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Essential Steps for Pakistani Companies to Compete Globally
Unlike the rest of the world where companies grow larger with time, in Pakistan companies tend to grow smaller. Furthermore, Pakistan based firms do not flourish due to the non-conducive environment for businesses including regulatory framework, policy uncertainty and an overall economic Misgovernance.
- Why Pakistani companies are so stunted? We have hardly any Billion Dollar Companies. Internationally Billion Dollar companies are SMEs. Can we grow without growing companies?
- Most of the companies are “seth companies”. Pakistanis hate to professionalize their management. Similarly, they do not like to be listed on the stock exchange.
- Family control also means that at the time of inheritance, most companies split up among the next generation thereby reducing the chances for growth.
PIDE recommends that companies be given incentives to professionalize and list on the stock exchange and grow.
Why do companies in Pakistan not target foreign markets? Most of the companies are not exporters. Large houses have always been incentivized by policy to remain in the domestic market, either through protection, or through given opportunities such as IPPs, privatization, subsidies etc.
PIDE recommends that government give incentives to companies based on their performance in exports.
- What are the major areas where companies in Pakistan lag behind global
competitors?
- Why is there no R&D and innovation from Pakistan based firms and businesses to make their product or service unique in the global market?
- Most of the companies do not focus on developing a brand name with a known product. That is why they do not need R&D. For this reason, they also do not need any local research or any local university which is also depressing our thought and research industry.
- What are the regulatory hurdles preventing the companies from operating outside Pakistan and targeting foreign markets?
Exchange controls prevent Pakistani firms from expanding overseas. Is this a good thing?
Panelist:
SHAHID HAFIZ KARDAR
Former Governor, State Bank of Pakistan
AHSAN BAKHTAWRI
President Islamabad Chamber of Commerce & Industries
NADEEM UL HAQUE
Vice Chancellor, Pakistan Institute of Development Economics
KHALID SIDDIQUI
Bank Alfalah
Mohammad Shaaf Najib (Moderator)
Research Fellow, Pakistan Institute of Development Economics
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