IT is not possible to keep businesses insulated from the risks of volatility. As such, it is not surprising that Covid-induced intermittent restrictions, a series of horrific criminal incidents, and the likely pitfalls of a restive Afghanistan together weigh heavy on business sentiments.

“We hope and pray for a better future, but for now the economic recovery in Pakistan appears more susceptible to downside risks,” remarked a top tycoon suspecting that the government’s 4-5 per cent GDP growth projection for 2021-22 may not be actualised. “We will be lucky if somehow we manage to hit the 2020-21 growth level of 3.9pc,” he said while keeping his fingers crossed.

As far as Covid is concerned, despite the notoriety of the Delta variant, the elite class is less anxious than it was last year. “The whole world is together on this issue. Global bodies are ready to pool resources to deal with an emergency in any corner of the world,” said an executive of a multinational company. Besides, the government has earned the trust of the corporate sector over the management of the health emergency. “The pandemic will run its course. The world has already travelled a distance collaborating closely and is better equipped to balance the lives-versus-livelihood conundrum,” he added.

Keeping downside risks in sight some businesses suspect the government’s 4-5 per cent GDP growth projection for 2021-22 may not be actualised.

Tycoons fear blowback from their Western client base if Pakistan’s perception as being an insecure place for women and minorities gains any further momentum. “The world is becoming increasingly intolerant towards nations perceived to be systematically brutal towards the fairer gender,” a leader worried over what he called “the social media outburst” on the murder of Noor Muqadam in Islamabad said. “It is just a matter of time. No company in this day and age affords to be seen as associated with real or perceived tyrants. A case such as this can potentially entail a heavy economic cost to the country. It can ruin trade markets and repel potential foreign investors,” he feared.

On the matter of Afghanistan, the opinion stands divided. Top business bodies based in Punjab and Sindh may not be fully convinced, but they do peddle the line of the influential quarters. They foresee a friendlier government after the dust settles in Afghanistan. They are told that the Taliban have transformed. Instead of having a militarised mindset, they are said to be inclined towards respecting the global norms of civil governance in return for the international support they need for survival. The concerns of the business class are rooted in the interim phase of violent adjustments before stability is achieved in Afghanistan.

Ehsan Malik, CEO of the Pakistan Business Council, expressed concerns over the possible spill-over of the conflict. “Improvement in security conditions in the last few years ranks foremost amongst the positive factors. It has also led to improvement in travel advisories by key trading and investment partners. Anything that threatens safety and security of people and goods is detrimental to both domestic and foreign trade and can be a setback to economic recovery,” he said in his comments mailed to Dawn which mentioned Afghanistan as one factor that can rattle peace.

“The Pakistan government, along with other Afghanistan’s neighbours, including China, is trying to proactively manage a peaceful transition to avoid spill-over into their respective territories,” he said while confirming that the more exposed businesses were engaged in scenario planning to minimise any downside. “It is important than ever before for the government and the business to work together to promote sustainable growth through predictable and consistent policies,” he concluded.

In contrast, Asad Ali Shah, a known commentator on national issues, can be taken as the voice of hope. “I do not see doom and gloom scenario ahead. On the contrary, I foresee some negotiated settlement and some form of a coalition government, as it suits interest of all parties, especially Taliban. So it will be an improvement over the current set up” he told Dawn.

On their part, the trade bodies and business leaders based in Khyber Pakhtunkhwa and Balochistan dread the prospect of a re-emergence of the Taliban, who, they believe, have gained serious energy by the American exit after 20 long years; a perceived victory for them.

“Please don’t be deluded by the mannerism of Taliban leaders participating at global forums. Taliban’s rank and file remain the same. Ask anyone remotely familiar with Afghan affairs and you will get to hear horror stories related to the past couple of months. Thus far, they are in remote, rural Afghanistan, but as soon as they enter the cities, the world would realise how crude, conservative and trigger-happy they are.

“We refuse to learn from history. We have paid a high price earlier and only a miracle can save us in the period ahead if we stick to a narrative anchored in the past and refuse to see the obvious,” an informed watcher told Dawn from Peshawar.

Taking the sentiment forward, an analyst said: “The divide over Afghanistan is deep. The chasm is almost unbridgeable. It spells trouble even before the actual cost of Afghan spill-over starts draining the economy.”

Pakistan and landlocked Afghanistan share a long porous border and enjoy historical ties. The volume of trade between the two has shrunk over the past decade. Pakistan’s exports have dropped to less than half of what it was 10 years back. In 2010-11, Pakistan exported $2.7 billion worth of merchandise to Afghanistan that slid to $1.7bn by 2020-21.

Rashid Amjad, an economist with a keen eye on national affairs, shared his view in a mail from Geneva. “The Soviet invasion of Afghanistan in 1979, despite its short-term gains to the Zia regime, was a turning point in Pakistan’s development trajectory. It deprived the country of a chance to capitalise on globalisation that accelerated growth first in South East Asia, and later in China and India. It may be recalled that Pakistan was more open and globalised than India before the Zia regime.

“History repeated itself post-9/11 during the Musharraf rule that gained from siding with the US, but the long-term human and economic costs of his policies far outweighed the benefits. Our experience teaches us that a civil war in neighbouring Afghanistan and its spill-over effects will hurt Pakistan’s economy.

“Still, in my view, the current situation is more preferable for both Afghanistan and Pakistan. This is not the 1990s and the Afghan people and the Taliban have changed. In the end, it is up to the Afghan people to decide their future, and no external power can decide it for them. Pakistan seems to be clear on this as it shared the sufferings of Afghanistan over the past 42 years,” he concluded.

Published in Dawn, The Business and Finance Weekly, August 1st, 2021