The reflection in the mirror

Many voices will agree with much of what has been stated above. It’s not rocket science. At any given time, those in government will always tell you we are making progress in all these areas to boost exports and investment. The billion-dollar question then; why then doesn’t that progress translate into results?

We must recognize that the reality on the ground may be very different to what is told to us. This may be worth illustrating with a few personal anecdotes.

In 2009-10, while working for a consulting firm, we were engaged by the Planning Commission precisely to tackle the question of increasing exports and FDI. I was personally looking at the opportunity in the horticulture sector and visited Fruit Logistica, the world’s largest fresh produce show. In discussions with the three largest players in the sector, all told me that they would be very interested in investing in Pakistan. This, despite the risks of the war on terror, at its peak then. But they questioned why it was me, a consultant talking to them, rather than the government, through its words and actions, showing them that the investment was worth it. The horticulture export opportunity was sized at more than a billion dollars incrementally back in 2009-10. Thirteen years later, the latest fruit and vegetable export strategy shows that Pakistan’s exports remain stagnant, the problems remain the same, as does the prescription. Nothing has moved.

This article talked earlier of creating “Brand Pakistan” to market our exports better. At the same fair in 2010, it was very interesting to see the Pakistan stall and compare it to others. The stall advertised Pakistani citrus and mango, but the mangoes on display were not even Pakistani mangoes. Most of the time, the poorly lit stall wasn’t staffed. By comparison, from India, to Morocco, to Mexico, countries aspiring for a footprint in the food export market had spent money, and their work on branding was more than visible. Pakistan got this right at Expo 2020 in Dubai, but to build a country brand, we need to do this consistently.

We also looked at the pharmaceutical sector then. Given low labor costs and the large domestic market, the pharmaceutical industry in Pakistan should be importing less, while being a great potential source of increased export revenue. But just consider, when an industry is not allowed to recover the cost of manufacturing Panadol, as happened a few months ago, why would it invest in Pakistan to the extent that it develops export capabilities, or to serve more local market needs with domestic manufacturing?

More recently, as minister, I remember engaging with the two large e-taxi companies in creating a legal framework that could regulate the sector but do so in a manner that incentivized them to invest and create jobs, while solving our urban mobility needs. Try as I might to explain to the government officials involved that the primary goal here was not raising revenue, the bureaucracy working on the draft legislation would bring it all back to high service tax rates, and draconian regulations that would only have made both companies pack up and leave the market. We fixed the issue, but it dawned on me how dealing with the government for the corporate sector was a complete nightmare.

Once, a hotel developer bringing an international chain to KP came to me for help. The authorities were telling him he couldn’t build the hotel where he wanted because it was forest land. There were no answers to the question as to how a hotel had existed at the exact same spot for half a century, or why the relevant department had not objected when it was part of the decision-making process in conceiving the project. An identical case recurred with a chair-lift developer.

Another time, I talked to another hotel developer who had expanded to 16 properties in the country, to gauge his interest in leasing properties in the public sector. His reply was very interesting. He said he stayed miles from any government engagement, and that that was the key to his success. He had no confidence in the government being consistent in its policies.

There are examples upon examples I can quote. The above examples serve as enough of a look in the mirror. The reflection isn’t pretty. The irony is, I feel we did a decent job at KP, in trying to overcome some of these challenges. But this didn’t seem to make dealing with the government much easier. Imagine how much more we could do if the government administration were embracing a culture of encouraging the private sector to invest in Pakistan? Our commitment to a market economy cannot just be on paper, or in political statements, but continuously in action after action, over time.

Manpower: Our best export

We do have one success story. Pakistanis abroad. While we bemoan, with some justification, the exodus of people from Pakistan, remember that overseas Pakistanis, white or blue collar, remain an asset. Pakistan’s corporate sector is so small, migrating abroad allows middle class professional Pakistanis opportunities to thrive in a competitive, merit-based job market and improves their quality of life. Life abroad also gives blue collar workers and labourers the opportunity to support their families back home. Pakistan has the 3rd largest diaspora in the world, and they are an asset. Witness the economic impact back home of millions of Pashtuns in the GCC. If you take out the $30 billion overseas Pakistanis remit back home, Pakistan does not stay solvent. It is overseas Pakistanis that save this country from default.

The next time some of you visit Dubai, or anywhere in the GCC, do notice how few Pakistanis you will see behind a counter at a Starbucks, or at a hotel reception. Note how so many jobs where a slightly more advanced skill level is required, you will see Indians, Filipinos, and Sri Lankans, but almost no Pakistanis. And therein lies an opportunity for us. If we can upskill people wanting to gain employment abroad even in basic professions; as drivers; nurses; gardeners; retail and hospitality staff; by teaching them better language skills, and better professional values; these Pakistanis will start to command better jobs and better pay in the job market; and this will result in increased remittances. In my pre-political career, we helped the Punjab Skill Development Fund do exactly this, by creating partnerships between employers, training providers and trainees, in the hospitality industry in the gulf. The question is, are we willing to dismantle our archaic TEVTA based vocational education system and adapt it to the needs of the private sector to achieve these aims?

Certainly, a focus on utilizing and upskilling our overseas Pakistani community is better than their illegal migration through touts, with occasional tragedies such as happened off the Greek coast.

Conclusion

Our balance of payments crisis may have no pain-free or easy solution, but all the fixes discussed are doable. India, China, Vietnam, Morocco, Singapore, Korea, all these countries have their economic transformation stories. Why can’t Pakistan have its own?

The choice is ours. We can be perennially stuck in cycles of foreign exchange shortages and five-year export and investment policies we don’t intend to execute. Or we can commit to an open market economy, a lean government without the red tape and hostility towards the private sector of today, and reforms that continue through electoral cycles; and reap the dividends.

Pakistan is a real economy, with a resource base, and talent. There is no reason we cannot make a country of 250 million, the 5th largest globally, an attractive investment destination for the world. n

By Areeba Fatima

Shell recently announced that it wants to make its shareholders happy, so it’s going to distribute a bigger chunk from its cash flows. This means Shell will pay a bigger dividend and buyback more of its own shares. Starting from the next quarter, it will spend $5 billion on buying back shares, instead of $4 billion.

But hold your horses before you go tweeting this out and then get called out for spreading misinformation. We are talking about Shell plc, the London based global company, and not about Shell Pakistan.

A similar mistake was made by the officers at Pakistan Stock Exchange (PSX) very recently so you must not feel so bad for yourself.

On 19 June 2023 a groggy PSX regulator typed out an “Enquiry on News Published in Print/Electronic Media” and asked Shell Pakistan to answer for Shell Plc’s CEO Wael Sawan’s plan to make the British company’s stocks shinier. This letter was written in