Resetting economic governance

Business Recorder

3 days ago

We have lost count of experiments conducted to resolve challenges confronted by our economy. However, except interludes of relative stability, the economy has kept faltering with breathing space provided by IMF bailouts, rollovers by friendly countries and expatriate Pakistanis' remittances.
While political disruptions and policy shocks contributed to the snowballing of the economic disorder, civil bureaucracy remained ill-equipped to deal with the decline. On their part, technocrats overtime fell in line with their employers in civil bureaucracy.
Surprisingly, despite being the most relevant stakeholder the businessmen were not enabled to take centre stage to play substantive role in economic governance or to sway the policies to economy's favour. The corporate executives have been part of the Cabinet, but they lose their independent voice once they join the ruling club. Their recommendations are not incorporated in a way they would desire in the final decisions, legislations, and policies. Likewise, they are hardly taken on board on economic matters linked to strategic and foreign policy issues.
Resultantly, the decisions pertaining to geopolitical dynamics are aligned more with political objectives than long-term economic benefits. An example of this approach is Pakistan's insignificant trade with its neighbouring countries.
Issues and controversies that crop up every now and then between businessmen and the government indicate ineffectiveness of former's consultative role as well as their inability to wield real influence in matters having substantial impact on the economy. No wonder policymakers' chronic neglect of corporate sector's policy inputs has exacerbated economic deterioration.
The economic governance status quo chose to disregard the counsels of the entrepreneurs, despite the fact that alongside the establishment and civil society businessmen have kept the country afloat in times of peace and national emergencies.
As heads of organizations which create wealth, generate employment, deposit mammoth taxes, partner with government in social development and step forward in national upheavals, business leaders have a strong and legitimate right to be embedded into national economic decision-making as strategic partners.
The concept of privatisation is premised on private sector's proven ability to better able to govern. This should also hold true in the case of national economic governance as the economy is led by entrepreneurs who should not merely be considered as business managers but as economic sages capable of coming up with viable strategies for economic recovery and tweaking these modalities all the way in their successful implementation. The economies flourish when they function as enterprise and who could be more suitable to run them in this manner than the businessmen.
At the national level a civil-military hybrid format is in full throttle to plug in gaps in governance, official procedures, coordination, policy implementation and, above all, actualize difficult reforms.
The unprecedentedly close civil-military liaison has come forward to deal with these complex tasks as existential challenge after the country was pulled back from the brink. This template is explicitly manifest in the form of enthusiastic and happy coordination between political and military leaderships, fruitful military diplomacy and institutional collaboration in the shape of Special Investment Facilitation Council (SIFC).
While doubts surround the usefulness of the hybrid system in dealing with economic challenges, the businessmen continue to be on the blind spot of the government and the establishment. One only learns about business groups' separate interactions with the Prime Minister and the Chief of Army Staff (now Field Marshal). Why not institutionalize these meetings into an apex level consultative and decision-making platform.
A tripartite civil-military-business model of economic governance could be created in which the corporate executives have a robust role in making recommendations with the understanding that these will be endorsed and implemented by the government. Corporate representatives may veto proposals which can adversely impact on the businesses and economic health.
The implementation of policy recommendations may be monitored by the establishment after finding viable ways out of political expediencies. In the absence of such a body it took the government a long time before realizing to insulate the business community from National Accountability Bureau. The latest such organization is Federal Board of Revenue, which has run into controversies with the business community.
The civil-military collaborative model, in the context of whole-of-government approach, provides a good ground to engage corporate leaders as the major players in economic revival.
The suggested high level body could function as an expanded version of SIFC in a manner that political and military leaderships interact with eminent entrepreneurs to seek workable solutions of issues relating to regulations, taxes, energy pricing, monetary and fiscal policies, trade and investment, privatization, economic legislation, corporate laws, budgetary proposals, strategic issues linked to economy and above all the painful reforms. This triangular body, shielded from political disruptions and bureaucratic resistance, could operate independently for consistent and private-sector driven policies on the principle of economic pragmatism.
The proposal might sound radical, but in extraordinary situations nations resort to non-traditional remedies. Since we have exhausted conventional governance mechanisms without achieving the desired outcome, the proposal to accord lead role to entrepreneurs as members of national economic team should be seen as a plausible measure with a sure promise of success.
Pakistan has yet to fully come out of a precarious economic situation. The fragile economic scenario has been rendered more vulnerable by the Indian aggression and other multiple security threats. In these unusual circumstances, one key step must be to enlist business leaders, whom Prime Minister Shehbaz Sharif hailed as national heroes, in economic governance to salvage the economy.
Empowering local businessmen in national decision-making will also lead to a huge increase in the ease of doing business, presenting a strong stimulus for attracting foreign investment.
In a write-up for a newspaper Ahsan Iqbal, Federal Minister for Planning, Development and Special Initiatives, stated that 'expansion of the private sector and devolution of multiple responsibilities to provinces have made policymaking a multi-actor exercise with rising complexity.'
Implicit in this statement is the important role of business sector in proposing strategies and modalities to the government. The economic transformation plan of the government could take off provided, among other things, the business leaders are irreversibly co-opted by the government in economic governance and decision-making.
Copyright Business Recorder, 2025