Ayesha Saba

The government should minimise its strong footprint in the economy and implement laissez-faire reforms to ensure competitiveness and vibrant markets in Pakistan. This was stressed by economist Dr Usman W. Chohan, Director of Economic Affairs and National Development, Centre for Aerospace & Security Studies, Islamabad. Talking to WealthPK, he said in Pakistan, there was a high degree of government involvement in most markets ranging from agriculture to manufacturing, from retail to transport, and from trading to construction. “Pakistan still lacks a proper regulatory framework for competition. We have a competition commission in the country, but we don’t have competitive markets.

The government’s intervention in the market has put pressure on businesses and prevented them from operating to their full potential,” he underscored. He pointed out that the domestic competition was constrained by structural regulatory barriers to entry, market dominance by a few firms, lack of effective competition policies, etc. “It is very difficult for industries in Pakistan to operate due to the lengthy government regulatory framework, which leads to excessive paperwork, rent-seeking, high transaction costs, and trade barriers.”

Usman W. Chohan said Pakistan’s economy already had a volatile growth pattern over the years, with regular boom and bust cycles, thus failing to achieve long-term and inclusive growth. “Adopting a free-market mechanism has the potential to improve Pakistan's economy by promoting competition, innovation, investment, and resource allocation. However, the transition should be well-planned, with measures in place to address challenges and ensure that the benefits are distributed equitably among the population,” he emphasised. He called for market reforms to transform Pakistan’s economy into an export-led growth trajectory.

“In addition to improving the economy’s competitiveness and productivity with a vibrant private sector, it is also critical to attract domestic and foreign investments to support it.” Talking to WealthPK on condition of anonymity, an official of the Competition Commission of Pakistan said, “The commission works to ensure free competition in all domains of commercial and economic activity, to enhance economic efficiency and protect consumers from anti-competitive practices, such as deceptive marketing.” He said the commission had taken a number of enforcement actions in areas such as deceptive marketing, collusive bidding and cartelisation. “These enforcement actions were aimed at protecting consumers from exploitation by certain elements in the business community.”

He urged the business community to approach the commission on consumer issues and help identify anti-competitive business practices. “In order to make policy decisions and provide guidance to various departments, the commission serves as a collegiate body.” The free-market mechanism is an economic system where prices, production and distribution of goods and services are driven by the forces of supply and demand in an open and competitive environment. In a free market, individuals, businesses and organisations interact freely to buy and sell goods and services without significant government intervention or control.

Credit: INP-WealthPk