Few people would begrudge prime minister Nawaz Sharif’s efforts to encourage investment in Pakistan. Deregulation, privatisation, foreign exchange reforms, infrastructural improvements in telecommunications, roads, ports and power — all these are laudable initiatives. Mr Sharif is also trying to encourage foreign investment by holding “investment conferences” and advertising new opportunities in Pakistan. Why then are foreigners still shy of capitalising in Pakistan?
There is, of course, nothing extraordinary about the economic incentives offered by Pakistan. In fact, many other developing market economies in the region are probably flogging much better terms than us. At best, we may be at par with them on this score. Unfortunately, however, Pakistan is rock bottom on another scale which crucially matters to foreign investors. This is the credibility of the host country’s political, social and cultural environment — in other words, of its “image”. This “image”, regrettably, is a “negative” one. It makes Pakistan a most unappetising party with which to do business.
The world sees Pakistan as hopelessly trapped in the prism of drugs and guns and mullahs. It is frightened when it hears about businessmen and foreign technicians being kidnapped for ransom. It is anxious about the adverse impact of “Islamisation” on the country’s financial and legal system, on universal human rights, on women’s emancipation, on programmes for modern education and population control — all of which seem to emphasise backwardness rather than modernisation. It abhors the political uncertainty which propels the country from one crisis to another. It panics when it reads about the sleaziest bank in financial history — the BCCI — being patronised by the leaders of Pakistan. It is dumbfounded when it confronts the total breakdown of law and order in most parts of the country.
This “image” is not a false one. It conforms to much that is deplorable in our country. True, this is the price we paid for fighting the West’s cold-war with the USSR. But the cold war is over, the West is trying to cash in the “peace dividend”, yet we remain hopelessly out of touch with new realities. It is these unpalatable realities which must change before we can present an alternative, more enterprising and dynamic “image” to the outside world.
Mr Sharif’s problem is that he is concentrating on marketing a product — Pakistan — whose brand name is tainted in the eyes of the world. If he were, instead, to focus on genuinely improving the quality of the product he is marketing, he would have greater success.
Mr Nawaz Sharif cannot free the economy without also freeing the polity. Democracy and good government is a sine qua non for political stability and economic certainty on the basis of which significant investment decisions are made by international capital. As a businessman, Mr Sharif must surely know that. Why then cannot he create conditions conducive to political stability and good government?
Then there is this business of “Islamisation”. Why must Mr Sharif show the world that he has a soft corner for the mullahs who want to drag the country down? For every iota of confidence generated by Sardar Assef Ali, the PM is losing tons of goodwill at the hands of people like Maulana Sattar Niazi and courts like the Federal Shariat Court. The same holds true for those who wield the gun or push drugs. Why can’t the PM clean-up Punjab, allow the army to clean-up Sindh, and put paid to all the disastrous legacies of Zia ul Haq?
Time is running out. Pakistan is being censured as a “terrorist” state. If that label sticks, we could be in very deep trouble. Our approach has been to argue that India is a bigger “terrorist” and a greater “fundamentalist” than us, why is the West picking on us? This is patently true, yet both East and West are bending over backwards to appease India. Is it only because the West is immoral and hypocritical or is there another more fundamental reason for this partiality?
The “image” that India has historically marketed to the outside world is markedly superior to ours. It is one of democracy and secularism, values much cherished by the West because they are integral to modern capitalism. Even when Hindu fundamentalism runs rampant and communal frenzy creates chaos, the Indian ruling classes and government continue to insist on the virtues of secularism. In Pakistan, it is the other way round. The mullahs are a miniscule section of society, “fundamentalism” is a marginal phenomenon, yet our government and ruling classes go out of their way to paint Pakistan as “an Islamic ideological state”. Instead of reassuring the world that we are a modern nation-state capable and desirous of doing business with them, we consciously give succor to the mullahs and wave the red rag of “Islamisation” to the bulls.
No, Mr Nawaz Sharif must change Pakistan’s ground realities and produce a high-quality product before he can think of marketing it in Tokyo or Davos. All the public-relationing and economic incentives in the world will not succeed in flogging an “image” which is basically tainted.