Details have begun emerging from a high-powered gathering where the Chief of Army Staff, General Asim Munir, met business and industry leaders in a marathon 5-hour meeting. Insider accounts lead one to conclude that the powers that be are envisioning a heavy-handed agenda to bring a failing economy off the ventilator. In what is being labelled a new ‘doctrine’ to revive Pakistan’s economy, conversations on a number of key matters took place, a significant chunk of which were dedicated to all matters economic. In his usual style, the Chief also quoted several Quranic verses to signal optimism and hope with regards to the country’s economic recovery.
General Bajwa: Business broker
‘Potential G20 economy…’
Insider accounts of the meeting confirmed that COAS General Asim Munir expressed optimism around Pakistan’s potential to become a G20 economy, because of its vast reserves of mineral and natural resources. The Chief reportedly pinned his hopes on the young demographic of Pakistan’s population: 65% of who are 30 or below, in leading the economic recovery.
Structural economic reform
The COAS reportedly emphasised the need for structural reform to make the economy work. Speaking about the need to tax the informal sector and eradicating any ‘grey’ zones, the Army Chief expressly pointed out that documentation of the economy was pivotal for widening the tax net and providing thrust for the economy.
According to attendees, the Chief also hinted towards a special task force being created for structural reforms in the Federal Board of Revenue for tax collection. On the all-important question of state-owned enterprises, COAS signalled toward privatisation of loss making state-owned entities as a matter under consideration.
It has also been claimed by insiders that a radical change to the minimum wage may be proposed soon. This could entail the minimum wage rising to 32,000 rupees a month in Punjab for starters. The COAS also called on the business community to give back to the community in form of fair wages and philanthropic activities.
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‘Blast, Bulldoze, Disregard…’
The defining theme of the high-profile gathering was an emphasis on the strategic role envisioned for the Special Investment Facilitation Council (SIFC). Rooted in a dire need for economic rejuvenation, the newly enacted body has been designed to strike a balance between military decision making and democratic governance to remove bureaucratic hurdles for attracting foreign direct investment. The SIFC has been termed pivotal for economic revival, and the aim, as confirmed by several attendees, is to ‘blast, bulldoze and disregard’ any and all obstacles in attracting foreign investment to Pakistan.
The military top brass aims to root out bureaucratic inefficiencies and red tape. The COAS is reportedly eying $100 billion of investment and foreign reserves under the SIFC initiative, but it remains unclear if a time horizon was offered for the rather ambitious target.
As part of the SIFC, there seems to be significant reliance placed on Middle Eastern countries. Although the Chief distanced himself from having any expertise on matters concerning the region, it is nonetheless reported that Saudi Arabian investment to the tune of $25 billion could reignite the economy.
An end to smuggling
The pertinent topic of sugar and dollar smuggling also came up, the halting of which is viewed as quintessential for economic revival. In response to a question, the Chief expressed a willingness to clamp down on smuggling by tightening porous borders.
Old wine in new bottles: Is the military prepared to make sacrifices?
As the military’s top brass presses for economic revival, one shudders to think if this is old wine in a new bottle. Not long ago, the Bajwa doctrine prioritised pivoting toward geoeconomics over geopolitics by reducing reliance on the age old policy of strategic depth. The end result was a failed model of hybrid governance and the ultimate failure to liberalise the trade regime with neighbouring countries.
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The Munir Doctrine, however, arrives at a time when Pakistan’s economy is on an unending downward spiral. Given the rupee’s free fall and backbreaking inflation, it is clear that sweeping reforms are required to fix the economy. While grandiose plans have been put forward, it is unquestionable that any meaningful reform would require the military to make monetary and most importantly, political concessions.
While the documentation of the informal economy is crucial to widen tax net, so is property taxation. It is no secret that rent-seeking industries, including real estate, benefit from low tax rates. The armed forces have themselves ventured into mega real estate schemes, notably Defence Housing Authority, but real reform would require taxing property aggressively and giving FBR the teeth to collect those taxes. Reducing electricity subsidies, negotiating pension schemes and limiting defence expenditure remain an important issue area where concessions from the military are required to allow for prudent fiscal resource allocation.
Similarly, political stability is centripetal for economic revival. The last decade can be characterised as one of sheer instability mainly due to the military’s constant meddling in political affairs, due to their penchant for uncontested control and power. It is therefore pertinent that a stable government is present to deliver on a transformative economic agenda, which would require distancing from Pakistan’s politics as usual. A hybrid model of governance, by design, is rigged with civil-military tensions. Take for example, the control of the China Pakistan Economic Corridor (CPEC), which ended up being a bone of contention between the then PML-N government and military. Combined ownership and direction of potential foreign direct investment will require an impeccable balance to be struck between the civilian government and military. Whether that’s possible remains to be seen.
