Governing by the consent of the governed is not only the sine qua non of good governance, and the mark of a civilized society; it is also an essential pre-requisite for sustained development and building up a prosperous nation.

Wherever fundamental issues of governance have remained controversial and a source of instability in a society, investment and economic development have remained uncertain, often suffering frequent setbacks. The promise and potential, however great, of such societies has not only remained unfulfilled; worse, the international community has come to recognize some of them as failing states, which have not only become a problem for their own people, but also a source of concern for other societies.

The global landscape is littered with the debris of even very rich countries and promising economies that were severely undermined by frequent confrontations on fundamentals of governance amongst stakeholders, causing upheavals in society and taking all their promise and potential down the drain.

A hundred years ago, in the year 1900, Argentina was the fifth richest country in the world after USA, England, France and Germany. A hundred years later, Argentina had already slipped below the 50th position in the world and these days the stories of corporate bankruptcies, bank lootings, food riots, and long unemployment lines make eerie reading about a beautiful country, rich in resources, with a large and well established industrial base, and a highly educated and skilled work force. And no one has yet figured out how to pull Argentina out of this deep end. For first 40 years since its independence, Nigeria, the richest country in Africa and the most promising one of that continent to join the club of developed and prosperous nations, has been riven with ethnic strife, civil wars, loot and plunder and coups and counter coups and is still lost in the wilderness. Pakistan has also recently been cited in some international circles an as example of what happens with a country when the fundamentals of governance remain unsettled and become a frequent cause of destabilization.

At the other end of this spectrum lies Singapore, which as Mr. Lee Kwan Yew said, is “a country which does not have even its own water to drink”, but it is the great quality of its governance which “created assets where none existed” and pulled it out of abject poverty to now to make it rank among the five richest countries in the world. In one of the meetings I was privileged to have with him to seek his help for Singapore business and industry to invest in Pakistan, he asked how could welfare and prosperity be achieved in a country, Lee Kwan Yew remarked, where governments are always looking over their shoulder to see if someone may be trying to stab them in the back, and those outside the government always intriguing to overthrow them? When survival is a continuing uncertainty and no one knows when or how any government will be overthrown, peoples’ welfare will always take back seat on the national agenda, whatever the proclamations of the rulers.

We all know it is so easy to demolish and so difficult to build. In 1996, when Pakistan received $1.25 billion of foreign direct investment, the inward flows of foreign investment had for the first time in the country’s history surpassed the net total foreign aid receipts from all bilateral and multilateral sources which for 50 years had been the backbone of our development strategy. This was a big breakthrough in shifting the country’s development strategy away from aid, loans and increasing debt burden, and towards investment driven development, and Pakistan was well on its way to be receiving $ 5 billion of annual investment flows by the year 2000. The events of the intervening years have severely affected investment flows that have dropped down to less than one half of the benchmark achieved six years ago.

An investment decision is not merely a financial decision, nor is it made by decision-makers as an ad hoc or a project specific decision. Investment decisions are essentially long term in nature, even when made for a specific project, as these are not easily reversible. These decisions are driven by a variety of factors which besides financial profitability, market search, and a company’s own vision of its future, also critically look at the economic, political, security and legal environments of the countries in which the investment will be taking place.

And what investors are looking for in Pakistan is a stable and predictable economic, political and legal environment in which their investments will be operating and disputes arising would be settled. But the stability they are looking for is not a function of any individual’s guarantees however much power that office holder may have amassed or however good his intentions. Stability for Pakistan lies in developing a consensus among various stakeholders on the fundamentals of governance on how power is going to be exercised in this country, how decisions are going to be made, how governments and policies are going to be made and changed and disputes between parties resolved?

Without such a consensus on the fundamentals, our efforts for serious and sustained investment and nation building will remain hostage to the recurring vulnerabilities of governance. Many a time in the country’s chequered history, good and genuine efforts to improve the economic well being of the people have gone down the drain because of sudden and frequent demolition jobs we keep performing on governance under one pretext or the other.

Six years before Prime Minister Zafrullah Jamali attended the recent gas pipeline signing ceremony at Ashqabad, Pakistan had developed, marketed and won over major investor support for an “economic corridor” connecting Central Asia through Pakistan to the outside world and it was to be the future face of prosperity for Pakistan and the Central Asian Republics. The proposed economic corridor consisted of four mega projects— not only the gas pipeline project from Turkmenistan, but also a rail line, an oil pipeline and a highway. This ‘Suez Canal’ on land was to connect the energy resources of Central Asia with energy starved South Asia and the world beyond and bring in technology and industrial and consumer goods in return for Central Asian markets. The biggest beneficiary of these two-way investment flows was going to be none other than Pakistan.

For three years after 1994 the case for Pakistan was argued and presentations made to the prestigious and powerful World Economic Forum which represents the largest assembly of business and government leaders from all over the world to seek their support and collaboration with Pakistan to attract mega investments funds into the country. These presentations, with relevant data, were made to the management of World Economic Forum in Singapore(1994), Casablanca (1995) and finally in Davos (1996) which ultimately convinced them of the viability of the strategic vision of the project.

In consequence, the Forum agreed to co-sponsor a major investment conference in Pakistan to be participated in by leading business and government leaders from all over the world to take a first hand look at the large portfolio of opportunities and help develop a plan of action. This summit of government and business leaders, called the “CASA Economic Summit”, was to be attended by 2,500 investors, senior corporate executives, fund managers, world media and ministers and senior officials from Central Asia, South Asia and the Gulf countries in addition to ministerial rank representatives from the USA, Japan, Russia and China. This was to have been the largest and most powerful gathering of decision makers from business and governments ever assembled in Pakistan. And for Pakistan, after the OIC summit of 1974, the economic gathering would have been the most prestigious and powerful gathering of world leaders on its soil. The entire list of participants was sponsored by the World Economic Forum from among its members. The economic summit was scheduled to meet in Lahore in 1997 and was going to be a gift to the people of Pakistan on the 50th anniversary of the birth of the country. The arrangements for the main venue of this summit and all other arrangements including residences for delegates were already in hand when another palace coup overthrew the government and in the ensuing aftermath the Forum reviewed its decision to hold the summit in Pakistan, and held a smaller economic summit in India in 1997.

The CASA Economic Summit was a quantum jump in establishing Pakistan as a major player in the mainstream of world investment flows and was won over after intense arguments and presentations and in teeth of a great deal of opposition from other lobbies.

Can anyone now seriously believe that Pakistan will be able to host in the near future, an event of this magnitude, bringing in about 2,500 business and government leaders from all over the world?

Yes, some projects, big or small and some development activity will materialize. Some fly-by night-operators and some raiders may also arrive dressed up as investors to take full advantage of the weaknesses of our system and try to grab some profitable national assets. But the serious, substantial and sustained investment and development which creates new business and employment opportunities for our own people and brings qualitative improvement in their lives will not materialize until we resolve and settle the recurring instability of our governance.

Governing and change of governance with the consent of the governed is the foundation on which to create a durable, rational and predictable economic, political and legal environment, which alone can sustain long- term growth and development of the country. Once we have set in stone this fundamental principle of governance, the age of prosperity and fulfilment of Pakistan’s potential would have arrived.

(The writer is a former federal secretary)