Federal budget and business leadership

The federal budget is anxiously awaited every year and, as per tradition, the trade organizations get their act together and present their proposals. Every year they find out that most of their proposals have made it to the waste paper bin instead of in the Budget proposals. Business leaders make a beeline to Islamabad to get anomalies removed or secure clarifications and return either empty-handed or with hollow assurances.

Millions are spent on airfare, hotels, and transportation due to this tedious process and time consuming activity of rushing to Islamabad. The double whammy is that most of the business leaders are hostage to those who are non-tax filers who have strong street power and they manage to prevail upon the leadership to toe their line.

There is obviously a downward spiral of vested interests between the documented economy and those who are out of the tax net. More often than not, the registered businessmen and industrialists get the lower end of the stick.

Federal budgets are routinely approved by the Parliament where most of the Members are oblivious of the basics of finance and taxation. What has been the result? Exports have dipped, taxes are on the rise, non-filers still out of the tax net, anomalies still not fully addressed, wealth being diverted to real estate rather than productive areas, and despite all firewalls, capital continues to shift to safe havens overseas.

And, more such negative signals that one can carry on enumerating.

Back-breaking inflation primarily driven by government administered prices indexed to dollar, high Discount Rate, decrease in remittances from Overseas Pakistanis, etc, are signs of anguish and gloom. Terms and conditions of IMF loans, as well as the European Union GSP Plus status, are serious concerns. Zero tolerance of corruption is brazenly talked about but not implemented seriously.

This is eating away the nation’s moral fabric. Political instability is on the ascent which is another negative signal. Deterioration of civic amenities and infrastructure is impacting on economic progress. The enormous increase in rates of utilities (electric power and gas) is devastating for SMEs. Export culture is just a mirage while there is official enthusiasm for imports as well as smuggling, under-invoicing and incorrect declaration of valuation.

The business community is considered a very strong and potent force anywhere in the world. Their opinions, views, and concerns are taken seriously on merit. A united business community can do wonders and boost the nation’s economy.

The depressing fact is that despite all the announcements emanating from Pakistani trade organizations, the ground reality is that the business community is rudderless in turbulent seas. What has been the real time achievement of business leadership in the last many decades? Has it done any soul-searching to grasp the reality? The leaders profess through bombastic statements and press releases that they have done wonders whereas they are seldom taken into confidence by the policymakers and powers that be.

The business leadership, primarily due to its own fault, has been divided like never before. Those external forces who wanted this situation have succeeded beyond any doubt. Business leaders have been relegated to making welcome addresses, presenting plaques, and singing high praises of people who are guests of trade organizations.

Lunches and dinners, laudatory phrases, photo-ops, and making irrelevant statements are the tools employed to lobby with people who matter. Former State Bank of Pakistan Governor, Dr Ishrat Hussain, once very candidly warned the business community about the perils of this approach. He has been proven right.

Therefore, the business and industry leaders must come out of their cocoon and get their act in shape. This is the time for assertiveness. This is the time to forge real unity. This is the time to restrain from meekness, misplaced ego, and inertia.

This is the time to show the strength and power of the engine of economic growth - the business and industrial community. It’s now or never. The decision lies with the business leaders. Walt Disney very rightly said, “The way to get started is to quit talking and begin doing”

Mea Culpa:

(I am also one of those who, as Former President/Chairman of organizations such as Karachi Chamber of Commerce and Industry/Employers Federation of Pakistan/SITE Association of Industry etc., is guilty of being among business leaders that lack/lacked critical mass).

Copyright Business Recorder, 2024