FOR far too long now, Pakistan’s economy has operated in an environment in which there is very weak enforcement of the rules, allowing large vested interests to have virtually unimpeded sway in crucial decisions that can have far-reaching consequences for the economy, and the larger public interest. As an example, unscrupulous property developers have been able to announce housing colonies on land they don’t own, sell files for plots that will never likely materialise, and dupe unsuspecting investors in a large number of cases. A few independent power producers were caught billing the government for dubiously calculated capacity charges, but how many others were never caught is not known. The stock market saw a historic crash in 2008 because of illegal modes of leverage. The oil and gas sector has seen unscrupulous practices in the matter of LPG pricing as well as dealers margins in CNG. The banking sector is one area where the regulator’s hand has been comparatively stronger, though even here much room for improvement remains. There are innumerable examples where, due to their political clout and relative impunity against regulatory action, large capitalist interests have routinely been able to skirt or defy the regulatory framework within which they are supposed to operate.

Something in this environment appears to be changing today, although how far this movement will go remains to be seen. In the past few days, we have seen Ogra standing up to the LPG distributor lobby, the SECP standing up to the brokers, and Nepra standing up to IPPs and government dictation. Granted, these look like baby steps compared to the enormity of the task before them, but the newfound willingness on the part of these regulators to assert their prerogative is something new after years of acquiescence. Hopefully this willingness will be able to grow with time, and remain wedded to advancing the public interest rather than getting caught up in the stormy winds of our political culture.

If this assertiveness is to continue, and eventually rise above the massive vested interests it is supposed to regulate, it will need to venture beyond the confines of the regulator’s own powers. In the case of the SECP, for example, beyond asserting its prerogative over the community of brokers and registered corporate entities, it needs to straighten out the community of auditors and credit rating agencies as well since their work is crucial to the discharge of regulatory obligations. Likewise, in sectors like oil and gas and power, the regulators’ efforts need to be informed by reliable financial statements amongst much else. It might sound like a tall order, but if the regulators can work together to fix the architecture of the business environment they are supposed to monitor, it can go a long way towards unlocking the potential of Pakistan’s economy.

Published in Dawn, March 12th, 2017