08 February 2004	Sunday	16 Zilhaj 1424

KARACHI, Feb 7: A decade or more of management of national economies by technocrats worldwide, has provoked a debate whether economies with virtues or de-regulated markets, perform better.

A growing number of people say that inflation and deficits have taken the centre stage in governmental decision-making, resulting either in recession or painfully slow economic recovery and fuelling unemployment and poverty.

The dominant role that the financial community plays in official policy formulation has also brought into question the wisdom of having autonomous non-political central banks under IMF ideological umbrella.

Finance capital remains fragile as trillions of dollars are tied in speculative activity in stocks, currency and real estate. IMF officials say: "Credit risk truly continues to be relevant, particularly when banking sector runs into deep trouble." And the speculative environment helps financial institutions make money and show profits. Finance capital is facing an organic failure with its linkages with real economy weakened. The process of money turning into productive capital is flawed.

The outcome is that economic development is no longer on the international agenda. The people-centred and development- centred economic policies have no place or a low priority in the current official domestic and international policy framework.

There are also voices that remind the policy-makers of the need to maintain a right balance between the government and the market. It goes unheeded.

Then, companies whose entire focus is on the balance-sheet lack much of the urgently needed social responsibility, though there is growing evidence of its rich rewards. It's positive impact on productivity, profitability and human welfare has just been brought out in a book "Venturing beyond profit", written by management expert S.A. Abidi.

In a case study on PARCO, the author depicts how a responsible enterprise in a developing country can be run successfully by being a part of the process of building a society it depends upon. The company has a natural pay off.

Social responsibility helps make the same profits or more by developing worker's skills to improve his productivity as well as the quality of his and his family's life. It is tempering company policies with human values. And it is counter-productive to exploit a situation for profits.The author unveils a route to societal development through social capital or people working together in "social units" for the collective good, often transcending what may look as selfish interest in the short-term.

Every company has to develop its own management and work culture. "Many of the management failures can be traced to indiscriminate reliance on alien cultures," says PARCO managing director Shahid H. Hak. He adds: "We underrate everything that is indigenous. We seek answers to our problems in Harvard case studies rather than seek home grown solutions. While management practices may have universal applicability, not all can be used beneficially outside the environment they evolve."

The indigenously developed company culture has ensured a continued growth. Incorporated in 1974, PARCO started with a seed money of Rs540 million. It has now assets worth Rs91 billion and equity base of Rs22 billion, all through self-financing. Initially a Pakistan-Abu Dhabi enterprise, it now has business partnership with Shell and TOTAL.