The verdict is out. While we may have become a stock market of Asia we are a market that is ranked in the bottom 16 on nearly all other counts that count. This ranking, of course, is not done by the government of Pakistan or opposing political parties or controversial NGOs but the credible World Economic Forum (WEF) that has released its World Competitiveness Report 2016-2017. This report is the most sought after analysis for investors globally as based on its findings many investment decisions are made. The continuous fall in Pakistan’s foreign direct investment, which has decreased almost 15 percent in the last three years, may be due to the fact these reports show that there are 121 markets out of 138 markets in the world that are performing better than Pakistan.
The analysis is a rigorous study of what makes a country compete in today’s world of global knowledge, cutting edge technology and an ever-demanding consumer. To qualify as a competitive country in the world certain characteristics are necessary for nations to stand out. The report describes those as: “The set of institutions, polices and factors that determine the level of productivity of a country and that in turn sets the level of prosperity that can be earned in an economy.”
According to this measurement, institutions and their quality of governance is the number one pillar that forms the base of prosperity and development in a country. The WEF report clearly proves the point that the reason why Pakistan is in the bottom 16 in the world is because its institutions are ranked the lowest in the world. The National Accountability Bureau (NAB), Securities and Exchange Commission of Pakistan (SECP) and State Bank of Pakistan (SBP), all have failed to find their governance levels anywhere in the mid or top category. The SBP that was ranked 85 in 2012-2013 is ranked 101 in 2016-2017, and the SECP that was ranked 55 in 2012-2013 is ranked 106 in 2016-2017.
But numbers are not what make an institution. It is the vision, mission and values that drive institutions to perform and excel. When you look at institutions in the west it is their ability to live their purpose that makes them sustain change of governments and change of leaders to become a beacon of light for generations to come. Let us compare some key institutions, their ranking in the Global Competitiveness Index (GCI), vision and performance to understand why they have been ranked in the bottom category.
NAB has been ranked 117 in the GCI. The vision statement of NAB is: “The National Accountability Bureau is to be a credible, effective, efficient and dynamic anti-corruption organisation creating an enabling environment for a corruption-free society.” The actual performance cannot be further off from this vision. From the appointment of the head of NAB to the appointment of its director general, there are multiple scandals of out-of-turn promotions and corruption.
With compromised merit comes compromised performance. Last year, on Supreme Court’s (SC) orders, officials of NAB submitted a report to the SC containing details of 150 mega corruption cases, on which no action had been taken for 13 years. Moreover, 17 inquiries into corruption cases against Prime Minister Nawaz Sharif have been pending with NAB for the last two decades.
Recently, Justice Muslim Hani stated that instead of laying its hands on the big fish, NAB was approving and perusing cases amounting around Rs 200,000, adding that there was hardly any difference between the anti-corruption department — the Federal Investigation Agency — and NAB. It is clear that NAB has failed in achieving its vision of a corruption-free society, and has, in fact, failed to build a corruption-free NAB as well.
The Federal Board of Revenue (FBR) is another story of words and no deeds. Its vision statement says: “ To be a modern, progressive, effective, autonomous and credible organisation for optimising revenue by providing quality service and promoting compliance with tax and related laws.” Neither is it autonomous nor is it credible. It continues to follow the command of the government; it misses its tax targets regularly including the present quarter; and it refuses to broaden tax base and include 3.5 million prospective taxpayers because the government does not want its rich and powerful cronies to be taxed. The FBR has been extremely reluctant to touch the people mentioned in the Panama Papers leaks who have been involved in tax evasion. They have issued notices to them but have hardly followed up on them, and have not clearly stated on when, how and who are going to be prosecuted for the billions that have escaped Pakistan into the safe havens of Panama.
The SECP is another institution that has shown the maximum decline in the last three years with their ranking declining from 53 in 2012-2013 to 106 in 2016-2017. Its vision statement is “to develop a fair, efficient and transparent regulatory framework, based on international legal standards and best practices, for the protection of investors and mitigation of systemic risk aimed at fostering growth of a robust corporate sector and broad based capital market in Pakistan.”
Instead of trying to find out the year-to-year decline in its governance of nearly 50 points and taking measures to improve it, the SECP is allegedly pressurising the local partner of the WEF to change its results after the influential global survey showed a steep decline in the rating of the corporate sector regulator. The SECP is already in hot waters for not taking action against those whose names have appeared in the Panama leaks, although its law binds it to move against those who have not declared their beneficial ownerships. It has identified 155 people whose names appeared in the Panama Papers for owning offshore companies. These people are serving as directors at 600 Pakistani. However, the SECP has acted in the typical apathetic capacity where the only voice that activates these institutions is of those who decide their rank and file.
Vision without action is deception. Vision without performance is a nightmare. It used to be an honour to be the head of these institutions in earlier times when men of character would take pride in being part of the institution and do their best to add grace and performance. The armed forces, no matter what their history, are an example of that pride and discipline. However, the present day institutions are treated as deals where perks are traded for integrity and capability. This desecration of vision, purpose, values, laws, rules, pride and respect then become the major reason why institutions and nations become incompetitive in the world.
The writer is a columnist and analyst and can be reached at email@example.com