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November 26, 2020

The invisible turnaround

Business

November 26, 2020

LAHORE: It seems that people at large don’t have the right lens to see the amazing economic transformation of the country the ruling elite is so clearly able to view and rejoice about it.

The supposed turnaround in economy, claimed by the rulers, is neither helping the poor, nor the lower middle class, while it has pushed the small businesses to the brink of closure.

The large-scale manufacturing has picked up a bit, but it mostly relates to partly going back to past productivity. Barring cement production, the peaks scaled before this government had not been re-scaled as yet. For instance, the government says the textile industry is operating at full capacity and is sitting on advance orders. But textile exports are nowhere near the highs hit in the last year of the PPP government.

There has been a lot of lip-service about strengthening human capital but there is nothing on the ground suggesting that by the next decade we will have a better qualified workforce. Human resources cannot be enriched in a few months.

It takes at least a decade for a proper foundation to be laid for its enrichment. We have done nothing in this regard. The present system is skewed in favour of the rich and denies level-playing field to the poor. By doing that we are depriving the majority of the population of the opportunity to move up the economic ladder (poor are more in number in Pakistan than rich).

In these testing times the state is not fulfilling its corporate social responsibility. The so-called COVID-19 incentive has died with one-time distribution of a small amount. Where should the people, thrown out of work because of pandemic and past economic misgovernance of this regime, go? The businesses also acted callously by showing the door to their workforce at the first sign of recession. Perhaps they are convinced that things will not improve in the next 32 months of this government’s tenure.

The government and the entrepreneurs must work in cohesion to ensure sustained economic growth as stagnant investment due to various deficiencies is increasing unemployment and poverty in the country. Sustained economic growth would remain a dream if the government and the private sector failed to rise above petty self-interests.

The government must improve its governance, while the private sector must act more responsibly by paying their due taxes and looking after the welfare of their workforce.

Pakistan lost the growth momentum much earlier than virus havoc because of the uncertainties created by this regime in its initial months. The bureaucrats were jailed and businessmen harassed and humiliated by the National Accountability Bureau (NAB).

The reports of appearance of big businessmen were leaked to the press in advance and those they wanted to be humiliated were asked to get down from their vehicles at the gate of NAB office so that the reporters could grill them. Some, who were not meant to be humiliated, were led through the gate to an area inaccessible to the media.

Non-availability of the skilled workforce still plagues the country. Establishing a vocational training institute is the job of the government but the private sector as a part of its CSR should facilitate these institutes for imparting practical training to the students at their manufacturing facilities. Unfortunately, very few manufacturers volunteer to allow the use of their manufacturing facilities for training purposes.

Most fear that the trained workers when employed by less efficient competitors would improve their productivity and increase competition in the market.

Such narrow thinking might benefit the efficient industries for a short time because if all the industries in any particular sector do not attain the same efficiency level then the void thus created would be filled by imports that ultimately give tougher time to even the most efficient manufacturers. Moreover, availability of a highly skilled labour force alone does not maximise efficiency. Our industries need professional management and not the ‘Saith culture’ that operates on whims instead of professional acumen.

Professional management ensures factors like workers’ welfare, hazard-free working conditions, medical care, and subsidised food for the workers to attain global efficiency levels. 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.

The economy is still in tailspin. The rupee is unstable, inflation still very high, and corruption remains on the rise. All these factors are a recipe for disaster.

Revival would come when efforts are made to effectively address these issues. Nothing will improve overnight but steady progress is essential to show the resolve of the state.