THE establishment’s resistance in liberalising trade relations with India, and the chaos that precedes the end of each dictatorial regime, are two key factors that have shifted the business community from its historical position on democracy.

Despite its reservations over the Nawaz government’s acumen in the current crisis, corporate Pakistan has generally backed democracy.

All chambers and trade bodies made their stance public earlier on. In Punjab, a section of business, alienated from the ruling political hierarchy, supports the opposition to the Nawaz government. The tycoons, however, insist that they do not want democracy ‘to end, but improve’.

“Business managers understand that autocratic rules can’t provide the stability they crave, and their end is disruptive.The chaos and mayhem often wash away prior gains and upset future plans,” Shaukat Tareen

“How long can one watch the Sharif brothers rewarding their friends and family with public assets? There was a need to build political pressure on the government so it mends its ways and broadens its support base,” commented a cement magnate from Lahore.

“I am not only a businessman but also a democrat and will oppose any extra-constitutional intervention in the democratic order tooth and nail,” he added.

Karachi, however, is an exception. In the country’s commercial hub, a sizable segment of businessmen is hoping for an end to what it calls the ‘failed experiment of democracy’. It wishes for a government of technocrats that shuns populism, improves governance and provides an enabling environment for the private sector to prosper.

There is enough evidence in the country’s tumultuous history that indicates a clear preference of the corporate sector for dictatorial regimes. This was reflected in the spike in private sector activity, culminating in higher average GDP growth rates, during dictatorships. Average GDP growth under dictatorships has been 5pc in Pakistan, as opposed to 3pc during democratic intervals.

Dawn interviewed business leaders, professionals and executives of multinationals to capture the changing corporate mindset and the factors that prompted it.

Shaukat Tareen, a noted banker and former finance minister, agreed with the perception that the constituency for democracy is growing and taking in its fold classes and segments that were earlier hostile.

“All political parties are pro-business and ready to do all it takes to appease the business community. Besides, business managers understand that autocratic rules can’t provide the stability they crave, and their end is disruptive. The chaos and mayhem often wash away prior gains and upset future plans.

“Our business community is maturing and has reached a stage of development where a bigger portion of a small pie does not satisfy them. It wants the pie to grow. It perceives its fortunes tied, to an extent, to the government’s attitude towards the economic powerhouse next door. The reluctance of the most powerful in the establishment to normalise economic ties with India disorients them.

“You can’t fault the businessmen of Karachi for their disillusionment with the democratic system. They suffer exclusion. For them, the business environment is most challenging in the wake of a near complete breakdown of governance in the province,” Tareen explained.

Asad Jafar, President of the Overseas Investors Chamber of Commerce and Industry, in a written response to a query, said: “We can only guess why a pro-democracy position is more visible than before. In my view, the possible reasons could be any one or a combination of the following factors.

“One, experience shows that frequent change of government brings ad-hocism and a lack of policy continuity. Two, there is the fatigue factor. Having established a working relationship with the government that assumed power last year, it is difficult for business to go through the hassle of building a relationship with a new set of people, even if they are perceived to be better, since it requires investment of time and effort to develop an understanding of policy and priorities.

“Three, our past experience of abrupt change has not left a sound foundation of policies, processes and regulations, despite the fact that during the period, we did post good economic performance. From a FDI perspective, an environment that ensures consistency and predictability attracts large, consistent flow of foreign direct investment,” he said.

Federation of Pakistan Chamber of Commerce and Industry President Usman Zakaria says his community has realised that problems can’t be wished away. “The gap between the economic potential and its realisation through gainful utilisation of resources has actually been increasing in Pakistan. Regional countries that we saw as our equal three decades back are now miles ahead of us in development.

“In 1970, Malaysia’s exports were $50m, against Pakistan’s $200m. Today, we are stuck at $25bn, whereas Malaysia’s exports have reached an impressive $650bn. The focus needs to shift from leg-pulling to the development of the economy. We interact with the world and have understood the value of a democratic order for the future of business and the country.”

Ziaul Haq Sarhadi, a KP business leader, is critical of confrontational politics, which, he feels, hurts the devastated economy of his province more than those of other federating units.

“We have been on the frontline in the war against terrorism. Some 3,500 industrial units in KP have closed down and the bulk of the Afghan Transit Trade has diverted to Iran at our expense because of inappropriate government policies. About 200 containers are stuck at the port, escalating demurrage because of transport disruptions. This must stop. Stop flogging the beaten,” he let go his frustration.

Majyd Aziz, a business leader of Karachi, believes that the situation is too complex for politicians to handle.

Commenting on the views of representative bodies, he says the government might have hinted to them to come out in its defense. “Privately, the same businessmen talk harshly about the government’s failures.

“A clean government of technocrats which understands the hurdles and possesses and has the will and the capacity to set things right is the need of the time. Pakistan is under too much economic stress to afford the theatrics of politicians, old and new. PM Nawaz has disappointed the business community, as he has failed to deliver on his election promises,” he says.

Published in Dawn, Economic & Business, September 8th, 2014