SIFC and ‘red tape’
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The matter of foreign direct investment under the SIFC remains uncertain, not least because it is unclear the shape and form it arrives in. Investment in productive engines of the economy, mainly industrial manufacturing, will be critical for growth, but it is doubtful if major industrial manufacturing will seek to relocate to Pakistan, given concerns around rising extremism, political instability, regionally uncompetitive energy costs and limited infrastructure availability. It seems that there is some hope and optimism for significant investment from the Gulf Cooperation Council (GCC) and Saudi Arabia. The latter is also where 3-time ex-premier, Nawaz Sharif, spent a number of weeks, which can be seen in conjunction with the push to secure investment to shore up reserves and kickstart the economy. Once again, it is important to be sceptical of Saudi’s vision for Pakistan. Having pivoted away from geopolitics themselves, the Saudis are hurriedly liberalising their economy by playing hard and fast with established geopolitical alliances. Saudi Arabia’s reliance on Pakistan for defence is not as strategically valuable for the kingdom as it once was, therefore claims of a mega investment remain conjecture at best.
Furthermore, meaningful reform dictates ease of business for small business and empowering entrepreneurs, not just foreign investors. While the SIFC initiatives may cut out bureaucratic red tape for foreign investors, there remain small business owners who suffer from a host of regulatory requirements in registering and operating documented businesses. From operating corporate accounts to work related identification checks, a number of issues plague their ability to function efficiently. Any serious reform must treat ease of business as a goal itself.
September 5, 2023
Source: The Friday Times
Situationer: ‘Blast, bulldoze and disregard’
By Farrukh Saleem
To “bulldoze” is to use heavy machinery [a bulldozer, for instance] to clear path by physically pushing aside obstacles
By Farrukh SaleemSeptember 05, 2023
Rangers personnel stand guard outside Parliament. — AFP/File
Rangers personnel stand guard outside Parliament. — AFP/File
The aim is to achieve goals quickly and decisively. The idea is to forcefully ignore or bypass obstacles, challenges and objections. To “blast” is to use explosive force or intense energy to clear a path or remove obstacles. It implies a swift and powerful action to achieve set goals and objectives. When someone “blasts through” something, they are pushing forward aggressively, ignoring any potential resistance or barriers.
To “bulldoze” is to use heavy machinery (a bulldozer, for instance) to clear a path by physically pushing aside obstacles. In a figurative sense, “bulldozing” refers to a forceful or determined approach to overcoming obstacles. “Disregard” means to pay no attention to something or to intentionally ignore it. When someone “disregards” something, they are typically dismissing it as unimportant or irrelevant to their goals or plans.
The overarching objective is to attain economic prosperity, yet it is challenged by two significant impediments: political instability and a lack of policy continuity. In cases where State Owned Enterprises (SOEs) pose a hindrance, robust measures will be employed to pursue economic prosperity, often with a disregard for potential resistance or barriers. Conversely, when rampant smuggling presents a roadblock, expect the deployment of decisive force or intense efforts to eliminate these obstacles and pave the way for economic prosperity.
The goal is to foster sustainable economic growth, a goal hampered by the twin challenges of terrorism and corruption. In addressing these formidable obstacles, expect the implementation of resolute and multifaceted strategies aimed at realizing economic growth. To counteract the threat of terrorism, a comprehensive approach will be adopted. The battle against corruption will be waged through stringent anti-corruption measures and robust governance reforms. These actions aim not only to remove obstacles but also to lay the groundwork for a more prosperous and secure future.
In summary, the phrase “blast, bulldoze, and disregard” collectively conveys a sense of aggressively and forcefully pushing through obstacles or challenges to achieve preset targets. It suggests a determined and single-minded approach to achieving a goal, even if it means ignoring objections, concerns, or established protocols along the way.
This shift in strategy to ‘blast, bulldoze and disregard’ underscores our commitment to finding solutions that have been elusive through conventional means. The multitude of alternatives we’ve pursued and experimented with has brought us to this decisive juncture.
While these forceful actions may appear uncompromising, they are driven by the necessity to create a stable and prosperous future. By confronting issues such as political instability, policy gaps, terrorism, and corruption with unwavering resolve, the aim is not only to remove barriers but also to lay down the foundations for lasting progress. In this spirit, we all must march forward, steadfast in our dedication to achieving our goals quickly and decisively, leaving no impediment unaddressed on our path to a brighter and more prosperous future for all.
September 5, 2023
Source: The News International
Businessmen upbeat about army chief’s resolve to revive economy
KARACHI: The business community feels reassured by the assurances reportedly held out by the army chief in his recent meetings with traders that all-out efforts will be made to bring foreign investment to the country and revive the economy.
Appearing in Geo News programme ‘Aaj ShahzebKhanzada Kay Sath’ on Monday, FPCCI President Irfan Iqbal Sheikh said that the meeting with the army chief is a breath of fresh air. The business community held detailed meetings with the army chief, who spoke with the business community candidly.
