Pakistan advised to invest in education to boost economy

LAHORE: Brian McEnery, President Association of Chartered Certified Accountants (ACCA) shed lights on the future need of accountancy professionals, importance of census in an exclusive interview with The News. 

Apart from heading the ACCA, Brian is also a non-executive director of Ireland’s ‘bad bank’, the National Asset Management Agency (NAMA). Moreover, he also happens to be the non-executive chairman of Ireland’s health and social care regulator, the Health Information & Quality Authority (HIQA).  

Q: Do you think western media portrays Pakistan differently than it is in reality?

A: In my opinion it is very different. I would encourage people to come to Pakistan with an open mind to experience and understand the way of life here. It may be very beneficial if the business community and the professional bodies put forward a coherent and consistent message that enhances trust and positivity about the business landscape in Pakistan. Currently [business] confidence is higher in Pakistan than it has been for some time, which is a reflection of how the fundamental health of the economy is improving. The prospects of construction work going on under China- Pakistan Economic Corridor (CPEC) project this year, and substantial investment ahead, is driving an optimistic outlook in the economy.  

Q: Do you see international institutions’ estimations regarding Pakistan’s economic growth indicators as realistic?

A: In my sense, they are underestimated because of certain aspects of the structure of the economy and aspects which are a challenge, but they are also an opportunity. The challenge being obviously that there is a significant element of the economy that is not on record. And if it were properly recorded and indeed properly monitored, then you could have very different economic indicators including growth, so I suspect, if anything, the economic activities are underestimated.

Q: On the governance side, do you believe economic governance and GDP rate is declining in Pakistan? How can we move forward with this GDP rate?

A: I have been listening to the concerns of the business community since my arrival in Pakistan. While I was in Karachi, the general sentiment of the business people was that there are significant elements of national economy which went unrecorded and in normal instances would be reflected in the GDP and GNP figures. If that were the case then it makes sense that the national output would be significantly higher than what is actually recorded.

Q: What is the future of accountants in Pakistan and how they can contribute in the governance?

A: Having good accountancy and financial structure is the power of every economy. It is one of the fundamental pillars of a good economy. “Knowledge is Power” is a very famous quote, but it is unfortunate that many businesses, policymakers, and certain aspects of government do not make adequately informed decisions in many instances. It’s not just a Pakistani problem but is prevalent around the world. So the generation of high quality knowledge is based upon good and sound decision-making and that is why in the first instance this economy needs many more properly qualified accountants. Businesses today need forward-looking, strategic thinkers with a blend of business and finance skills. And they need excellent communicators with ethical integrity.

The ACCA and its members have always played a leading role in shaping the profession across the world. Clear, credible and consistent financial information means operating to consistent standards – not just financial reporting, but in other areas that underpin the quality of financial information, including corporate governance. Essentially, the ACCA has a role to play in training our future leaders in the basics of corporate governance. We cover not only technical training, but also equip our students and members with a broader set of skills that enables them to make ethical decisions and follow the tenets of good corporate governance.

Q: How do you see the attitude of Pakistani youth towards the accountancy and their aptitude to move forward?

A: The ACCA is present in 180 countries of the world and Pakistan is at the very highest level of priority for us. It is because we truly believe that education is valued in Pakistan and it is valuable to the growth of the economy. It’s a lesser known fact that close to thirteen thousand accountants from Pakistan are working abroad making this country a net talent exporter, which is a good thing in one way but clearly a disappointment in the other. It’s good, because it’s giving back to the economy and having well placed advocates of Pakistan in the international market. However, the real thing we see is that there is an acute shortage of accountants in Pakistan to be able to realise its potential. The bad side is the human talent going abroad when you need it urgently at home. The skills that professional accountants possess are a decisive factor in the growth of the economy and I suspect the need for accountants is underestimated in Pakistan. Roughly estimating and this is a conservative figure, Pakistan needs 40,000 accountants by 2020 and currently it is sitting at around 16,000.

But I feel this is a significant underestimation because Ireland, the country I belong to, has a population of 5 million and we have 40,000 accountants while Pakistan, a country of more than 200 million, has a considerably low number of accountants. That’s why it is an important market for the ACCA. Pakistan has a just struck a great opportunity in the shape of CPEC and the prospects, that are there for Pakistan over the next number of years, are almost unique on the globe. We certainly believe that there is a real opportunity for investment in infrastructure and that does require good planning and good planning requires good financial planners, advisors and corporate finance professionals.

Q: What is the correlation between the CPEC and the work of accounting professionals in Pakistan?

A: Developments such as One Belt, One Road (OBOR) and the CPEC need forward-thinking professional accountants with the relevant skills, knowledge and strategic foresight to forge ahead. As this economy grows and particularly, if you think of it, many companies in Pakistan will need to export, manage foreign currency risk and treasury and for this advance type of skill set will be required.

Technology is also invading the world of finance and Pakistan is lagging behind on that front.

Q: How do you see the future of fintech in Pakistan?

A: Fintech technology sector in Pakistan could transform this economy in a very tangible way. For instance in my country, Ireland you cannot pay wages in cash; it can only be transferred electronically. Now if you transfer money electronically, you can track where the money is going, further you can track where it is being spent. When you know where it is spent, then you can start giving back to the economy. This would also help the country in investing in public infrastructure, so I can see how fintech industry could absolutely transform the country.

Q: How do you keep your older lot of accountants updated?

A: It is one of our key priorities within the ACCA to ensure that it is a lifelong relationship between the members and their accounting. We not only provide opportunities but we also obligate our members to update their skills on recurring basis. For instance, they have to come and learn new technology and software for a set number of hours every year. Many of our members do it not because it’s obligatory, but to enhance their skill sets.

Q: How are you managing the discrepancies of the same query between values of private and government sector?

A: That’s the real problem because if you use wrong data then you make the wrong decision. So it is critically important to have quality metrics because it makes the decision-making more accurate. So I believe the generation of quality information is the founding block and it has to have integrity. There is no good in somebody saying these are the statistics if there is no credible and fundamental science to it.

Q: What is your opinion about the census taking place after twenty years in Pakistan?

A: From the society perspective, census is such a valuable thing to do, because it gives you the snapshot; it is like a picture at a point in time. It is the major planning tool and it is like balance sheet of a company. It says, this is where we are now and where do we get in the future.

Q: What do you think about the growth of higher education in Pakistan with regard to accounting?

A: In all respects, not just accounting, the growth of higher education has to be encouraged. Ireland went through a severe economic crisis when our GDP went from 10 percent to -10 percent in two years. So we witnessed a 20 percent swing but fortunately we are back on 5 percent now. We saw unemployment of 18 percent narrow down to 7 percent and I can pin this down to having an educated work force. If I were in Pakistan, I would revisit the public policy and ensure that the taxes generated are invested into education because education is one of the most fundamental enablers and this would indeed catapult this economy of over 200 million people to another level.