Businesses in Pakistan operate with the same short-term mentally as the governments in the country do. They stop long-term investment at the first sign of crisis akin to governments curtailing development funds for public appeasement.
The result is that most of the enterprises concentrating on short-term gains have failed to grow up to their potential. A few entrepreneurs who continued their investment in periods of stress have become more resilient to crises that occur so frequently in our country.
Successful entrepreneurs realise that the majority of our population is young, which is the highest consuming class in the world. They are sure that the demand for goods and services would continue to increase irrespective of any crisis.
We will need more food and home appliances and all other goods and services that improve the quality of life. They continue investing, factoring in the drawbacks of encountering less competent governments in midterm at least in their business plans.
They know that corruption is there to stay for a long while in Pakistan. They are aware the power and energy rates would remain high for another decade. Still they go on investing. Many successful enterprises have reaped the fruit of their perseverance and faith in Pakistan’s economy. They have enlarged their foothold in different economic fields.
Most of the textile tycoons of yesteryears are now also equally powerful in cement, power, and dairy sectors. Some are in banking and few have entered the automobile sector as well. They expanded into these sectors after seeing that the existing players were reluctant to take risks of further investment.
They did not neglect their basic textiles origin and are operating the best updated spinning and weaving mills. They post robust growth in exports though they have been overtaken by new entrepreneurs in the value-added textile sector.
These tycoons were reluctant for a long time to enter the apparel sector and more enterprising newcomers have edged them out as top textile exporters. Still their risks are adequately covered. The textile and construction boom is benefitting them more than their peers.
Their banks are making more profits due to the innovative products and policies they introduced, which are now being followed by their more experienced competitors. These entrepreneurs grabbed every opportunity to expand their business empire.
They now own the largest shopping malls in the country and are in the construction business as well. Three decades back they were at par with most of other textile players but their consistent long-term investment is paying dividends.
Unfortunately, we lack a visionary ruling class that believes in development. Ayub Khan is an exception who invested in long-term projects. Mangla Dam was completed during his era because there was not even a delay of one day in the project. Tarbela was completed 4 years after he was deposed. These are the only two mega water projects that are the lifeline of our agriculture.
Pakistan had few resources at that time and poverty was high, but instead of doling out subsidies he concentrated on development work building roads, skill training institutes, schools and colleges. Poverty started reducing during the last years of his tenure (he ruled for 10 years), but thereafter there was a sustained reduction in poverty because of his industrialisation and agricultural policies and stress on long-term development.
Today, we are short of quality schools, colleges and dependable infrastructure, our housing shortage has increased manifold. The majority lacks pure drinking water. We have the largest percentage of stunted children. Our infant mortality rate is much higher than India, Bangladesh or Sri Lanka.
We are now a severely water stressed country. Our development expenditure is much less than the size of subsidies. Even direct monthly transfers through BISP have not dented poverty, but increased the number of beneficiaries. Most subsidies go waste without making any improvements in the lives of the poor.
Some subsidies are provided to cover losses incurred due to corruption. These measures do not reduce poverty, but please a large population that is beneficiary. If someone musters the courage to eliminate these subsidies at the rate of 25 percent per year, we may get resources for development. Development would reduce poverty in the long run.
The state and private sector must invest sufficient capital and talent in large initiatives to achieve a winning position. They should aim to generate value not only for shareholders or favourites in case of government, but also for employees, customers, and other stakeholders (general public in case of state). Both the private sector and the state should resist the temptation to take actions that boost short-term profits (public appeasing in the case of the state).
