This PML(N) government unleashed a very sound pre-election manifesto and held a lot of promise to bring about an economic turnaround in the country, but sadly after one year in office their performance leaves much to be desired. So what has gone wrong? The answer, one believes, lies not so much in their failure to identify the real challenges or framing the right direction, but mainly in implementation cum economic governance – The best of documents is merely a piece of paper till successfully exercised! In spite of having some sound economic minds in their fold, the government struggles to instil the elements of competence, transparency, and sound corporate governance in their management style; ingredients which we all know are mandatory pre-requisites to successfully achieving desired results. With the ruling family virtually controlling all decision making in the Centre and in Punjab - the largest province accounting for nearly 60% of national economic activity - a good or bad policy tends to carry far more weightage than it otherwise would in normal circumstances. A wrong policy approach by the house of top leadership adversely affects the entire country’s economic climate regardless of whether it is taken in Lahore or in Islamabad. Though a lot is being said about provincial autonomy post 18th/19th amendments, the present Punjab and Centre leaderships are so intertwined that even provincial actions carry significant bearings on how economic governance actually gets dispensed and perceived across the country. What it means is that while having an extended government in the largest province of the country may carry some synergies, it at the same time also carries a lot of responsibility; since the effects of a wrong policy - in case it happens – are graver and spread quickly on to the national canvas. Let’s look at a few areas, both at the federal and provincial (Punjab) levels, where perhaps this government would have been better off doing things differently.
One of the principal management shortcomings in Punjab over the last six years has been that populism has taken precedence over pragmatism in determining industrial competitiveness. In the last six years we have seen industrial environment deteriorate as the government took decisions that may have given them some short-lived popularity, but have instead compromised on the long-term competitiveness of manufacturing in the province. This in-turn has hurt sustainability in investment, innovation and job-creation. While in Punjab one was expecting structural reforms to take place, of the kind that reduce corruption by distancing unhealthy governmental interference, sadly what we see is a culture totally contrary to this. Without truly understanding the operational ground realities and undertaking a fair evaluation of the bureaucratic human resource at their disposal, the recent policies in the province have in fact fanned bureaucratic corruption and extortion. In the process, unnecessarily exposing the local industry to increased costs due to excessive red tape and at times having to meet unrealistic compliances. And all this couldn’t have come at a more inappropriate time, when the industry in Punjab already finds itself struggling due to an on-going environment of severe energy shortages.
Given that Punjab is the main industrial hub of the nation, the effects naturally couldn’t have just remained limited to the province. We have recently seen some of the worst indicators released by international business watch dogs on measurement of Pakistan’s national competitiveness: The steep drop in our ranking in the global competitiveness index (released this month) is unprecedented and represents the worst fall ever in our history. In addition, on a rather alarming note, Pakistan’s exports are falling despite enjoying some favorable market-access gestures extended to us by our main customer-markets.
Healthcare in the Punjab is yet another area where we see a lot of rhetoric but little progress. If the recent Obamacare lesson is anything to go by, then one needs to realize that for any healthcare revolution to be truly underway, the doctors must be a part of it. Instead, most doctors are anxious and angry about the transformation in rules and regulations affecting them, fearing loss of autonomy, respect, income and growth prospects. So given their resistance, what should a government be doing to productively engage them in redesigning healthcare? The recent American experience teaches us that by adopting typology of motives, applying basic behavioral economics and motivational principles, an effective framework of engaging the doctors can be developed. Four leadership tactics in concert ought to be used: engaging doctors in a noble shared purpose; addressing their economic self-interest; leveraging their desire for respect; and appealing to their sense of tradition. Strong arm tactics just won’t do!
On the national front, the quicker the government realizes that just like the rest of the world, we are going through a global cycle of slow growth, the better it will be for prudent policy making. As growth over the next few years is likely to be below the desirable level, this Pakistani government will need to focus more on areas of competitive credit availability in markets, public support initiatives, and job creation. No better way to do this than to improve the management of the state owned enterprises (SOEs) as not only will this provide us with additional fiscal space (by cutting losses) but also help in job creation. More and more studies and government success models tell us that the “new-style” SOEs more closely resemble true private-sector firms than old-fashioned nationalized industries: they are run by businesspeople, not political hacks, and no longer have bloated workforces. Ironically, we here are not only failing to install good management teams in our SOEs but instead wanting to do away with them cheaply and quickly!
The West once saw the Sino-Indian relations as the ‘Dragon and Elephant’s Conflict and Cooperation’ and they even made up a word ‘Chindia’ to indicate the importance of their cooperation on the global, political and economic scenes. Today, these countries are in reality moving in that direction by fostering increased trade to overcome the element of conflict in their relations. If Pakistan has to truly develop to its potential, it cannot do so in isolation. The government, by advocating a renewed focus on enhanced regional trade - including that with India - is undoubtedly moving in the right direction. However, where it is failing is in its understanding that the very markets it wants to tap also happen to be Pakistan’s biggest competitors. To overcome this challenge, it will need to come up with a comprehensive cum clever trade strategy. A strategy that protects our interests and our home industry without violating global trading principles and at the same time, entails a marketing plan that helps us effectively project our strengths by using professionals to convince potential customers/investors on why Pakistan should be their preferred choice. Given our present geo-political situation, this is a tough task and will require some doing by perhaps using the services of some skilful, reputable and iconic entrepreneurs. Ronald Reagan successfully used entrepreneurial diplomacy in his tenure and the likes of Lee Iacocca delivered on the international economic fronts where the traditional approach had otherwise failed.

The writer is an entrepreneur and economic analyst.

kamal.monnoo@gmail.com