Inconsistent policies keep investors at bay

LAHORE: Creating jobs should be the top priority of this government. Poor governance has been the main hindrance in job creation as investors need strict adherence to rules and regulations that are regularly flaunted.

Good governance must start from the top. If the ruling elite strictly followed rules, governance would automatically improve. The man at the top should give a policy guideline on all affairs. The ruling party should opt out of managing postings and transfers.

Let these functions be performed according to the procedures laid down in the book. The posting of police high ups should be on merit and not on the whims of the rulers. There should be no pressure to remove a police officer from the political side. Let the police high ups take the decisions.

When politicians in power take decisions on postings and transfers, responsibility of law and order falls on them too. If the bureaucracy is allowed to operate independently it could be made accountable for anything that goes wrong.

Regulatory institutions must enjoy the autonomy provided to them under the rules. No one from the political side should be allowed to alter their decisions. If Oil and Gas Regulatory Authority (OGRA) recommends certain adjustments in petroleum rates justified by the formula for increase and decrease in prices, it should be notified without any alteration.

We must understand that the government at the time of budget announcement, factors in the income from petroleum products that are legally based on the prices of crude oil in the global market. There is a set formula based on prevailing global prices, under which OGRA fixes the rates.

It therefore does not disturb the profits envisaged in the budget document. It is unfortunate that the prime minister has to approve, disapprove, or alter the OGRA recommendation (this way the PM becomes a super regulator).

The decisions are taken on political grounds. If the increase in rates is rejected, the targeted government revenues suffer. If the decline in rates is rejected, the targeted government revenues jack up. There is no need for a regulator if a final decision has to be taken by the head of the government.

Deviation from rules on the basis of discretion available to many in the government and the bureaucracy creates uncertainty in the market. Governments announce numerous sector specific long-time policies after several consultations with various stakeholders. These policies are regularly tinkered with, eroding the confidence of investors.

Investors need a stable long-term policy according to which they plan their future investments. Since the policy is made in consultation with all stakeholders, it is often a compromise. But once investors make their mind to accept and invest according to the policy, mid-way changes disturb the entire chain of different stakeholders. Adhering to agreed rules and policies is important for investors.

This at least gives certainty to the way the things would move. Giving a concession here or facilitating a particular company there distorts the situation to the dismay of many investors.

An alternative is to introduce transparent policies based on global norms and to ensure that transparency is not violated to the advantage of any one investor or a sector.

Rule of law should ascertain that the ruling elite do not issue specific orders for acting against certain individuals. Action should be taken against all those who violate rules, irrespective of their political affiliation or relations with the rulers.

In developed economies no one is above the law. The investors have confidence to get justice if someone deprives them of a level playing field. They prefer to operate in such economies. To the unruly economies they move only if the profit incentives are high and guaranteed by the government.

Our rulers have violated rules and regulations so indiscriminately that the genuine investors dare not commit their resources in Pakistan without sovereign guarantees.

To instil confidence, politicians must sit together to pass laws guaranteeing that rules would not be violated even by the highest person in the government.

Deviation from rules must result in the termination of services of the bureaucrats and disqualification of the politicians. We have gone so soft on violations that we need extremely strict measures to go back to normal (adherence to rules and regulations).

Job creation would start once we ensure a level playing field to all. We should remove red tape through technology.

Once the federal cabinet approves a policy, it should be notified immediately though technology. Presently after the announcement of a policy, the bureaucrats express their inability to implement it because they had not received the official notification.

Through technology the notification could be sent to all concerned instantly with just one click on a computer.