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The politics of commerce

August 07, 2012

“Traders are now on the rise. Every alley, every bazaar is now organised in the shape of some association or the other. These traders have ‘shutter power’. If a 2000-worker factory is closed by workers in a rural area, it has no effect. But say the shopkeepers of Anarkali close their shutters for two hours, all of Lahore will come to a standstill.” (Andrew Wilder — The Pakistani Voter, 1999)

ON March 20, traders and other small businessmen from across the country descended upon Islamabad to hold a protest outside the headquarters of the Federal Board of Revenue (FBR). The event marked the culmination of a six-month long, countrywide movement for the removal of personal expenditure questions from Section D of the income tax return document.

A cursory look at the form shows that most of these questions were regarding spending on education, residential arrangements, telecommunication, foreign and domestic travel, vehicles and other such expenses. In one corner was the FBR — stating that the amendment would help document the economy and allow the tax authority to check unreported/informal income through a consumption-based audit.

In the other were a host of commerce chambers, trader organisations and business associations — all united in their condemnation of this revision which to them would do nothing except give tax collectors another reason to harass them.

After much back and forth and many meetings, protests, burnt tyres, and smouldering effigies, the FBR caved in and agreed to suspend consumption audits till 2014. In response, office-bearers of trader associations such as the All Karachi Tajir Ittehad, the All Pakistan Anjuman-i-Tajiran, the Central Traders Association, and representatives from the Lahore and Karachi chambers of commerce, thought it fit to warn the authorities that any attempt to revive Form D would be met by an even greater reaction.

This ‘Form D movement’ was a timely reminder of how Pakistan’s political economy consists of two different levels of business-state engagement. At one level, we have an array of powerful manufacturing lobbies such as textile, cement, and fertiliser, which maintain collusive relationships with the political and civil-military elite. It doesn’t matter whether Pakistan is being managed by Nawaz Sharif or Benazir Bhutto or Pervez Musharraf, big business have historically asserted a significant amount of clout on Pakistan’s political and economic space and will continue to do so.

On the other level, we have the state’s dealings with diffused commercial groups found in every market, town and city of the country. This dealing, unlike level one, doesn’t involve fancy dinners or weddings or hotel meetings hosted by the Pakistan Business Council. Instead, it involves bribery and rent-seeking, collective action, advocacy campaigns and local-level lobbying. It involves burning tyres and holding strikes, staging sit-ins outside the DCO’s office or the tax officer’s building. It involves backing specific candidates for MPA and MNA seats, and gathering support from average citizens. In other words, it is an engagement that is broader in scope, participatory in nature and localised in its context.

Over the last three decades, commercial groups from the retail, wholesale and transport sector have consolidated themselves as a form of civil society on Pakistan’s political economy landscape. Their first and foremost goal has been to protect the interest of small capital — both from the predatory reach of the state and from the footprint of big business. For this purpose, collective bargaining and confrontation strategies are used such as reaching out to the PML-N in Punjab, and the MQM in Karachi — as witnessed in the case of the Form D movement and the debate over the reformed general sales tax (RGST).

These relationships between political actors (politicians, parties), the state (the bureaucracy) and small business associations are marked by collusion, concession and, at times, conflict. Over a period of time, it appears that no one actor is permanently subservient to the other. The PML-N, for example, despite being sold as a party of Punjab’s bourgeoisie, sometimes undertakes highly unpopular steps such as removing encroachments and shops from large arteries, de-zoning commercial areas and moving produce markets from one location to another. In each case, local commercial groups have seen the act as a transgression by their elected representatives, and their subsequent responses have suggested that commitment to business and capital supersedes any loyalty to a particular political party or group.

The secondary goals of commercial groups and associations, as gauged from their public positions, encompass the domain of welfare work, religious reform and socio-political activism. Many trader bodies donate to charities (often religious ones), or run small, neighbourhood-level schools. In February this year, the Mall Road traders association carried out a day-long protest against the US Congress resolution on Balochistan. A few years ago, the same traders’ association took out several rallies against the publication of the now-infamous Danish cartoons. In Karachi, the Atiq Mir-led trader body (AKTI) has been rallying against extortion and police expediency, going as far as suggesting that shopkeepers will soon be left with little option but to arm themselves.

It is clear from the prevalence and nature of these postures that commercial actors now play an important part in determining the culture and trajectory of local-level politics in Pakistan. Powerful traders, who hold high office in market associations, are accorded special status in the community for their welfare work and moralistic outlook, and are often inducted as informal middlemen in the political process. They are specifically important during local and general elections, where their accumulated social and economic capital can be put to use for mobilisation and fund-raising purposes.

This local variant of a highly commercialised, ideologically barren form of politics emerges from a services-sector oriented economy where a culture of consumption and a relatively open trade regime has ensured the continued vibrancy of a large yet diffused retail and wholesale sector. But perhaps more importantly, given that the economy’s structure isn’t going to change any time soon, what we can be sure of is that the socio-political and economic impact of these commercial interests will only grow in coming years.

The writer is a freelance journalist based in Islamabad. twitter: @umairjav