Porous policies

LAHORE: Government policies are the drivers of socio-economic change and should be formulated to serve the broader national interests and not the vested ones; however they become a drag for the same if they have holes in them.

This is the norm all over the world as governments ensure the policies are made for the wellbeing of masses but unfortunately our policies in the last over six decades have failed to deliver for obvious reasons.

Had we been able to think beyond tomorrow, the situation would not have been so pathetic. Most of our policies are not transparent; loopholes are deliberately kept to favour someone in the name discretion. The discretion may be in the form of waiving government levies, relaxing qualification and age to accommodate the favoured one or let someone off the hook for any illegality.

Economy operates on the strength of the government policies like issuance of licences, permission, collection of taxes and duties, making illegal economic transactions accountable.

The trade policy, labour policy and industrial policy are formulated to attract investment and create jobs. These policies if properly made ensure elimination of illegal trade, establishment of industries and commercial ventures in residential areas and protection of the rights of both the workers and the employers.

There is no uniformity on trade policies that have been in vogue in Pakistan. Level-playing field is not provided in most sectors of the economy. This has resulted in lopsided growth all around with favoured sectors becoming permanently dependent on government concession. These sectors have become inefficient as their inefficiencies are covered by the government concessions.

The sectors that were left out have failed to develop to their actual potential. It looks illogical to provide subsidies on power and gas to only five favoured export sectors of economy. Why are other exporting sectors neglected? If we look at the favoured sectors the export growth has barely moved up but we saw a surge in export of cement sector that does not get power and gas concessions.

The pharmaceutical exports of $200 million are made without government favours, while carpets, sports goods and surgical goods exports are much lower or in some cases equivalent to pharmaceutical exports. The neglected sectors are increasing their growth by improving their efficiencies, while the protected sectors are barely maintaining their exports only because they get concessions from the government.

rice sector is another example where exports increased without government help. Why can’t we have a uniform trade policy for all exporting sectors? It is obvious that the exports of neglected sectors would surge if they are also provided a level-playing field. Even today the government is contemplating further facilitations for the protected export sectors.

There is no industrial policy. The labour policy on paper favours the workers but in reality the employers have the upper hand as implementation of this policy is next to impossible except in public sector companies, where the workers have played havoc on its employer -the government of Pakistan.

Trade bodies in Pakistan are not operating in the interest of the national economy. Each trade body is trying to grab benefits for its members even at the expense of other businesses. Trade Ordinance 2007 had just been proved a piece of paper that could not do any good to both the trade and industry, while if it had been made and implemented with proper consultation, it would have changed the socio-economic conditions of the masses considerably and that is our problem number one. For instance, there should be a change in the voting rights for the businessmen.

For example, there should be four classes instead of two in all chambers of commerce and industries. In addition to Corporate Class, Associate Class, there should be Permanent Members and Temporary Members in the Trade Ordinance. The status of a corporate member should be given to those who have at least 50 registered employees and every member having 10 registered employees should be an Associate Member, while others having more than five-year membership of any trade body should be treated as Permanent Members and those who have one-year membership should be Temporary Members. The latter two must not have any voting right. And if any change is made in the Trade Ordinance, it should cover all the segments of the society and the common man should be the ultimate beneficiary because they are suffering due to multiple factors and must be taken care of if we have to progress.

Inept policies have encouraged corruption. Perceptions about corruption in Pakistan are based on actual experiences where investing firms were forced to pay bribes even to get what was rightfully and legally theirs.

Various studies reveal that the firms making investment in Pakistan have to pay bribes even to get water, telephone and electricity connections. Corruption is largely associated with business-government interface and this menace is more widespread here as compared to other countries. Corruption has been labeled by the most rating agencies as the most repressive factor standing like a wall in the way of Pakistan’s economic freedom.