LAHORE: Private sector in Pakistan is shy of competition, although there are numerous instances that show the strength of competition that not only improves efficiency and quality but also brings down prices for the consumers.
Telecommunication is one such example in the services sector. Getting telephone connection in 1990 was an uphill task. After mobile phone technology license was awarded to a single operator in late 1990s, the rate of one minute call was over Rs8 per minute.
When the telecommunication sector was opened up the call rates dropped substantially. Today, a mobile call costs Rs1.50 per minute. The landline can be obtained in 24 hours and rates of international calls are almost the same as local call.
In the manufacturing sector, the two largest beverage multinationals regularly increased their rates on the strength of their superior network and quality. A domestic beverage manufacturer confronted them prudently by first establishing a superior network in Lahore and then in other parts of Punjab before making inroads in other parts of the country.
The rates of carbonated beverages have remained stable in the past seven years, although the rates of all other drinks have increased substantially.
In case of telecommunication, the regulator acted prudently and prevented any collusive behavior or cartelisation of the operators. As far as carbonated beverages are concerned, the two multinationals took the domestic manufacturer lightly in the beginning and lost the opportunity to form a cartel although there is no regulation of prices at the official level.
Another reason is that in both the cases, the companies concerned acted responsibly as did the telecom regulator.
Sustained economic growth will remain a dream if the government and the private sector fail to rise above petty self interests. Government has to improve governance, while the private sector must act more responsibly by paying its due taxes and looking after the welfare of its workforce.
It is due to the irresponsible government policies that there is a dearth of skilled workforce in the country. Now that the damage has been done it is not possible for the state alone to produce the required number of skilled workers in a short time. The government and the private sector have to join hands to improve the skills of the workers according to the market demand.
Establishing vocational training institutes is the job of the government, but the private sector can share some responsibility as part of its CSR to facilitate institutes and imparting practical training to the students at their manufacturing facilities.
Unfortunately very few manufacturers volunteer their manufacturing facilities for training purposes. Most fear that the trained workers, when employed by less efficient competitors, will improve their productivity and increase competition in the market.
They do not have confidence in their competence. Improved skills and technology will benefit them more as they are already established players.
Responsible entrepreneurs know that availability of highly skilled labor force alone does not maximise efficiency. Other factors like workers welfare, hazard free working conditions, medical care and subsidised food for the workers are essential to attain global level efficiency.
Industries that shy away from their CSR in providing training facilities to government institutes are also not enthusiastic in fulfilling their other corporate social responsibilities.
As far as the state is concerned it has to raise its governance level to ensure that the infrastructure projects are completed timely and according to the specification. Corruption in award of infrastructure projects must be eliminated as substandard infrastructures add to the cost of doing business.
The exporters desiring subsidies must realise that it will make them more inefficient. They can reduce costs by improving their processes that bleed them more than corruption and flawed government policies.
