their woes largely emanate from the harassment by NAB and FBR.
"A committee comprising businessmen is being formed so that matters pertaining to business community and NAB could be amicably resolved," the PM declared. The business leaders had earlier met army chief Gen Qamar Javed Bajwa. This was the second session the business leaders had with General Bajwa in a short period of three months.
Their main gripe was that the government does not go beyond verbal assurances and that its words do not match its actions. They appreciated the sincerity, responsiveness & commitment of the Prime Minister but expressed disappointment over the situation, claiming that nothing works on ground.
It may be true that economic stagnation, if not economic slide, is due to near absence of implementation. But one needs to reason out why? It is definitely not much on account of fear of harassment of businessmen or bureaucrats by NAB; nor is it on account of many repetitive issues cited by the business fraternity.
The core issue, in fact, is the implementation and implementation is all about governance and management. It is here where the fault lines occur, of which, some of the major ones are identified as follows:
1. The responsibility of implementation of government policies rests with the executive cadre of government machinery - bureaucracy. The bureaucrat of today is just not cooperating with the government of the day for reasons which are not too difficult to perceive and comprehend.
2. The next cadre of government machinery responsible for implementation is the management cadre at public sector enterprises (PSEs). Many of the PSEs are without permanent CEOs and are governed by ineffective and vested interest-driven boards of directors and front line managements.
By and large, the officiating CEOs are bureaucrats from ministries on part-time basis - the role they relish. Understandably, the Public-sector enterprises are rudderless and losses are on the rise.
3. The top level of management cadre comprises the Ministers & Advisors who are responsible for effectively rolling out government policies and delivering results. They, by and large, are personalities of integrity, but could not prove their mettle as game changers as they have reconciled themselves with the status quo.
4. NAB has crept into the system to fill in the gap created on account of ineffective state regulators like SECP, FBR, OGRA, NEPRA, etc. NAB never had anything to do with cases related to tax evasion and any business matter whatsoever.
5. Although the recovery of receivables has improved in public utility companies, their performance is far from satisfactory. They continue to make losses paid for by consumers in terms of higher tariffs.
6. The endeavours of Revenue Collectors viz FBR and Revenue Generators viz Line Ministries such as industry and commerce are not aligned but are in conflict with each other. FBR is in a rush to extract taxes while the industry is trying to re-establish itself in a challenging business environment.
7. The leading fraternity of businessmen remains the same for many decades. Businesspeople, by and large, are happy with status quo and find it difficult to accept the economy of change. Over the years, the new stream of entrepreneurs with a new mindset has not been inducted into the system as opinion makers.
The other major issue is the cost and ease of doing business which has gone wrong, thereby rendering our industry, exports and investment at a disadvantage. Our produce is no longer competitive in local or global markets. Utility cost is the main deterrent while improvement in ease of doing business is much on paper and has not translated into any entrepreneur advantage on ground. Again, both fault lines are on account of ineffective governance.
The real issue is the conflict between the old mindset of status quo against the demand of mindset for change. The two are just not reconciling.
The good news is that the nation has gone through a great paradigm shift and achieved some unprecedented successes in one year. The IMF program has been successfully rolled out and fiscal structural reforms are falling in line in terms of widening of tax base and collection, independence of FBR and State Bank of Pakistan and improvements in their governance. The culture of paying taxes is finding its place in the system.
The nation's foreign policies and outreach to major global players have achieved remarkable successes in a very short period of time as Pakistan is now on the right side of both the US and China - the two largest global economies. The nation has well caught up with India to achieve the distinction of being a 'Nation of influence' in the region.
The institutions of Armed Forces, Judiciary and Political leadership are on the same page which should shed away much of uncertainty in the market.
The missing link, however, is the economic governance which is all about competence. The nation needs to be governed by managers of change and not managers of status quo.
(The writer is a former President of Overseas Investors Chamber of Commerce and industry)