Winds of change – are we ready for them?

Politicians need to make some tough decisions to keep the economy afloat.

The politics in Pakistan is often very exciting. Those who dislike the current government, leave no stone unturned to give them a bad name.

Because of all this happens a lot and that too very frequently, the biggest sufferer remains the economy of Pakistan and its people.

With general elections expected anytime from 90 days (for those opposing the government) to 15 months (for those in the government), there is a lot happening in the country, which is not at all good for the economy.

There are chants for revolution and change of system, but the question remains, do we know what sort of change we want, and if yes, are we ready for the consequences?

It is worth noting that we are wasting precious time every year for want of decision making. While a lot has been written on the failings of this government, what all political forces need to do is to keep their rhetoric on one side and sit together to chart the course for the next 18 months and beyond.

The political leadership needs to realise that the most worrying thing for any economy is uncertainty. Uncertainty for sure doesn’t attract fresh investment and can lead to divestment by existing investors.

Some of the matters that need deliberation from the political leadership include the following

Fresh census

The last census held in Pakistan was in 1998, which itself was after a lapse of 17 years. How can we develop our country and plan for infrastructure improvements, which are most necessary for economic growth, if we do not have the right population numbers? After all, the exact size of our population will also allow for businesses to plan their strategies and target the ever growing market that Pakistan is.

Energy crisis

With circular debt and additional capacity matters being sorted out, we are continuously ignoring the standardisation of electrical appliances in the country as well as the planning element in the housing sector. Electrical appliances being manufactured and used in the country need to be brought on international standards of efficiency as a lot of energy loss is taking place because of this.

Specialised development organisations

Just like National Electric Power Regulatory Authority and Oil and Gas Regulatory Authority were created to separate ministries and pricing decisions, the political parties have to agree for the revival and development of specialised development organisations like Pakistan Industrial Development Corporation, Industrial Development Bank of Pakistan and a possible Infrastructure Development Finance Corporation. These entities have to work towards development of specific sectors and have to become stand-alone entities that can allow for securitisation of assets and public participation in them.

Taxation and valuation metrics

When we talk about increasing tax base, the rhetoric of corruption in Federal Board of Revenue takes credence than the actual tax evasion being done by our people. A major decision that needs to be taken by the political leadership is for progressive valuation of assets owned by people in Pakistan. Estimation of incomes of people abroad are also most necessary as based on this we can better estimate the size of our economy.

Restart the privatisation programme

One of the easiest ways to attract foreign investors is to promote the privatisation of state owned enterprises.

These are some of the starting points for this deliberation by the political parties as far as the economy is concerned. By deliberating and charting a course of action which may include giving constitutional guarantees to their decisions, it will augur well for the business sentiment and the economy.

The writer is an investment banker based in Sharjah.

Published in The Express Tribune, December 19^th, 2011.