"Corporate Pakistan fears political instability that would create uncertainty on the top of other grave challenges." — File Photo

A DISTURBED private sector sees the political developments over the past week and the assassination of a successful businessman and Punjab Governor as “a bad omen for business.”

Corporate Pakistan fears political instability that would create uncertainty on the top of other grave challenges, said to be squeezing profit margins and threatening business viability in a highly competitive global environment.

Multinational executives are worried over the timing of current happenings, when their parent companies are in the process of finalising their strategy for overseas operations. They said the timing was critical as the situation in Pakistan could lead to chopping up of their share of the business.

The exit of the MQM and Jamiat Ulema-i- Islam (F) from the government had weakened the ruling coalition.

While the PPP leadership managed on Friday a pullback from the brink by persuading MQM to return to the treasury benches, the MQM has refused to join the cabinet. This indicates that some issues are yet to be resolved.

The assassination of Governor Salman Taseer has reminded the business community of the gravity of security situation in a polarised society that clouds the prospects of closer ties with international business partners.

While some businessmen aired extreme views, generally the private sector aspired to see Gilani government and other political parties to handle the situation with responsibility, shun confrontational politics and restore peace and stability so as to be able to quickly redirect attention towards the economy and its challenges.

They believed the situation has put to test not just the political acumen of the ruling Pakistan People Party but the democratic system that is supposed to be superior to authoritarian rule because of its flexibility to reconcile conflicting interests through dialogue within the constitutional framework.

An informal survey by Dawn based on opinions of representatives of big business, multinationals, manufacturers, traders, medium and small businesses reaffirmed that (despite divergences on a variety of issues), views of different segments of business community converged over peaceful resolution of political conflicts and to let the government complete its mandated term. They also stressed the need for a consensus strategy to curb violence and intolerance.

The level of anxiety was higher in big business and in the hierarchy of multinationals with bigger capital stakes and greater international exposure. The manufacturing class seemed more depressed over the unfolding events as compared to those primarily involved in trade. The medium-sized businessmen were vocal but their views were comparatively politicised.

The small business was not as forthcoming in its views, partly as it felt that the situation was tough for it either way and partly because of its preoccupation with the nitty gritty of its work to spare time for forming an opinion on macro issues.

To exporters and multinationals, the killing of the Punjab Governor was more damaging than the political bickering that they treated ‘nothing out of ordinary’ as long as it does not leads to a major upheaval.

The businessmen from Punjab expressed anger and anguish with the current crop of political leaders irrespective of their party affiliations. They found them to be too immature to take head on challenges the country is facing. The business leaders of Karachi presented a guarded view and sounded more scared than angry at the growing MQM/PPP confrontation that could drag the city back to the tragic phase of violent protests, strikes and surge in demand for protection money from multiple local gangs and groups.

“I hope that the situation normalises soon. The private sector can work wonders if preconditions are met: law and order, infrastructure, continuity of economic policies and political stability”, Majyd Aziz, a senior business leader said.

“Chickens are coming home to roost”, he commented over the violent incident at Islamabad.

The gentleman agreed that the private sector has not been able to offer indigenous solution to the country’s problems. “We like to fly solo and have yet to learn to value institutions and institutional response.”

S M Munir, a leading leader sounded pessimistic. “The evolving situation will de-facilitate business activity, already in the grip of a trend towards deindustrialisation.”

“Time demands that all politicians set aside their differences and unite to revive economy”.

Yasin Siddiqui, another businessman said, people have put their business plan on hold. Unpredictability has hit business that can only compete on the strength of better planning, he said. Tariq Wajid, President Pharma Bureau, termed the situation very damaging for the economy. “I do not see business trip to Pakistan by potential investors and senior business executives at least for the next six months after the daylight murder of the Governor”.

“It is not a happy start of the year 2011. It has jolted my confidence on the political system and its ability to deliver. I find democracy ill-suited to our fragmented society, torn apart from perceivable divides, rife with corruption, with decaying institutions ( far from being developed) and the teeming millions aspiring to be taken care of, without moving a limb”, a tycoon in Karachi told Dawn in confidence.

“I have no love for men in Khaki but the fact of the matter is that my interests are better served under an authoritarian rule. Nothing proves a point better than hard facts. The fact is that Pakistan experienced higher GDP growth under dictatorship, in my view also because of the perception of stability that we lose as soon as political governments assume power”, he added.