Sethnomics

Majyd Aziz

Forty years ago in October, I boarded a plane at JFK International Airport, New York City, after spending one year at Tri-State College, Angola, Indiana and three years at Ball State University, Muncie, Indiana, and headed for my home city, Karachi. Honoring the wishes of my paterfamilias, I successfully completed by BS in General Business Administration and my MA in Management. Despite the mocking of quite a few relatives who were ready to place bets that I would be home after within six months in USA, my parents knew in their hearts that I would not let them down. Lo and behold, all five brothers (and also our boys and girls) came back armed with US degrees. Within days of landing in Karachi, I was told to report to the factory textile mills and given an office and the title of Director Administration, Accounts and Finance. 

The above narrative takes on special meaning to manifest my transformation from a student in an alien land to a boss in a family venture. Overnight, I became, what the entrepreneur, owner, and investor of a business or industry is referred to in Pakistan --- SETH. A culture of Sethnomics began while textbook Economics ended when I sat on the Director’s chair. For forty years, I have been routinely called Seth. So much so, that even internal mail as well as vouchers and bills are addressed as Majyd Seth instead of Majyd Aziz. For forty years, I have always been contemptuous of this honorific and I hate this word every day of my life. Much to my chagrin, our next generation is also referred to as Seth and even when my son was less than ten years old and would at times accompany me to the factory, he too was called Aly Seth. Today he is 34 but the title has struck to him like an albatross.

Notwithstanding my personal attitude towards this title, Sethnomics is very much present in trade and industry. It is not exclusive to mega tycoons or the nabobs of business. Even the owner of a micro-enterprise is a Seth. Mian Mansha, officially the richest man in Pakistan is a Seth. Probably, the guy who runs the seedy gambling parlor too is a Seth. However, before trying to ridicule this title or before trying to sound presumptuous, it is pertinent to understand and comprehend the role played by the Seths in building the economic base of Pakistan and whether their progeny have adopted the same vision, the same passion and the same powers. Yes, the first two decades were a different era as during that period, the country saw the advent of a monopolistic class of a comparatively inward-looking, elitist, smaller group who controlled the main essentials of wealth – finance, real estate, industry -- and who resisted a broad-based economy because that would have directly jeopardized their exclusive situation. This group consisted of what Dr Mahbub ul Haq derisively called the ’22 families’. It was Z A Bhutto, the ultimate rabble-rouser, who introduced his Islamic Socialism slogan and managed to break the stranglehold of this privileged group.

The so-called ’22 families’ were the original Seths but when they faced the onslaught of Bhutto and his Politburo, most of the families split but, after a prolonged sojourn, were back on the driving seat. So, many more Seths were created. It is important to mention here that during the dark days of Islamic Socialism, a new cadre of Seths was created. This cadre earned their wealth in whatever way through their presence in the corridors of power or got rich by milking financial institutions dry and then ensuring that loans were written off forever. As time went by, Seths were aplenty. The original concept of Seth was ceding to this new persona of a Seth. Still, to paraphrase the words of a Baloch politician, “A Seth is a Seth, whether hereditary or whether nouveau riche.”

One sector that is primarily dependent on Sethnomics is the textile processing industry. SITE Karachi has over 35% of the nation’s dyeing and printing mills in the organized sector. Invariably, except for a few that one could count on fingers, these mills are micro-managed by the Seths. The customers are not comfortable in dealing with marketing managers or sales representatives. Yes, they would like to be reassured by the technical ‘masters’ but their focus is on the Seth. Thus, many owners of these units are in their factories most of the time.

Another example that would reflect the Seth-vs-Professionals is the tea industry. The two major brands are Lipton and Tapal. The former is a professionally managed entity where decisions are taken by a remunerative management team while the latter is a third-generation family-owned enterprise. Both brands are popular and both have their own dynamics. However, is Tapal a global brand, considering the fact that its owners have deep pockets to finance and market the brand? Is Sethnomics at work here too?

A recent phenomenon in the clothing retail sector has been the proliferation of outlets of well-known apparel brands. As the creator and owner of Hustler, an innovative apparel brand, I used to advice other garment manufacturers to set up their own retail outlets and not to depend totally on existing retail shops. That was in the Nineties. Nearly all of them rejected my advice and in turn suggested that I have my head checked by a shrink. Well, when these brand owners faced non-payments from retailers and when they discovered they were not in control of the marketing at retail stage, they made the paradigm shift and desperately set up outlets all over the country. Although controls and systems are in place, the Seth syndrome is very much there because all these brands are family-owned. Not a single unit is listed on the stock exchange. Decision making is concentrated in the hands of owners in much the same manner it was when the brands were placed in non-owned retail shops. Sethnomics!

Ironically, family-owned businesses or Seths are never given the importance they deserve. Foreign supported programs for entrepreneurship development are targeted towards a new breed while nominations from applicants who already work in family businesses are shunted aside. What is conveniently forgotten is the fact that this new breed of entrepreneurs would eventually become Seths. At the same time, it is worthwhile to pinpoint here that the newcomers in established family concerns are more often than not technocrats and have their own fresh ideas and motivation. They are far more inclined to introduce innovation and establish corporate social responsibility than their elders did. They are also more disposed towards ensuring the continuation of their business and that in future, these businesses should not be just depending on family members. They are also keen to utilize all available business development tools, including participation in exhibitions, delegations, and Chambers and trade Associations. Sethnomics works, but at an open, formal and higher level. 

Muhammad Ali, former Chairman SECP, in a recent op-ed very aptly stated that “This requires a paradigm shift in Corporate Culture away from the largely prevalent ‘Seth Culture’ where companies would be required to invest in the longevity of the business leading to institutionalization/corporatization of the company.”