With the registration of new companies under the Companies Ordinance, 1984 beating previous records month after month over the past several years, the available figures for June 2004 will certainly make an unmistakable testimony to the resilience of the private enterprise in Pakistan.
A news report pointing to registration of 269 new companies with the Securities and Exchange Commission of Pakistan during June 2004, as against 159 companies during the corresponding month of the previous year, thereby depicting a sturdy increase of 69 percent.
Significantly, of the 269 newly registered companies, as many as 263, including nine public unlisted companies, 247 private companies and seven single member companies, all were limited. It will also be noted that the aggregate authorised capital of 263 limited companies registered in June 2004 amounted to Rs 10,025 million, and of 247 private companies to Rs 4,767.7 million. As for the seven single member companies and nine public unlisted companies, their authorised capital stands at Rs 20.7 million and Rs 5,236.6 million respectively.
Significantly, the sector-wise break-up shows the textile composite sector in the lead, with 15 companies, followed by 12 companies each in the communications other than transport and information technology sectors, 11 each in housing and real estate and food and allied sectors.
As the figures reveal, new registrations confirm continuation of the same growth trend over a whole year with a 42 percent increase over the preceding year.
For the number of new companies registered in 2003-2004 has been placed at 2,208, as compared to only 1,553 companies registered in the previous financial year.
It will, thus be noted that over the past five years, the private sector has witnessed a steady growth in incorporation, with new registrations rising to 2,208 from 1,073 companies incorporated in 1999-2000, thereby depicting an overall growth of 105 percent and an average growth of 21 percent every year.
Again, as stated in the news report under reference, the growth in incorporation has been quite impressive and beyond average expectations, pointing to the prospects of an identical trend in the country's corporate sector in the coming years.
However, the economy's growth pattern as evidenced from the performance of the private enterprise will hardly be found to be evenly distributed all over the country. This should become clear from a close study of the break-up of new registrations. For, the highest number of new registrations during the month of June was reported by the company registration office at Lahore, with 95 companies (35 percent of new incorporations), followed by Karachi and Islamabad with 89 and 60 companies respectively. The CROs of Faisalabad, Quetta, Multan and Peshawar registered nine, five, three and eight companies respectively.
While distinctly depicting the private enterprise's undiminished urge for making the best of unfolding opportunities, the break-up denotes that in so far as the entrepreneurial enthusiasm is concerned, it will appear to have lately bypassed Karachi which has been the economy's nerve centre over long decades. Certainly, the difference it depicts cannot be attributed to any bias as such, but can be seen as owed to the tradition bound behaviour of the private investors.
Keen though they happen to remain to take calculated risks in pursuit of profit wherever spotted, they would shy away from it in the face of abnormal uncertainties, more so with continuous negative signals from the law and order front. With terrorism of the worst kind stalking Karachi for over two decades, and protests and strikes causing interruption in business activity too often, Karachi has remained relegated to the background as an attractive venue for trade and industry.
This should leave little to doubt also from selective shift of a number of business firms from Karachi to safer places elsewhere in the country. And this is, evidently, what the area-wise break-up of the new company registration reveals.
It is, however, just another matter that minus Karachi, the ongoing efforts for the revival of the economy will continue to leave a great deal to be desired. For the pivotal role of this mega city in this kind of a brave exercise lies, essentially, in its very build-up.
Right from the early years of its transformation from a sleepy fishing village into a pulsating city of ports, factories and commercial houses, Karachi has acquired almost all that a gigantic trade centre essentially requires.
Ignoring all these realities and looking for greener pastures elsewhere for all times to come is more likely to prove an exercise in futility. Now that the economy is firmly poised for a take-off, it will be in the fitness of things for the government to banish terrorism and economic interruptions from Karachi.
It will be worthwhile, in this regard, to recall that Finance Minister Shaukat Aziz warned only the other day that fulfilment of the country's economic agenda would only be possible if conditions remain peaceful and the growth target of 6.6 percent for the economy is attained.
Saying this at a press conference, he had also pointed out that frequent strikes in Karachi in the month of May cost the national exchequer over Rs 1.5 billion a day in unearned revenue, causing a gap in the month's tax collection target.