Dr Kamal Monnoo If ever an epic was to be added to the stock of Greek mythology on the topic of gods punishing people for toying with their economic management, the script writer could not have possibly been better served than by studying the working of our present-day economic managers. They are simply driving the economy to destruction The disconnect in the key tiers cum components - finance, commerce, central bank, industries, power, revenue collection and securities and exchange - is obvious, where each may be well meaning and even brilliant within their own framework, but they somehow are unable to have a larger perspective in the national context. The elementary lesson in corporate management or governance that we were handed down at school: while individual brilliance is great, it is the excellence of the 'contribution to the core objectives what really matters in achieving the overall success Some of these ministry or department leaders would argue and perhaps rightly so, but we do not even know what the core objectives are? Again, this is a basic mistake a manager can make in governance. Strange as it may sound, already three years down the road one is genuinely at a loss on what precisely is our strategy for rescuing the struggling economy? I have heard the Prime Minister mention on a few occasions that we plan to focus on exports to generate an export-led growth on the pattern of China, India, Malaysia and the likes; at other times, he has talked about austerity, reducing governmental expenditure, fiscal prudence and in the process getting rid of the dreaded IMF. Ministers, on their part, have boasted on issues ranging from solving the energy and power issues, raising revenue collection from already cash-starved and struggling businesses and public, arresting inflation through monetary coerciveness; and then of course in-between we have also heard the President on his idea of shoring up domestic investment by facilitation through friendly policy making, creation of a conducive environment and by raising the necessary infrastructure (utilities included). Amazing These strange visions pose a dilemma: Who is going to make them come true, even if they could make sense? Because, not only have they failed to identify near and long-term goals, but have also been unable to assign undiluted responsibility to a single leader possessing the competence and vision to gel things together in order to organise the countrys economic engine in a way that all its components work in tandem with one another to achieve common goals. Instead, there are gross contradictions, which just dont fail to amaze If a meaningful increase in exports is the goal, then why take steps that hamper exports? For instance, continued increase in the export re-finance (mark-up) rates that are now in double digits (regional competitors like India and Bangladesh provide the service at literally half the rate); the raise in the export documentation fees by nearly 4000 percent in one go by TDAP (Trade Development Authority of Pakistan); and continuous non-prioritisation of utility supplies to exporting industries (something done by our regional competitors a long time back) - these are measures that belie common sense. The argument given by some central banks personnel that providing regionally competitive export refinance heats up the economy and promotes inflation is simply ludicrous You do not need an expert to tell you that unless you promote domestic investment, you cannot expect any significant Foreign Direct Investment (FDI). In todays world of global linkages, it is in essence the local investor who primarily lures FDI. So, when the President says that he intends to focus on domestic investment, the statement makes a lot of sense and carries weight. However, we fail to grasp the point that FDI knows no boundaries, nor is it made on sentimental grounds. Decisions are taken purely on merit of profitability and management and unless Pakistan can present itself as a stable, competitive and lucrative destination, investment of any sort will just not happen. By stability one is not just referring to law and order and geographical politics, but also the sheer stability in policy-making i.e. the economic policies should make sense, follow global trends and should not be tampered with at short intervals. Sadly, one sees instead is, (a). Central banks fixation on how in Pakistan monetary-tightening carries a strong correlation with inflation - couldnt be further than the truth since there is now little elasticity left, as the common man is already down to basics, (b). Complete mismanagement of power that dents the competitiveness of Pakistan as an off-shore manufacturing base, (c). Needless and unhealthy provincial rivalry that prevents pooling of resources and achieving economies of scale (instead of using Punjab as a gateway to economic activity since it has somewhat more developed human resource, infrastructure and linkages, it is being looked upon as a rival), and (d). A crumbling infrastructure in constant neglect (i.e. both in tangible and intangible ways). Somehow, we always seem to be swimming against the tide While the world looks towards growth and employment creation, we, with one of the largest youth population in the world, frame policies that discourage manufacturing. When troubled economies like Iceland show us the way to get out of heavy waters by introducing reforms and improving corporate performance, we just pay no heed and continue to blatantly reward corruption. Whereas the developed and emerging economies are busy stimulating their economic activity (per se), we seem to be bent on starving ours Lastly, any which way we look at it our love affair with the IMF (the lender of the last resort) is full of dangers and pitfalls. If history is anything to go by, one cannot think of a single example where countries made progress while in the IMF lap. We know very well that a number of the present day Asian tigers, when trapped in the infamous 'Far Eastern Trap, had to shun the IMF to get out of the mess. But then prudence and timing have never been our forte. To overcome the RGST (Reformed General Sales Tax) setback, we thoughtlessly raised domestic fuel prices at levels that can easily be termed as reckless. This, also without paying any serious attention to global oil trends or to a sense of timing. It is no rocket science to decipher that the beginning of a new year can never be an appropriate time to give bad news? People are rejoicing with hope for a better future and remember in most cases their annual increments have just matured. With such a heartless announcement, the government just washed away in one stroke all that they had gained by toiling hard for an entire year and turned their hope into despair. Why couldnt this have been done in phases and a few weeks later? Regardless of what the international community may have to say, I am very confident and secure in my mind that Pakistanis are a resilient bunch and Pakistan a country with tremendous potential. With agriculture commodities on a high for more than 18 months running, cotton (our strength) rated as the top performing commodity in 2010 and the grain trading corporations rating Pakistan in the top 10 agriculture destinations of the world, 2011 can surely be our year of economic success, that is if only we can learn to manage ourselves properly. The writer is an entrepreneur and a political economist. Email: kamalmannoo@hotmail.com.