A survey conducted by Szabists Executives
Sep 20 - 27, 1999
The current fiscal year ended on June 30, 1999 without bringing any
good news to us. The performance of Pakistans economy remains disappointing during
the year owing to many reasons. Among other things, economic sanctions slapped by the USA,
halting of the loans by the IMF, the Asian Development Bank, and the World Bank, worldwide
recession and depressed domestic demand were the main reasons, which pushed the economy
down the hill.
Good news coming from the official quarters, however, suggests that the
inflation and budget deficit have come down, the rupee has remained stable during the
year, the trade deficit has shrunk, and the foreign exchange reserves have passed $ 1.5
The budget for the fiscal year 1999-2000 also presented in the
parliament in June 1999. The budget received a mix response both from the public and
A great threat to the economy, recently acknowledged, is the year 2000
(Y2K) problem or millennium bug. Like other developing countries Pakistans economy
is also very much exposed to the threat emanating from the Y2K bug. According the World
Bank survey conducted in January this year, Pakistan has been placed among the countries
which have medium awareness about the Y2K.
In the above backdrop a survey was conducted to clear the smog of
uncertainty and confusion.
Respondents: A random sample of 90 multinational and large companies
based in Karachi was selected of which 79 companies respondent the question
Period: June-July 1999
Method: Personal interviews and by facsimile.
Conducted by: Research and Consultancy Wing of Shaheed Zulfikar Ali
Bhutto Institute of Science and Tech nology (SZABIST), Karachi.
The objectives of the survey were:
1. To know the views of business community based in Karachi (as Karachi
is the financial capital of the country) about the present state of the economy and the
2. To know the preparations being done by the large companies including
some multinational companies and financial institutions to check the Y2K bug and;
3. To seek suggestions from the senior executives of large companies
and financial institutions to put the economy back on rails.
Most of the executives interviewed belonged to age bracket group of
31-50 and had good professional degrees such as, CA, MBA, and MSc. and MA. All of them
were well placed in their organization and were working at senior level position such as,
senior manager, general manager, vice president, chief executive, etc.
Questions and response about the general economic trend
About the pace of their business, 53% said that their business was
running at a medium pace now, 38% replied slowly, and 9% said fast.
About the growth of their business, 43% saw their business growing in
the year 2000 (Y2K), 27% said stagnant, 7% said declining, and 23% said dont know.
About Pakistans economy growth, 48 % said it will be moving
slowly in the Y2K, 22% said declining, 20% said stagnant, and 8% said dont know.
When it comes to the implementation of governments policies, 46%
said government sometimes works on its policies, 23% said it never works, 15% said it
always does, and 16% remained neutral.
Coming to the Independent Power Projects issue, 69% said the government
tackled the issue unprofessionally, 11% said professionally, and 20% said dont know.
About the current state of the economy 66% showed deep concern, whilst
23% showed some concern, and 11 % remained neutral.
About the type of the government which they think suits to the economy,
37% voted for equal representation, 27% voted for the government of technocrats, 25%
supported the democracy ( in existing form), and 11 % favored military rule.
56% said tension with India is likely to strongly affect the economy,
22% said lightly, 16% said moderately, and 6% said dont know.
About the budget 1999-2000: About the present budget, 38% said it was
friendly, 42% said no, and 20% said dont know.
Asked did the present budget help unlock the economic growth process?
53% said it might not, 29% said it might, whilst 18% remained neutral.
Asked about the present tax increase on the salaried class people, 98%
agreed to the question that the government must restructure the tax machinery system
rather than keep on increasing taxes, however, 1 % said no, whilst 1 % said dont
About the agriculture income tax, 83% said it should be taxed, 12% said
no, whilst 5% remained neutral.
About abolishing the local taxes ( Zila and Octroi), 76% agreed that it
was a good decision, 17% said dont know, whilst 7% said no.
About the mini budgets, 87% agreed that mini budgets are likely to come
in the near future, 5% said no, and 8% said dont know.
To a questions about the education, 88% said more money should be
allocated in the present budget for education, 7 % said money should be less, 2% said
seemed ok, whilst 3 % remained neutral.
About the Y2K problem
About the awareness of the Y2K problem in Pakistan, 52% ranked it low,
34% said medium, 5 % ranked it high, and 9% said dont know.
About the impact of Y2K problem to their business, 48% said it would
affect their business to some extent, 42% saw no impact, 10% said dont know.
To check the Y2K bug, 68% said their organization was doing enough to
check it, 10% said they are not ready yet, whilst 22% remained neutral.
Lastly, asked if the government was doing enough to warn the public and
businesses about the Y2K bug, 62% said no, 24% said yes, whilst 14% remained neutral.
Views of the executives
a) Main causes of dismal performance of the economy
Having dealt with the closed-ended questions, the survey also provided
an opportunity to the executives to share their feelings with us.
The views gathered during the survey were almost similar to what we had
gathered in SZABISTs first survey of Pakistans economy, commissioned in 1998.
The executives interviewed had strong feelings for the country and
therefore were very critical about the way things were looking bleak. Majority of the
respondents suggested that the principal causes of continuous dismal performance of the
economy, were corruption, governments poor decision making, political instability,
bad governance, lax financial system, increasing dependency on the IMF and World Bank, and
ephemeral economic policies aimed at solving short term problems.
b) Proposed Important Remedies: The attitudes uncovered by our survey
suggest considerable worry over corruption and the way countrys political system is
running. Majority of the people surveyed were of the view that the countrys economic
situation is so bad that it cannot be corrected within few months because it seems that
every segment of the society has been corrupt. They suggested that a minimum of 10
years period be isolated for a government of technocrats in which the best people
are extracted from every sector of the economy so that the recovery could kick-start.
Some of the executives said wheels of Pakistans economy should be
steer away from the IMF/ World Bank. They further suggested that the governments
economic policies should be goal oriented, consistent, and run over a longer period of
time. And to cement publics confidence, the government must not hide true facts and
figures about the health of Pakistans economy. Moreover, media should also be made
free from political patronage and it should report what stands true.
A general feeling, gathered during the survey, was that executives were
worry over the deteriorating standard of education in the country. They said that more
work needed to be done in this regard. Executives seemed pretty sensitive about taxing the
agriculture income and limiting the role of bureaucracy. Interestingly, they also raised
their eyebrow about disciplining the politicians.
Coming to the Y2K awareness problem, they suggested that the government
must increase its activities in this area and that this issue must not be taken lightly.
The people surveyed however, showed confidence that Pakistan has got
enormous resources, but these need sound management and harnessing.
Compiled by: Syed Asad Hussain (Senior Faculty Member,