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Published 26 Feb, 2018 07:19am

Businesses acquire a taste for democracy

CORPORATE Pakistan wants to believe that the current political turmoil is a normal pre-polls phase that will pass and it will be business as usual after the upcoming elections. However, the nervousness simmering beneath the surface belies their trust on the belief.

The private sector actually dreads slipping back to the 1990s tumultuous phase when five governments came to power in a short period of 10 years. They think the current political crisis can actually morph into a major breakdown, forcing the country to abort the democratic project yet again. It can stall investment, anger trade partners and widen the wedge between the government and the public.

Business leaders resent the current environment of confrontation in the country. Speaking privately, they were critical of the judiciary and blame the anti-democratic forces for disrupting an economic revival phase.

Businessmen resent a ‘manufactured’ political chaos and their bitterness towards the civilian leadership seems to have somewhat melted

They fear that the irresponsible, adventurous stance of the power wielders may further compromise the position of Pakistan to deal with mounting economic challenges and push the country towards a full-blown crisis.

They regret the paralysis in Islamabad at a time when the economy needs attention and action, as it is set to take off after a long time on the back of better logistics, improved energy situation and the China-Pakistan Economic Corridor.

Most of them say they do not want to ride against the democratic tide this time around, as now they understand the value of a democratic order for a stable, prosperous Pakistan.

Background conversations with star businessmen of the country reflect a change in the outlook of the community that was known to detest democracy.

Their bitterness towards the political leadership — earlier referred to as pigmies, nincompoop and corrupt to the core — seems to have somewhat melted. Many were still against PPP, but were soft on PTI and PML-N.

The perception of disappointment with PML-N that dominated their narrative until late last year has been replaced by their acknowledgement of the distance covered on the path to progress under the current government’s rule. They consider the “targeting” of PML-N leadership unfair.

When their attention was drawn to external-front woes — ballooning twin deficits and an impending balance-of-payments crisis — they turned the argument around. The situation, they say, has deteriorated because of the “manufactured political chaos”.

A survey conducted across Pakistan in October by the Overseas Investors Chamber of Commerce and Industry to gauge investor sentiment confirmed that despite all the political theatrics and noise, businesses were looking at the future with more optimism.

The survey, whose results were announced in November, found that “79 per cent of the respondents believe that there are less threats to business environment and growth today and 72pc have indicated that growth opportunities for their respective business entities have increased compared to 2013”.

A former finance minister concurs. “For the first time there appears to be a genuine concern in the elite business circles for the democratic project,” he says. “They have realised that the future of this country is beholden to the paradigm of a security state. They are ready to break free of the old mindset and throw their weight behind the ousted prime minister.”

He advises relevant circles to apply restraint, stop dangerous games, hold timely elections and transfer power under the law to the majority party.

Jon Scheiber, CEO and partner at Tundra Fonder, a Swedish asset management company operating in Pakistan since 2014, was in Karachi last week. He was visiting with a five-member delegation of investors.

In an exclusive interview with Dawn, he was upbeat about Pakistan and its future. He said the return on investment at the Pakistan Stock Exchange may have moderated last year, but it has not discouraged him, as Pakistan has earned a place on investors’ map owing to the strength of its economic credentials.

He said that besides Chinese, he noticed many more Westerns businessmen in Pakistan during his stay here. “I wish the political dust settles quickly to allow the leadership to resolve economic tangles and realise the immense growth potential,” he remarked.

A market watcher, who runs an investment advisory consultancy, is confident that the worst is over. “How long can aspiration of the people of the mainland Punjab be ignored? Mark my words, elections will be held, power will be transferred and normalcy will be restored before the end of the year. What does it matters if Nawaz or Shehbaz Sharif ends up at the helm?” he asserts.

Another businessman says: “If we believe that the situation will soon revert back to normal, it is not surprising. Such an outcome is plausible, given that the market has endured several bursts of negative news in the past.”

Salim Raza, a leader of the private sector and a former governor of the State Bank of Pakistan, is cautious. Responding to a Dawn query, he forwarded a measured response: “Business seeks predictability above all. Uncertainty or short-term governance arrangements can lead to the postponement of business decisions.”

Published in Dawn, The Business and Finance Weekly, February 26th, 2018

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