Rule of law must to save billions losses: Dr Ishrat

Karachi—Dr Ishrat Husain, former Governor State Bank said that rule of law is lacking in the country due to which over Rs100 billion tax cases are pending in local courts. He was addressing as Chief Guest at the Management Association of Pakistan 27th Corporate Excellence Awards presentation ceremony at Karachi on Tuesday.
He said that private markets cannot function if property rights are not protected, contracts are not honored and disputes are not settled through an open system of the courts of law. If land disputes linger on for over decades in the courts, how can you expect business to enter into long term investments? If bank loans worth billions of rupees are stuck because of the protracted litigation how can you expect banks to make loans liberally.
Dr. Ishrat, now the Dean and Director of IBA, Karachi, said that with collapse of the Soviet model the all powerful role played by the state had disappeared into thin air while the U.S.—the citadel of private market economy, was hurt severely by the most recent financial crisis as the regulatory and oversight role played by the government was minimal. In between these two extremes there is a whole mix of models that ranges from the Nordic, European Social Market, Chinese State Capitalism, East Asian, Indian mixed economy to Chavez Socialism that divide the economic space in a wide variety of ways between the private sector and the government.
He disclosed that the U.S. has 12 percent people living below the poverty line and 9.6 percent unemployment rate. In China, the incidence of poverty has declined considerably and only an estimated 120-150 million people fall below the poverty line. However, the inequality coefficient has become worse. “I have been consistent in arguing that the Government has no business in doing business. The politicians and bureaucrats in Pakistan are neither equipped nor have the appetite for risk taking in running business. I still firmly believe that this country would have been much better off had we sold the Steel Mills to private owners and operators three years ago,” former governor SBP claimed.
What the government can do is to ensure a level playing field for all market participants. If the market structure is monopoly, oligopoly, cartel or in other way imperfect the welfare of the public who buy these goods and services will be hurt. The government through Competition Commission, regulation, legislation and oversight has to protect the consumers from the abuse of market power. A private monopoly, in my view, is worse than a public monopoly and should be shunned, Dr. Ishrat added.
he other speakers on the occasion included Executive Director MAP, Chishty Mujahid, President MAP Executive Committee, Waqar A. Malik, and Honorary Secretary Kamal A. Chinoy. Winners of the 27th Corporate Excellence Awards for Business & Industrial category included Siemens Pakistan Engg. Co. Ltd., Pakistan Petroleum Ltd., BOC Pakistan Ltd., Security Papers Ltd., Hinopak Motors Ltd., Indus Motor Co. Ltd., Nestle Pakistan Ltd., Colgate Palmolive Ltd., GlaxoSmithKline Pakistan Ltd., Pakistan Services Ltd., and Pakistan Telecommunication Co. Ltd.
Shaukat Khanum Memorial Cancer Hospital & Research Centre was awarded as ‘Not for Profit’ Organization. Financial Category Awards won by International General Insurance Co. Ltd., EFU Life Assurance, Allied Bank Ltd., JS Global Capital, and Allied Rental Modaraba.
Similarly, Corporate Excellence Certificates were awarded to; Pakistan State Oil Ltd., Clariant Pakistan Ltd., Thal Limited., Al-Ghazi Tractors Ltd., Agriauto Industries Ltd., Rafhan Maize Product Ltd., Pakistan Hotels Developers Ltd., Pakistan Reinsurance Co. Ltd., Orix Leasing Pakistan Ltd., and First Habib Modaraba.