Syed Muhammad Shabbar Zaidi
Zaidi stated that Pakistan is one of the few countries in the world to give full protection to foreign investment, but he made an important distinction, that these government policies, in principle accepted and promoted private sector economic development but have been unsuccessful in creating a ‘vibrant environment’. He mentioned a host of problems and issues facing the ‘organized’ private sector, leading to a downward trend of un-corporatization which includes: 1. Uneven playing field against the
unorganized sector. 2. Frequent unnecessary amendments in trade, monetary and fiscal policies. 3. Non-availability of trained human capital and complete absence of government support and role in this field. 4. Bureaucratic and political interference in regulatory authorities like OGRA, PEMRA, SECP, SBP, FBR, etc.
He denounced the protectionism against creating competitiveness and suggested the use of local strengths. “We must address issues encouraging un-corporatization such as high tax rates, excessive, cumbersome and operationally ineffective regulations, labour levies and ‘incremental cost of doing business’, lack of “Insolvency” laws and social taboos against business failures and foreign exchange regime operating without incentives for corporate sector.
Zaidi suggested detailed measures for improving investor confidence through consistent economic policies, political and social stability and sustained high growth. There is a need to reverse the order of policies some of which affect the private sector adversely like high interest rates, 30 percent tax on energy, improved infrastructure, security, etc.
On the way forward, Shabbar Zaidi suggested the following: 1. Medium and long-term ‘political consensus’ on fundamental economic policies. 2. Economic policy focused on poverty alleviation, full employment and creating a sustainable manufacturing sector and public social security network. 3. Greater government involvement in providing education, health, infrastructure and security. 4. Government focus on providing support mechanism in supply of energy and logistics. 5. Minimize regulatory framework. 6. Decentralization of Tax Collection
System. 7. Investment on internal security. 8. Strongly empowered local Administration for big cities to help turn them into engines of ‘industrial’ growth. According to Zaidi, an ‘Organized Private Sector’ must operate independently, with a clear and crisp long-term economic vision as there is no alternative model