He said the army chief told them that $25 billion investment had been discussed with Saudi Arabia, which had assured Pakistan of investment in IT, minerals, agriculture and defence. The army chief told the business community that Mohammad Bin Salman had agreed that of the $25 billion, $10 billion will be kept in the State Bank of Pakistan. This will be returned in the form of the Pakistani rupee or goods so that the foreign exchange could increase.
The army chief said that Mohammad Bin Salman has identified bureaucracy obstacles to investment and called for removing them. The army chief told the business community that we have formed SFIC for doing away with the bureaucratic hurdles. Now nobody could disturb them (DFIC), and nor any bureacrats could undermine them nor would they face any problems with courts. He said the army chief told the business community that Saudi Arabia and the UAE had held out the assurance that each would invest $25 billion, while $25 billion each would come from Qatar and Kuwait.
Sheikh said that the army chief had vowed that the land grabbing mafia and the extortion mafia would be reined in to control corruption. The army chief said that for improving the situation, four task forces are being constituted on the FBR, border control, smuggling and social media. He said the army chief wants to root out corruption. He said the business community had become disappointed but the army chief had given it courage hope.
Speaking to host Shahzeb Khanzada, Business Group Chairman Zubair Motiwala said that every new chief holds meetings with traders.
He welcomed army chief General Asim Munir’s meetings with the business community. He said the body language of the army chief was different this time as compared to his earlier meetings. General Asim Munir went to Saudi Arabia and the UAE for the revival of the economy, and now he plans to go to Qatar and Kuwait.
Zubair Motiwala said the army chief directed the corps commander that not a single litre of Iranian diesel should come to Karachi. The army chief also issued directives for retaking encroached lands, ending corruption and improving law and order. General Asim Munir said in the meeting that only 1.1 registered Afghan refugees can live in Pakistan and the rest of them will have to go back to Afghanistan. The army chief said Mohammad Bin Salman complained about corruption and bureaucracy in Pakistan.
Zubair Motiwala said they discussed the charter of economy with the army chief. He hoped that such a huge investment will bring improvement to the economic conditions in the country. He said they drew the attention of the army chief towards the need for investment.
He said we told him that Rs1,300 billion are going to waste due to state-owned enterprises. He told him that political governments cannot opt for privatization. The army chief said he realized that and the government would not go full-fledge for privatization and would get rid of burden at all costs.
September 5, 2023
Source: The News International
What plans did army chief share with businessmen?
Aamir Shafaat Khan
KARACHI: Amid a gloomy economic atmosphere and lingering wheat, cotton and dollar crisis, Army Chief General Asim Munir has signalled towards the country’s bright future in view of the upcoming huge foreign investments in various sectors.
In a four-hour meeting with some 50 businessmen on Saturday, the army chief said during his recent visit to Saudi Arabia he had informed Mohammad Bin Salman that he had not arrived here for a $1-2 billion investment into Pakistan.
Later, the Saudi prince assured the army chief of investing $25bn in Pakistan under the Special Investment Facilitation Council (SIFC) aimed at attracting investment in the agriculture sector by offering land and ensuring exports.
Sources said the army chief has asked the Saudi prince to set aside $10bn to overcome the country’s foreign exchange issues which would be returned in rupees.
While referring to the meeting in the UAE, the army chief had also requested the UAE ruler to provide $10bn for improving foreign exchange reserves on which the UAE ruler had reportedly agreed. Another $25bn investment is also committed by the UAE ruler in case the army is with us.
Gen Asim Munir also assured businessmen of bringing $25-30bn investment from Qatar and Kuwait in his next visit to improve the country’s economy. He said that he would try to bring a total of $75-100bn investment from Saudi Arabia, the UAE, Qatar and Kuwait.
A businessman, who attended the meeting, said that the army chief had also disclosed levelling of lands was being done in various areas of Punjab, Sindh and other provinces to encourage foreign investment in various crops.
Sources said Gen Asim had also hinted at not going towards the International Monetary Fund (IMF) for any new programme as the fund does not give any permission to work freely and an increase in power rates was also a part of the programme.
The meeting also discussed gas, power, export and corruption along with the role of bureaucracy. On smuggling of Iranian petrol, he asked the corp commander that the Iranian petrol should not reach Karachi. The issues relating to corruption in Sindh, the culture of tax evasion, privatisation of sick SOEs, the return of illegal Afghani people to their homeland and non-filing of tax returns also came up in the discussion.
A businessman termed the meeting highly encouraging which would yield positive results at a time when the country is facing deep sugar and wheat crises and soaring dollar value against the rupee.
He said a follow-up meeting had been arranged with Corps Commander V in Karachi in light of Saturday’s meeting.
“Gen Asim Munir looks firm and optimistic to bring huge foreign investment from our Muslim countries and it will certainly make a difference in economic indicators,” he said.
The meeting was attended by Businessmen Group Chairman Zubair Motiwala, Karachi Chamber of Commerce and Industry President Tariq Yousuf, FPCCI President Irfan Iqbal Sheikh and some prominent businessmen of Karachi.
September 5, 2023
Source: Dawn