October 17, 2007	Wednesday	Shawwal 4, 1428

The National Reconciliation Ordinance (NRO) does not impact the economy directly by changing the composition of resource availability in the market. However, it does worry the professional business managers who see it in clash with the spirit of justice.

Some segments of the private sector saw it as a continuation of the trend with a little difference. “Who can forget whitener bonds and the wholesale loan write-offs during General Zia’s regime? Those moves were rationalised on the basis that they would bode well for the economy: the first one by bringing the hidden wealth in the mainstream formal economy; the second one by rescuing troubled businessmen to focus again on future instead of being punished for their past business miscalculations.” a business leader reminded.

”This ordinance, however, is politically motivated and targets to give relief without any positive expectation for the economy”, he added. “The trend of rewarding the wrongdoers persists but this time it is more blatant as no attempt has been made to justify it on any ground including economic”, it was explained.

”Only the rule of law can safeguard a free economy. The free market theory goes to the pot if the powerful elite is allowed to get the laws changed to suit their wishes”, grumbled Jansher, a senior manager at a multinational based in Karachi.

The corporate leaders reached for their comments on the impact of NRO on business in Pakistan were mostly caught off guard. Majority was critical but many also viewed it as a political trick than a serious piece of legislation.

”If power abusers are given amnesty it would encourage more corruption in the private sector that already has a tendency to use money to bypass regulations. It is the fear of accountability that forces people to follow procedures and honour laws of the land. You take this fear out and it would be free for all”, said business leader Chaudhry Muhammad Saeed, ex-president the Federation of Chamber of Commerce and Industry (FPCCI) from Mirpur, Azad Kashmir.

”The Supreme Court has the final word on judicial matters. The NRO has been challenged in the court, so we need to wait for the court to decide before airing our opinion”, Tanvir Sheikh, President the Federation of Commerce and Industry commented reluctantly..

What Pakistan needs most is a more transparent legal system that protects property rights and prevents fraud. The virtues of the free market could then improve security without recourse to overly intrusive government and corrupted markets, a trained market regulator told Dawn.

The National Reconciliation Ordinance was announced on Oct 6, a day before the presidential elections, by the President General Musharraf. It seeks to withdraw all cases against parliamentarians and bureaucrats registered between January 1, 1986 and October 12, 1999 in which no conviction has been made. All cases instituted by the National Accountability Bureau (NAB) inside or outside Pakistan during this period will also be withdrawn.

”The confidence of the overseas investors will be damaged by this ordinance. There are already many odds against economic opportunities in Pakistan and this legislation would add another item on the list of negative factors”, said the head of a multinational , adding he is trying to persuade his principal to expand its presence in the country. The gentleman said he prefers not to go on record over a controversial political issue.

”Nobody is punished for the wrongdoings. This is a tragedy of this country”, commented Zahid Zaheer, President and CEO, Pakistan Institute of Corporate Governance and ex-president Overseas Chamber of Commerce and Industry.

The fact is that even earlier in Pakistan corruption and accumulation of unearned wealth has been legalized under presidential orders during dictatorial regimes. “There are instances during General Ayub’s and General Zia’s period when privileged were wooed by the government at the cost of principles of justice (the Whiteners Bonds come to mind), but none been so shamelessly open”, said another business guru.

Sakib Sheerani, the Chief Economist ABN Amro regarded the ordinance to be morally hazardous for the government in a talk show over a TV Channel. The economist probably meant that the government has lost moral high ground now to ask people to be socially responsible not only by paying taxes judiciously but also by adhering all laws governing different spheres of their life.

The economic sphere cannot be assumed to be immune to the affects of moves and counter moves by the political players. It would be unwise to ignore the long- term economic repercussions of decisions made in haste for the short- term political gains.