Promoting long-term growth

While most people will by now have noticed the astonishing post-election rally on the Karachi Stock Exchange, analysts at the country’s investment banks are picking up other, more subtle, yet more important indicators that things are looking up for the Pakistani economy. Some of the largest and most conservative businesses in the country are looking to make long-term investments in capital expansion, and are even willing to do so by taking on debt.

This is an excellent thing. But what delights us most is that the apparent trigger for this optimism is a stable, peaceful and democratic transfer of power.

Corporate Pakistan is betting on democracy and that is excellent for the country’s long-term stability, but perhaps the politicians should pay attention to some of the needs of the nation’s businesses. And on this front, they should copy their previously successful methods: just as the 2006 Charter of Democracy paved the way for political stability to begin taking shape in Pakistan, the country’s leaders would do well to come up with a similar Charter of the Economy.

This idea, of course, is not new. It was originally proposed by Shaukat Tarin, a former finance minister and currently an adviser to the government on economic affairs. And it is more doable than the Charter of Democracy ever was. While Pakistan’s political parties have significant differences on what they believe is the right balance of political power in the country, they disagree far less on economic matters.

The charter would not have to confine parties too narrowly to specific policy prescriptions, but certain generally agreed principles would go a long way towards giving businesses the kind of predictability they need to make long-term investments, which is the only sensible way to organically grow the economy. For the economy-focused Prime Minister Nawaz Sharif, this should not be a difficult task to undertake and we hope he does so.

Published in The Express Tribune, July 11^th, 2013.

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