THE private sector tends to privatise gains and socialise losses. Therefore, the rescue demands made by them at times of stress, need to be scrutinised closely to spare society the additional burden of paying for their shortsightedness or weak business acumen.

When things are going well, business executives claim full credit and manage as much gains as possible. However, when in a difficult patch, they put the blame on everyone and everything but themselves to make a case for a bailout.

It is probably too early to comment on the full impact of the global financial crisis as economies even those of China and Japan are coming under its pressure. The bailout package to shore up the distressed sectors from America to Europe to the rest of the world is making headlines. It, however, does not absolve the highest paid executives, bankers and CEOs of companies of their responsibility in making of the crisis that threatens the viability of many economies.

The discussion has also been initiated in the media over the opportunity cost of bailout plans sans accountability of those who were paid dearly to make the system deliver. There are fears that rescue plans worth billion of dollars would squeeze the capacity of developed economies to spare resources for developing economies in need of external support.

“The complaint against investment bankers that they have dragged the world into recession through their greed and arrogance is not totally incorrect. I think the European people are justified in their demand for accountability. You can not just call it systemic and let everybody off the hook”, a retired banker with international exposure told Dawn commenting on the issue.

“It is only fair if the highest paid CEOs, asset managers, stiff necked investment advisors, risk managers, professionals heading monitoring and credit rating agencies and bank executives are called upon to do some explaining as to why they were unable to monitor unsustainable deals for such a long time and allowed problems to take such deep roots that it ended up in such an imbroglio”, said an analyst.

Back in Pakistan be it bankers, brokers, realtors, textile or other tycoons, they fly high over the success they believe is exclusively of their own making not inclined to acknowledge any role of institutions or society beyond their company premises. Here they loathe taxes that they pay and are known to maintain more than one book of accounts for tax avoidance.

More arrogant ones look down on all others as children of lesser gods and create islands of luxury for their kinds away from dust and dirt of cities and villages. They sometimes overstretch and publicly mock the institution of government/regulators and portray them as demon out there to pull them down.

“Pakistan is a poor country where the rich are socially irresponsible. They perpetrate and thrive on nepotism. Bright, talented hardworking law-abiding people end up nowhere. Connection is the key word that locks and unlocks doors in the echelons of power. It would make an interesting study if someone looks into the elite’s networking. It is like a big clan where every body is either related by blood or marriage”, said a disillusioned public relation professional.

“You have no idea about the type of money they made from speculative businesses, type of leverage banks were allowed and profit they minted at the cost of depositors. There is a group of professionals who sit on all board of directors and award each other performance bonuses that run in millions over and above the hefty salaries they draw”, a high-ranking bureaucrat said when contacted in Islamabad.

“Look what brokers lobby is doing. They are demanding to put good money to provide cover for their questionable conduct. While the government is broke, and is not in a position to release committed funds for its own departments, said an analyst in Karachi.

In modern integrated economy, the loss of one sector snowballs in others, if not all other sectors. It would, therefore, not be wise to watch on and let a sector go down. If bailouts are necessary in a time of distress, some mechanism needs to be developed for sharing the gains with the society in better times. Besides, the opportunity cost of public money must also factor in when decisions are made to infuse funds to prop up private businesses.

The current world economic situation exposed the soft belly of what people thought to be an efficient, self-correcting and infallible financial market system. It is too early to predict what things would be like after the current phase. But reputed development economists expect states to focus on new regulations to discipline the financial markets.