Removed From Reality

Our honorable wheeler-dealer of a Finance Minister was quoted in a leading English-language daily today saying that given Pakistan’s large English speaking human resource pool it was to become a premier place for doing business. It’s ironic that he would make this statement two days after French naval technicians were blown up by a suicide bomber in the heart of the commercial center of Karachi. I don’t know if the Finance Minister is having trouble getting anybody white-skinned to come to Pakistan, but I know I certainly am. A German client has refused to show up for a scheduled meeting on the 12th of May; and now my Firm has to incur the expense of sending a team out to Dubai instead. I also don’t know if anybody in the Government is aware of the travel advisory that has gone out following these blasts where even the most hard-core investors are a tad scared! I suppose spending years in private banking servicing the Asif Zardari’s, the Omar Bongo’s, and the Raul Salinas’ of the world has given him the ability to make public statements with a poker face. He may be the King of the “pitch”, but he has fallen into the classic trap most people in Government fall into – they start believing their “made-for-the-public” speeches and lose touch with reality. After all private banking is just another polite way of laundering serious amounts of serious dosh! The reality is that no Caucasian in his/her right (and white) mind is going to be coming to Pakistan anytime soon.

Being removed from reality is not just our Finance Minister’s forte these days; it seems to be in vogue wherever the Government is trying to operate. I say trying because that’s all it can do. In all the jargon we seem to forget simple things like the bottom line. What does an investor want from an investment? They want a return and they want to be alive to collect that return. At a recent investors’ conference, the international community had a very simple message for the Mandarins in Islamabad, and that was do not introduce new laws and incentives – just make sure the existing ones work, and guarantee our lives, investment, and property. Was anyone listening? Apparently not. Everyday we hear Ministers, Secretaries, and the hundreds of self-important desk jockeys in Islamabad prattle figures and numbers, which may look on paper, but they have little to do with the real world. Time for a reality check:

• PTCL has connected 500+ cities and villages to the Internet – simply not true. People are not connected to the Internet just because a press release says so. Ask people living in remote areas whether they can actually connect to the Internet, download their mail, or send/receive any kind of data. The sad answer is that 90% of them can’t.

• There has been a huge spike in foreign investment into the stock market, real estate, and other projects post-September 11 2001, due to the “forward thinking” policies of the present Government. Not true again. The spike has come as a direct result of the Department of Justice’s (in the United States) of bank accounts and funds belonging to Muslims. These funds belong to none other than dubious Pakistani individuals who have skimmed cash from the national exchequer over the last two decades. In order to escape questioning in the US, they have brought their cash to the only safe place they know – Pakistan. The current SECP rules make it extremely easy for any individual to “cleanse” their money – ask your local tax lawyer and he/she will tell you the same. So at the end of the day even if they lose 30% on their “investment”, these individuals really don’t care, as it wasn’t their money to begin with! Like they say – Pakistan is the easiest place in the world to make money in because you just have to know whom to pay off and where.

• The Bureaucracy has been Overhauled and cleaned up – If there ever was a bad joke this has to be it. The bureaucracy is as corrupt and inefficient as it always has been. From the poor traffic cop on the street to middle ranking officers in the administration, the payoffs are still being made, and inefficiencies still exist. The counter argument is always that reforms take time. If they take time then what are the Army officers in the bureaucracy doing? From what I’ve seen personally I would say they’re doing what their civilian cousins have been doing for decades – building their “retirement” funds.

• Appointments are Being Made on Merit – Another gaff courtesy of the spin-doctors in the Government who apparently think the rest of the country is made up of lobotomized morons. It seems that the only merit one needs to have to be appointed anywhere in the Government is, a) be an army officer, b) be a retired army officer, c) be related in some way to the good General or be an old college friend, d) be an army officer, or e) be related to someone who’s related to the good General! If this isn’t true can someone tell me what value a General from the Signals Corps brings to the premier telecom regulatory authority in the country among others? Or what an army officer brings to the table when he heads up WAPDA? Running a country or important institutions that are vital to the country are not anything like administrating a brigade or a division – they need to be run by professionals who understand the intricacies of such organizations and sectors; not by people who are more comfortable with drilling their troops along the Ravi.

• This is a Business Friendly Government – I don’t know which businesses they’re talking about, and maybe they are; but I just wouldn’t know the difference, as I’ve never done any business in other regimes. All I do know is that at every level, the job of the Government is to make you ask yourself why you’re evening doing any business here. During the course of the last two years I’ve encountered around two dozen different departments, and I have nothing but the worst to say about 95% of them. A small example of Government stupidity and incompetence can be found at the Export Promotion Board. Having registered a software concern with the EPB in Karachi, a friend and myself are in the process of registering a buying house in Lahore. We registered the Company, acquired a National Tax Number (after enough hassle to cause a minor stroke), set up a bank account, and almost cruised through the EPB until an uber-bureaucrat, Director General Tariq Puri, decided that my identity card wasn’t good enough as it was copy. This gentleman was told that the ID card was a validated copy and was good enough to acquire two passports, set up bank accounts, register companies, get a driving license, pay TAXES to the Government, and do everything that needs an ID card! Yet this gentleman was unmoved, and now an inquiry is being launched into the matter. Here I am a small entrepreneur who wants nothing from the EPB but a registration number so we can start doing business; not a 3 crore loan, and there are so many problems with something so simple! So where’s the business and where’s the friendly? I strongly stand by the belief that when the Government manages to involve itself in something it is a sure recipe for disaster.

To be fair there are individuals and officials one meets once in a long while who strike one as professional, imaginative, and have the ability to do things that this country needs done, but again they are a small minority who battle the odds – their incompetent contemporaries, their idiotic superiors, and an arcane set of rules and regulations – yet they stick it out. These people are a liability for those around them because they don’t take bribes, and usually find themselves sent off to remote and unprofitable departments so they don’t cause a break in the gravy train. My sympathies are with them. At the same time the need of the day is not to create more departments and bureaucracy, but to work with the private sector to improve the existing infrastructure with the goal of facilitating and not debilitating. It will take more than a few well-heeled top guns to turn things around in our country – incompetent officers need to be kicked out just as they would in the private sector and good brains need to be elevated in the middle management and compensated according to merit – real merit and not what’s going on these days.