Do trade bodies lack critical mass?

Majyd Aziz

The hierarchy of various Chambers and Associations lack the critical mass to enforce their protest, criticism and disapproval because of the very obvious matter-of-factness that although there is constant hobnobbing with the policymakers, the captains of trade and industry are not keen on being on the wrong side of these decision makers. The onus, therefore, lies on the representatives of the small traders, markets, or small and cottage industries to vociferously create opposition to the steps taken by agencies, such as FBR. This is not the ideal way to get things done, but more often than not, it propels the leaders of trade and industry to come to terms with the ground reality and then they attempt to adopt, albeit for a short time, the stand taken by the agitators.

The business community has never had a strong voice in the corridors of power. In the Parliament, there are relatively very few members who could be classified as businessmen or industrialists. Traditionally, this community has been apolitical and whatever influence it had was thru its financial and moral support to the established candidates representing major political parties. One very important reason for this approach is, in fact, due to the very nature of politics in Pakistan, where the ruling party is “us” and anybody against it is “them”. These “them” are always considered anti-Pakistan, criminals, cheats, and what not, and thus it is always open season for the minions of the ruling party to indulge in opposition-bashing. It is precisely for this reason that the businessmen have maintained a sideline posture when it came to politics.

The stalwarts of the industrial and business community will invariably fawn over and flatter the hierarchy of the ruling party. They will leave no stone unturned in getting the Prime Minister or the strategic ministers, such as of Commerce or Finance, to their meetings and conferences. It is a common sight to see them at dinners and lunches going gaga over them, professing their support to the party’s manifesto, and at the same time proving their undying loyalty to the party. These are the “Commercial Lotas”. Even the government takes advantage of this and will offer bait to these businessmen to join the party or to keep on supporting it. Many businessmen know which side the bread is buttered and they will strive to squeeze maximum benefit out of this relationship.

The best way for any businessman to get into the good (or bad) books of the government is to become someone “important” in the various Chambers and Associations. Those who take this seriously can in a few years become “godfathers” of these organizations and can then “control” these organizations to their own advantage. Thus there is always a dogfight for top positions in FPCCI, KCCI, and other Chambers etc. Of course, some of these Associations have become “family-oriented”, and the Chairmanship of these Associations is rotated between brothers or between father and son. In most of the Chambers, the “ruling group” maneuvers to stay in power, and the way they do is to have a staff that is compliant and loyal, not to the Chamber or the general body, but unabashedly to these “godfathers”.

The leaders of the business community generally tend to play it safe when it comes to dealing with the ruling party, even in these days of democracy and freedom of expression. At times, the business community has tried to show its wings and there have been strikes or protest marches. However, the government plays softball with the leaders and soon things are back to square one. The media tries to coax the leadership to take action so that sensational news can be conjured up but leadership usually side-steps the goading and the issue seldom creates waves. Expediency and the need to enjoy the perks of office brings these leaders out of their stance and pretty soon diehard agitators who really feel the pain are left dangling in high air.

The present economic scenario and the recessionary trends in the country alongwith cost increases, fortified with low demand, uncertain business conditions, decrease in export orders, uncertainty of the rupee-dollar parity, and the deteriorating law and order situation, not to mention the upsurge in terrorism, have brought businessmen into a frenzy. Their long-term planning has gone to the boondocks while in the short run the capital crunch is proving disastrous. 

Business leaders routinely carp and complain about various roadblocks. The cost of economy of inefficient services of state-owned entities in energy, telecommunication, ports, railways and other public utilities, in terms of increased cost of doing business has been obscenely high indeed. Power outages and voltage fluctuations, shortage of gas supply, inadequate urban water supply, and the high incidental and transaction costs associated with these services have imposed considerable costs on entrepreneurs. The management of the government entities has been largely incompetent, ineffective and unresponsive. The utilities, whether electricity, gas or water providers, have made life miserable for industrialists and the top executives of these organizations don’t even care to meet the business leadership.

One area where business leadership has failed miserably to oppose is that corruption has become endemic. Corruption thrives in an environment of pervasive bureaucratic and regulatory controls. Extensive discretionary powers in the hands of the officials and weakness in the legal framework also generates corruption. There is no recourse to settling matters transparently. Seldom anything happens until the wheels on the files are well-oiled. Reasons for the depth of official corruption can be several. Many of these are sociological, but the more significant ones are political-linked, organization-related and economic policy- based.

Though corruption badly affects different sections of the society in various ways, its costs fall heavily on the investors and entrepreneurs. Corruption has become a camouflaged form of taxation. When regulations, discretionary power and controls are all-encompassing then effective means of obtaining redress through legal or administrative procedures are missing and thus businessmen end up paying the piper to get through them. Graft is usually regarded as just one of the costs of doing business and it needs accounting jugglery to show these payments as legitimate business expenses.

With the advent of a new political thinking in the country, it is imperative that the business leadership brings about a paradigm shift in various business organizations. A focus on institutional quality is crucial, because, like good governance in government, trade bodies should also be high-quality institutions. Is it so difficult to correct? The answer is that the rank and file in the business community has adapted to the prevalent outdated mindset and is now dependent on them. Change is painful and sensitive because powerful forces defend and vigorously protect these organizations. Thus, only a few brave souls advocate change, modernization and improvement. Most of the time, it is nothing but a lost cause. So, they do what has been done for decades. Either fade away or join the bandwagon. Mostly, the latter is their best option. US Navy SEALS have a saying: “Individuals play the game, but teams beat the odds.”