Adjusting to the new normal.

Byline: Afshan Subohi

COVID-19 has shattered the illusion of power and security that money and connections afforded to the elite, including the incompetent rent-seekers, in the pre-pandemic world. Those days are hopefully gone, at least for now.

The future, it appears, belongs to the innovative minds in the business class that trust the power of ideas more than tax breaks and concessions and are willing to make necessary adjustments and charge ahead with confidence to beat the competition on merit.

There is a perception that the pandemic has squeezed the economy so hard that it might have choked the system of patronage and pilferage, at least for now.

Sadly, the archaic mindset dominates the corridors of Corporate Pakistan. After the initial phases of shock, denial and depression, the focus is on socialising the losses. The reluctance to shake off the habit of looking towards the government more than the market has been blocking the natural progression towards higher productivity and strength. This again is understood to be distracting magnates and merchants from reinventing the business model that suits demands of the emerging post-pandemic world.

Currently, the discussions in the corporate circles continue to revolve around the failings of the budget to provide requisite support. They wished for complete freedom to inject funds to salvage businesses without declaring their source, exemption from labour laws to hire and fire at will, meaningful tax breaks, duty-free input and machinery imports, cuts in the energy cost and the availability of cheap land in industrial estates.

More than half of the top 150 CEOs considered the federal budget a non-event, according to a recent survey

The downward revision of the interest rate from 13.5 per cent to 7pc since March did not cheer them up. They mention the eroding value of the rupee against the dollar has escalated the cost of imported inputs. Some expressed doubts about the disbursement of over Rs100 billion concessional credit to finance the wage bill of idle employees during closures or partial operations.

A recent survey carried out by AB Core, a financial advisory firm, did provide some insight. It reached out to 150 top CEOs and leaders after the budget. Almost 60pc of them considered the federal budget a non-event while 27.5pc aired negative opinion. About 13pc of them supported it. Most respondents considered budgetary steps insufficient to deal with the health threat or the economic...