Call it a strange coincidence, but in the context of finding solutions to Pakistans economic woes, the more I follow the economic and political events in Japan, the more similarities I find between such developments Different in nature though, still similar in outlook, Japans economy much like ours has also been sending out some very weak set of signals. Their current account surplus and core machinery orders slumped in July/August 2011, as a global slowdown threatened the fragile economys recovery from recent calamities like earthquake and tsunami. Pakistan, which likewise never really recovered from the worst floods (in global history) to hit nearly all parts of the country is now in the grip of yet another flooding disaster. The latest signs of weakness in Japans export-driven economy come as the woes of sovereign debt in Europe roil financial markets, and a softening in the US, the worlds biggest economy raises concern over global growth prospects. The surplus in Japans current account, the broadest measure of the countrys trade with the world, dropped 43 percent in July/August this year from $12.80 billion, recorded a year earlier in 2010. The disaster at the Fukushima Daiichi nuclear power plant was a factor in the sharp decline in the current account surplus, as increased reliance on fossil fuels (oil and liquefied natural gas) ramped up imports. To make matters worse, growth has continued to be elusive, as unemployment pressures continue to rise. Underscoring a bleak investment outlook, the private sector loan demand continues to decline and the sentiment about the economy among the frontline service sector employees (hotels, financial services, retail outlets, taxi drivers, etc.) also stands significantly sagged when compared to the beginning of the year. Pakistan, as we know, is suffering from its own set of similar economic problems pertaining to mounting debt, private sector credit decline, rising unemployment, and a serious blend of real and perception-related issues on the health of its economy. Ironically, the thought process of these two governments on solutions to their debt and fiscal deficit issues also appears to be very similar, albeit the strategy on how to disinvest is likely to be different. In the face of opposition to tax increases and the failure of successive Japanese governments to further enhance the current tax revenues, the present government is considering selling shares in state-controlled companies, including Japan Post Holdings Co. (lot of sentimental attachments here), to defray the costs of post-quake reconstruction. In Pakistan, we have been struggling with our state-owned and state-run enterprises and contemplating to make similar moves. Not only they consume nearly Rs400 billion every year in deficit financing, but also continue to fail to live up to their potential of delivering efficient and market-driven services to their customers and the Pakistani public. However, while our government remains largely clueless on how to provide relief to the people, who have suffered destruction as a result of the floods for the second consecutive year now, the Japanese government wants to spend an additional $168 billion over the next five years to rebuild areas affected by the March 11 earthquake, tsunami and nuclear power plant disaster. It had originally planned to meet the expenditure with $128 billion in tax increases and the remaining $40 billion by spending cuts and selling state assets, including equities. The trouble with this plan is that many ruling party lawmakers are wary of alienating voters by raising taxes - something, not very different from what we see in Pakistan In the wake of this attitude by the politicians (unexpected for Japan), the government is left with little option but to sell its assets. Remember, begging is not considered an option in Japan The two companies identified as first to be offered happen to be also one of Japans oldest, Japan Post and Japan Tobacco. In addition, the government holds some $300 billion worth of shares in various companies and is mulling on selling about $20 billions worth out of these for the moment. However, while investors and investment financial institutions would be more than happy to pick up any offers placed on the table by the Japanese government, the move itself of liquidating government holdings is not that simple. The laws governing state asset sales in Japan are quite strict and any sale needs to meet the overall state objectives of anti-trust, improvement in efficiencies and protection of the larger public interest. That is a tough task by any stretch of imagination and that is why most analysts feel the only prudent way in the end would be to revert to the straight and safe option of primarily funding the requirements through tax hikes. Further, just as we witness at home, political squabbling among Japans elected representatives is also their countrys own worst enemy. For example, everyone believes that the sale of Japan Post Holdings will face insurmountable political pressure and is highly unlikely to go through. Political hurdles blocking the sale are quite a few - a long delayed postal overhaul bill has to pass Parliament, but the largest opposition is against it, making its enactment difficult in the divided Parliament where the opposition controls one of the two chambers. Meanwhile, the Japanese central bank has issued a discreet warning to its leaders that it will put up strong resistance attempts are made to dilute (beyond a certain point) the financial securities and the reserves, which the state of Japan holds. By now most of us would be trying to find the reason why any comparison between the economic and political realities of Pakistan and Japan could be made. Well, in this context, if we look at the opposite spectrum, the most glaring difference that immediately springs to mind is the political short-fuse of the Japanese people, who apparently have no patience with mediocrity or poor management. That the new Prime Minister Yoshihiko Nodas is the sixth government in as many years is enough proof of their impatience. Some would argue too many in such a limited period of time. However, the fundamental question for us in such a situation is: How long any country can afford to put up with bad governance? The Japanese might be too hasty, but we must ponder over the question. The writer is an entrepreneur and economic analyst. Email: kamalmannoo@hotmail.com