Not a dooms day scenario:
Every country, every person has been touched by novel coronavirus. Covid-19 has become a household name. The world has never before seen such a standstill, making the earth vibrate less. The fast track spreading of a viral infection in a very short period of time has taken toll East to West/North to South. Every country was hit by economic crisis due to a creature that is 30 million times smaller than me. Yet it has played havoc. No A-bomb no laser-bomb no precision cruise torpedo can kill this silent serial killer.
But like other times of natural calamities the life needs to go on. We need to come together to rejuvenate the economy with a strategy for a faster recovery after this 2020 grand economic meltdown. Get people to work places, so that livelihood becomes a norm rather more. Not one Einstein will be able to solve the pertaining issues because the problem is complex. People who have experience in ‘crisis management’ need to come forward to beat the beast. Post Covid-19 the CEOs, Chairpersons, Directors, owners, vendors and alike will be battling the powerful impact in the Board rooms and court rooms for months to come. Once matters get settled in the board rooms and barrage breaking of court cases – then what is next; Exit to Exchanges to Expansion. Covid-19 has changed human behavior and mind sets. The consumer and organizational behavior, economies, supply demand, regulatory regimes and policy making have changed. But above all the social systems will never be the same. Social-distance coined recently perhaps will stay for long. The text book of economics, marketing, sales and law shall all need to be re-written. In fact, the now ex-MBA curricula is out of the window to give room for a new one. Employee motivation and concentration stands altered due to Covid-19, which would be the foremost and difficult challenges of the survived industry. Paradigm shift of the management tectonic plates has already happened. The after-shocks of Covid-19 will continue for decades to come. Risk managers will take a new look at the projects. Private sector will stash cash for a year or so before confidence building takes effect because of the fear of return of the virus.
For some, the trillion package from the present government could be just a cylinder of oxygen upto the trauma center, truly the situation is‘delay of carnage’ in waiting. Some patch work is already taken effect, such as deferred payment of bills for some sectors of the economy, which is need of the hour but the same society will have to pay the price of it.
WHO to take the lead in restoring normalcy in business sector?
Needless to say, the government will have to lead in these times of depression, both economic and psychological. The confidence of private investors stands deeply shaken, if not shattered. The government should not wait for the private sector to take the lead. Whether it was the 1929 Depression, 1971 Debacle, 1973 Energy crisis, 2007 Housing mortgage collapse or alike the world came out of it somehow but the government taking ‘lead. If one has to choose between the public and private sectors to take the lead; obvious choice is the public sector; as the private sector is helpless and bruised deeply. There could be a lag of 2 to 3 years before the private sector rejuvenates. Therefore, public sector needs to come forward immediately.
The government needs to device damage control strategy during Covid-19 in all sectors of the economy. And, come September the government needs to launch its “Saturn V” strategy post Covid-19. The only entity in the present setup that can launch this 37 million horse power thrust for Pakistan is the Planning Commission. The Ministry is called Planning, Development and Special Reforms. It is need of the hour that it commensurate with its name ‘Special Reforms’. It has massive information and data with its own computer center, in addition to the largest diversified pool of intelligentsia and analysts. It has the office of Chief Economist, in addition to PIDE, its computer set up and 11 Members; top class thinkers. It has developed numerous 5-Year Plans, Annual Plans and Visions. With the aforementioned strengths it is the best suited organization to get Pakistan on road to grand recovery.
The government needs to take following steps now for post Covid-19 trauma for ease of business in the public and private sector:
- Planning Commission be mandated to develop PCP strategy by end-May 2020 with KPIs and Timelines to be followed by the line ministries and their sub-ordinate departments.
- Monetary Policy Rate (MPR) needs to be brought down to 2% immediately. Even the public sector companies will be shy off from assisting the government with the revival if the interest rate stand so high.Any incentive or action of the government would be a still born if MPR is not brought to 2%.
- Government needs to transfer Sarmaya Pakistan Ltd (SPL) from Finance Division to the Ministry of Industries and make it a center piece of public sector revival.
- Pakistan Corporate Restructuring Company Ltd (PCRCL) is a new start-up and a great initiative by the ten top banks. The government and banks need to give it full support.
- National Information Technology Board (NITB) need to be strengthened overnight to bring paradigm change in the IT sector to match the new demands of the market.
- Planning Commission, SPL, PCRCL & NITB are going to be four main foundation pillars of a strong Pakistan post Covid-19.
- Federal and provincial governments need to change the Rules of Business to reduce the powers of the Establishment Division and line ministries pertaining to the public sector enterprises (PSE). Let the public sector emulate the private sector.
- All polices to be re-visited on fast track basis to make these ‘compliance based’ and away from ‘approval basis’.
- New policies to be invoked, such as BioFuel (biodiesel, ethanol), biogas, EV, industrial parks, imports etc.
- SECP, SBP, FBR, PPRA, Provincial Procurement Rules need major amendments through Planning Commission advice. The presentrules are major impediments towards business development and indigenization.
- OGRA, NEPRA and PTA Rules and Fee structure needs urgent revision to make life easier for the business community.
- PPRA Rules may not apply to PSEs when they are manufacturing plant, equipment and machinery or providing services to private sector entities.
- Pakistan Stock Exchange PSE, NIFT and CDC needs to change Rules for ease of business.
- Government needs to do what FATF needs and not be holier than the pope.
- Pakistan Engineering Council PEC Rules for Consultancy (SRO809)(I)/8, Guidelines For New, Renewal And Upgradation Of Constructors/ Operators License, 2017andBye Laws SRO 1210(I)/76 needs major overhaul to create ease of business.
- Parliament/High Courts need to pass a resolution/order that ‘the Rules’ cannot be notified by the department/organization itself without public hearing. Present, rules are major obstacles to business.
- Banking and non-banking sectors needs to be liberalized. NBFCs and Easy Paisa alike need to play a major role in risk analysis and risk taking. The banks need to build up their investment analysis capacities otherwise dooms day scenario would be in making.
- A large number of LSM may take time to adjust themselves to the new world order. However, the start-ups will be the front runners but under present Rules of SECP, SBP, FBR and banks a new start up is next to impossible.
- Government has already announced incentives for the Construction sector; similar incentives need to be given to renewable/alternate energy, power, oil, gas, LPG, LNG, coal production, EV, Solar, Wind and manufacturing sectors.
- Electronic industry and universities failed to come for rescue during the Covid-19 crisis. Both could not develop much needed Ventilators, a simple technology. PDMA had to import from China spending precious foreign exchange in hundreds of million. The Planning Commission needs to perform a gap analysis in each industry to improve indigenization.
The government would need to have multi-tasking on fast track basis; business as usual would not work. The government needs to get people from the corporate world to get Pakistan up and running. It may not wait for the private sector to take the lead.