Amidst heated legal and political wranglings, Pakistan has been sinking deeper into economic quicksand every day. Backbreaking inflation and the fast-eroding currency value indicate the direction the country is headed.

Prime Minister Shehbaz’s government seems lost, flip-flopping as if waiting for divine help without a structured viable plan. Suffering people watched on helplessly. However, the comportment of the business class, which enjoys more than its fair share in the nation’s fortunes, is intriguing. Diverging in their view over the details, the class is unified in insulating themselves from the blame of making the crisis; instead, they project themselves as victims in double trouble.

“The diving economy has already mounted great stress on businesses. On top of this, the government and donors have been demanding a bigger chunk of our flesh. They abruptly withdrew concessions and hiked taxes. How is this fair? Such policies will hurt us but also uproot our workers and their dependents,” commented a Karachi tycoon.

Sharing views on what led to the current impasse, the majority of businessmen approached blamed one or the other set of politicians, depending on their political bend. Others spoke against the bureaucracy and the judiciary. Some thought the media was the real culprit as it amplified problems. There were a few who suggested a martial option to fix the economy as they believed only a strong absolutist leader can deliver in a country as troubled as ours.

For some educated new-generation corporate leaders, the current crisis was inevitable as the archaic economic framework has been obstructing the natural growth pace based on the country’s endowments and potential.

The evidence of colluding with regressive elements and the emergence of business empires over the past 40 years hold testimony to the fact that business houses are amongst the major beneficiaries of the fractured system

“Besides other factors, the current chaos signalled that the old structures are falling apart, offering a rare opportunity to build a new balanced, meritorious, impersonal and more resilient modern foundation of economic development. The framework based on the culture of extraction and patronage that has held Pakistan’s growth potential hostage for decades is eroding. The current transformation process is painful but necessary,” said a thinking head of the business community.

The trouble with this line of thinking was the presumption that the business community of Pakistan both wanted and needed the change. The evidence of colluding with regressive elements and the emergence of business empires over the past 40 years hold testimony to the fact that business houses are amongst the major beneficiaries of the fractured system.

The recent book of researcher Rosita Armytage, Big Capital in an Unequal World and the Micropolitics of Wealth in Pakistan, shed new light on the machinations of the elite nexus of which the business class is a leading component.

This intertwined exclusive class, leveraging elite schools and social clubs’ networks, might have rendered the system hollow, but there is little historical evidence to prove the perception that they command decisive power in Pakistan. On the other hand, comparatively low-net-worth bureaucrats and military men are definitely more powerful and socially privileged.

Expanding on the theme, Saqib H Shirazi, President and CEO, Atlas Honda, who represented his class at multiple forums, said, “With the economy under unprecedented pressure, days of exemptions and subsidies are over. The disruption being caused must translate into the creation of a competitive environment, seen to be equitable and fair. Unfortunately, rather than internal, external stakeholders are now asking these questions, urging action and corrective policies.”

His message on behalf of the corporate sector, represented by the Pakistan Business Council, Overseas Chamber of Commerce and Industry, American Business Council, to his own community and the policymakers was: “We call on all colleagues to judiciously pay their due share of taxes, contribute generously to corporate social responsibility projects and most importantly protect jobs and livelihoods.

“We demand that the government encourages competitiveness rather than extends protection. Currently, the formal segment contributes disproportionately to the domestic revenue base, albeit with a limited export focus. Exporters often end up paying only indirect taxes. The imbalance needs to be corrected.”

“The formal sector (big or small) must be distinguished from other less productive fast-growing economic agents. Real estate, retail and transport sectors’ contribution to revenue generation is less comparatively, but their influence has grown disproportionately in and outside the parliament.

“With a population of 230 million, agriculture remains the number one employer. The dream for every farmer is to have a retail source of income as a safety net and diversification. However, the country can’t simply become a nation of shopkeepers going forward. Policies must foster a competitive manufacturing sector, a thriving IT environment and new economy job opportunities to sustain the country’s population and, in the process, build up the state exchequer and foreign reserves.”

Majyd Aziz, President, Global Compact Network Pakistan, agreed with the writer Rosita Armytage that the power of the close-knit nexus of the elite in the country has managed to tilt policies and resource allocations to suit their interests. “The top’ one per cent group’ has become a juggernaut, immune to hassles and difficulties that others face”. He attributed the current crisis also to the ‘Little Caesars’ of Pakistan’s business world.

The writer can be reached at asubohi@hotmail.com

Published in Dawn, The Business and Finance Weekly, March 6th, 2023