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Br Research

Business Recorder

Published Date: Dec 9, 2016

On business-government dialogue

Ideally, dialogue between government and business should advance mutual interests. But in Pakistan’s case, despite existence of several fora for business-government interactions, both sides have gotten little done and remain mostly detached and aloof. The interaction remains largely informal in nature, and where it is formal, it is not inclusive on either side.

At SDPI’s annual moot in Islamabad yesterday, a panel titled "Emerging Methods in Policy Engagement and Public-Private Dialogue" sought to address how business can better communicate economic reforms to those in power.

The panellists, which included representatives from business community, government and third sector, provided numerous insights. But the discussion didn’t have much to offer on development of a robust feedback mechanism that can channel businesss ideas and response to government policies.

But an efficient feedback mechanism, if it becomes available some day, won’t cut it. It is simply a channel, or a pipe, inadequate on its own. What flows through that pipe – the nature and quality of business-government discussions – is important, too.

Observers of Pakistan’s economy will agree that both business and government want different things from their dialogue. Government, which is rarely seen not caving in to short-term-ism, looks keener to balance its books. Businesses, that are those who are able to have their voices heard in public and in private, want to preserve and expand their economic rents.

And in the odd case when both government and business are seen on the same page, they are found reading from the wrong script. Pakistan’s growing youth unemployment, labour economists warn, is an issue that is simmering right now but will become catastrophic if attention is not paid to it.

But there is little heard about it from either the government or the business side, as to what they have been or will be doing to expedite job-creation in this country. Pakistan’s circumstances demand that job-creation is placed front and centre of the economic agenda. The government must adjust its policies to facilitate domestic investment and become a friend of the job-creator.

Of course, talking about taxes, utilities tariffs and business reforms is important, as they set the stage for new investments. But it is noticed that those issues have become the end in themselves, when they should simply be the means toward the end of creating productive jobs.

Besides the nature of discussion, the other aspect is the quality of business-government discourse. But informed discussion is found wanting. If it is to change, both government and business must change their respective styles. On the supply-side, the government must be transparent about all its business interactions, share data with private sector, unify its various platforms that interact with business, and adopt a more consultative policymaking style.

On the demand-side, businesses will do well to prefer rationality over rhetoric. To bring rigor to their arguments, they must build their research capacity. Also, they should become more inclusive. They should bring consensus within their own chambers and associations and represent a broad spectrum of business interests in their geographic and/or product markets.

Realistically, all of this stuff sounds hopeful, considering the myriad conflicts of interests nurtured by Pakistan’s ruling parties and the rent-seeking behaviour of business. But it cannot go on like that. Both business and government must understand that without adequate job-creation, their mutually-beneficial system of patronage-based power may not stand for long.