IMAGE AND INVESTMENTS
CHILE'S MINING DISASTER REVEALS HOW GOOD LEADERSHIP USES CRISIS TO SPRUCE UP COUNTRY'S IMAGE.
TARIQ AHMED SAEEDI
Dec 6 - 12, 2010
Blighted image of a country means deceleration of its economy since investors become risk-aversive to direct their capital towards a land that cannot guarantee protection to the investors, thereby stopping a chance of organic growth, led by progress from the core. The country can salvage its tarnished image alone through counter-campaigns in a befitting manner.
Pakistan is highlighted as a land of social disorders, political strife, sectarianism, violence, and battles waged between the state and rag-tag groups, in the media. Accounts of sometime stunning and horrible nature riveted the people to the TV discussing what lies in store for the doomed country. At the same time, fears of losing competiveness, falling economic growth, and drop in foreign investments are ubiquitously pronounced every time an incident takes place.
Since there is lack of counteraction measures in Pakistan to tone down publicised negatives, it is often difficult to convince the investors into cashing in on positives. It is amazing to hear comments from a top bureaucrat and head of an export development company during an interaction. To him, image of a country does not make a difference in a relation across the border since at least business decision is based on prospective profit/loss. He meant if there were commercial benefits involved, perception could not dither away ventures to take steps that were based on economic reality; in Pakistan, typically the economic reality is significant return on investments to foreigners in either equity markets or other corporate sector and unrestricted profit reparation.
Conversely, international examples show that when media run warning alerts that something is wrong it is a matter of great concern for the businesses. For example, anti-government bloody protests in the Thailand that claimed 90 lives and rendered over 1800 injured, caused USD2.2 billion loss to the country's tourism industry.
Nowadays, Pakistani government is besieged with tirades from all corners for its inability to control food inflation and unabated rise in prices of commonly used goods and services, and bad governance. Leading to political instability the atmosphere is full of uncertainty with people hoping for things to be come in order before the recovery process turns out to be a challenging task. The ubiquitous perception about the government's ineptness in governing the state affairs is sending a wrong message to the people across the border, taking toll on foreign direct investments.
Law and order situation in the country is getting worst every passing day. Bomb blast, killing, extortion, kidnapping, and many other scourges have made the public life highly insecure with people becoming paranoid to the extent that indicates psychosis. Bomb attacks, which are as sudden as natural disaster, create a sense of great insecurity in public making the normal routines tremendously disturbed. People are attached to the dreadful atmosphere surrounding crowded place and high security zone as second moment could make them off the earth or leave them on bed in pain. Suicide bombings have killed 640 people and wounded 1800 so far during the present year. The victims were not confined to a particular group since officials of law enforcement agencies and common people were affected during incidents taken place on mosque, shrines, and educational institutions, shopping plazas, hotels, diplomatic enclaves etc. A report by Federal Investigation Agency said civilians were mainly affected in these suicide attacks.
In a crisis, involvement of leaders makes a big difference and plays an important role in image building. Recent mining incident in Chile grabbed the world's attention and people realised how good leadership could be a boon to the turnaround. "Chile's focused leadership from President Sebastian Piņera and particularly Mining Minister Laurence Golborne made a difference in how the rescue effort (managed more like a large construction project) was strategically planned and implemented," wrote Jon Stamell last month in a blog NearshoreAmericas.com. "The plan allowed for international cooperation, options, customer relations (i.e. miners' families), and management of public expectations."
July-September figures of foreign direct investment was not encouraging, however, trade analysts expect constant attraction emanating from few sectors like oil and gas exploration and energy of Pakistan for foreign investors, basing their arguments on agreements recently signed to explore and develop alternative energy sector, which is profitable because of its huge potential yet to be tapped.
Green technology leaders from Slovenia have expressed their keen interests to tap more than 100,000 megawatt alternative energy potential in the province of Sindh. Three memoranda of understanding have been signed in the fields of wind power, hydropower, and waste-to-energy.
Slovenian companies agreed to explore alternative energy resources: wind, hydro, and biomass in the province of Sindh, expecting a marvellous breakthrough within five years.
Sindh has an enormous alternative energy (AE) potential that includes a long wind corridor that can churn out 50,000 megawatt electricity; small and large river basins that can produce 60,000 MW; and huge biomass which can be turned into 600 MW electricity, according to an estimate.
The potential was well recognised by the Slovenian delegation visited last week to sign accords. The consensual observation was Pakistan could emerge as the world's largest AE-production destination within five-year, points out Zubair Motiwala, Advisor to the Chief Minister Sindh for Provincial Investment, who witnessed the signing ceremony.
Speaking to this scribe, Mr. Motiwala says only solid waste-to-energy project will realise an investment of USD2 billion. Run-of-the-river hydroelectricity potential in Sindh is not being fully utilised, he says. Slovenian companies will also transfer technologies to develop renewable energy resources in order to meet the ever-increasing demand of power with special focus on reducing the emission of green-house gases. Pakistan needs to reorganise its skewed energy basket prominently made up of imported oil to straighten the economic imbalances.