The shutdown in Karachi, a day after Prime Minister Nawaz Sharif assumed office on June 5, was a rude reminder of the complex problems confronting Pakistan. The private sector, however, was not inclined to let the event, even if costly, spoil its mood.
They marked words of the Prime Minister’s first speech on the floor of the assembly and imagined the rest to feed their optimism. They were excited over the mention of a mega project. Nawaz Sharif had declared on Wednesday before the National Assembly, “We have proposed to build rail and road links from the fabled Chinese town of Kashgar to Gawadar port in Balochistan”.
He told parliamentarians that he had discussed the project with his Chinese counterpart Li Kegiang during his visit last month.
The business leaders also noted that the Prime Minister had said that his government would pursue an independent policy of economic diplomacy guided primarily by the demands of the economy.
“Nawaz Sharif stated that he would block financial inflows that are suspected to fund extremist outfits and expressed his commitment to build on the existing economic relationship with China and Iran while pursuing economic relations with the US and the EU in mutually beneficial areas.” This reflects a positive approach, a key business leader told Dawn over the phone.
Asked to comment on the evolving situation in Sindh as a result of growing wedge between the PPP and the MQM, businessmen generally brushed aside apprehensions.
However, some from Karachi were uncomfortable with the MQM’s decision to occupy opposition benches in the Sindh Assembly. They feared the strike on Thursday may turn out to be the beginning of another cycle of politics of confrontation in Sindh.
They hoped that the elected representative of Sindh will deal with the situation to give the province a chance to shine on the strength of superior economic performance.
Over strikes by militants and target killings in Karachi, a former CEO of an energy company said: “We are confident the Nawaz Sharif government will set the ball rolling for the economy. It is always easier to deal with difficult issues when an economy is growing with expanding productive activities and throwing up job opportunities. Give the new government sometime and I am confident that all such problems will become history”, the enthusiast made a point.
On the question what would it take for the private sector to start making significant levels of investments and plough in surplus liquidity to kick-start the economy, the reply was simple.
“Let the government improve the quality of governance. I assure you, the private sector has attained the critical mass to transform the country’s industrial landscape; to improve both the pace and quality of investment and make the economy achieve higher productivity and competitiveness in the global market”, a tycoon from Lahore asserted.
“Allow us some breathing space, leash tax hounds, control bhatta mafia, restore law and order and we will take care of the rest. Pakistan has the market and it has resources. If you improve the business environment I see no reason why an entrepreneur will not invest and expand his industrial base in such a populous country with a growing market”, a business leader from Karachi told this scribe.
Taking a hint from the new government, the National Electric Power Regulatory Authority announced on Thursday an upfront tariff of 9.65 cents per unit for large coal fired energy projects for 30 years.
CEO of a private sector think tank, Pakistan Business Council, Kamran Mirza, said over the telephone that the government is already consulting leaders of private sector over economic policy options.
“The interaction with the government that has to finalise the budget over the next few days might take some time but our members have been invited individually by the PML- N hierarchy for dialogue over key issues such as energy crisis and losses in state-owned enterprises”.
“We have been working on possible market-based solutions. The government should tackle energy crisis, make tax regime equitable and state-owned enterprises efficient on a priority basis. We believe that raising tax rate for segments and sectors already in the tax net will perpetuate distortions.
We have launched a media campaign to educate people on the issue and convey our position to the government”, he said.
Some senior executives in Karachi expressed fear that business lobbies based in Punjab might succeed in influencing the current PML-N leadership at their expense.
“We are hoping that the government will keep interests of all sectors and segments in view when devising a policy and not be driven to appease businessmen surrounding Sharif brothers”, a cement manufacturer said hinting at the textile lobby active in Lahore and Islamabad.
“Mian Sahib must give Karachi the treatment it deserves as the country’s commercial capital. Even if last week’s strike is treated as a hangover of the difficult past, the PM must intervene to secure future of trade and industry in the city. All talk of revival hold no meaning, if Karachi, the economic nerve centre, is allowed to bleed”, a former president of Aptma cautioned.
“Nawaz Sharif will need to balance his business- friendly resolve with his commitment to the electorate for a better life and dignity especially to the vulnerable segments in need of social safety nets. The news regarding chopping of allocations for BISP, or whatever the new government prefers to call it, is not expected to go down well with poor people”, an economist commented.