This paper written by
Nadeem-ul-haq throws light on the subject of entrepreneurship in Pakistan that
how from the day of independence till today the government and its policies
regarding financial institutions, trade and business is not neutral and favors
the elite which are fewer in number who actually cannot be called entrepreneurs
but they are rent-seekers.
Author is of the view that policy and environment can be adjusted to allow
entrepreneurship play a greater role in the economy of the Pakistan by
supporting the lower, lower middle and middle class which has established or are
establishing small and medium size businesses with innovation and risk taking.
Moreover it provides a deep real meaning and understanding of entrepreneurship.
It tries to educate the reader about the differences between entrepreneurship
and rent- seeking. Through this detailed research the author argues that
economic growth and progress with poverty reduction are negatively
effected because of the policy environment which is unfriendly to
entrepreneurship.
The current system benefits the giant multinational corporations which settle in
Pakistan due to cheap labor and unexploited opportunities and markets to provide
citizens employment but if these citizens try to establish their own business
and want to become an entrepreneur then the same system becomes obstacle and
creates hindrances for small and medium size businesses. The basic aim of the
current system is to absorb the expertise of the people but not let them
establish their own small and medium businesses with innovative ideas.
The biggest strengths of this article is the way author has explained the
development of entrepreneurship in Pakistan by starting from the independence to
each of the coming regimes by deeply analyzing the good and bad of each regime
and its policies toward business and entrepreneurship that develops easy
understanding for a lay man or for the young generation of Pakistan to
understand the mistakes and ground realities of the policies implemented since
its independence so when the youngsters want to become an entrepreneur so they
have sound understanding of the problems that they can face and deal with it
effectively.
The author dares to lift the curtain upon doings of government in terms of the
business related policies as the small scale enterprise and industry continues
to face unfavorable policies. He claims that the government doesn’t even compute
the actual growth rate of the informal business sector like it does for the
large scale sector. The small scale entrepreneurs don’t have enough financial
resources to invest in the research and development as a result the growth rate
of such small and medium businesses is not good as it should be considering the
opportunities in Pakistan.
As author describes that economic aid from international agencies works only
where the policy and institutional environment is sound but I want to criticize
that whenever international donors give aids it comes with some strings attached
and have their own interests or hidden motives incorporated with it in terms of
the conditions upon which aid is given. So as a result foreign aid itself
disrupts the policy and institutional environment in Pakistan.
In case of Pakistan the concept of creative destruction where free and flexible
markets that will enable the closing down of the less efficient businesses and
replaced with more efficient firms should not be implemented because in Pakistan
the majority of the companies which have local origins are not that efficient as
compare to multinational giant corporations working in Pakistan as they have
full support of their parent company with large scale research and development
facilities. Because of their efficient ways these corporations should not
replace the small and medium local firms but these small firms must receive
support from financial system and government because this will encourage and
empower the local entrepreneurs.
The implications that we can draw from this paper is that the growth of the
entrepreneurship in Pakistan remains limited because knowledge spillovers over
the year has been narrow and imitative. There is need to strengthen the
institute\universities and to encourage them by providing resources to carry out
researches so that innovative ideas and techniques can spill over to the market
and used by small and medium businesses. The local firms should not only produce
products but rather develop their brands to form a positive image in the
consumer’s mind and it will also benefit them if they market their brand outside
Pakistan.