Question -Why has Pak economy never taken off in 63 years? Answer -We don’t encourage the culture of entrepreneurship and venture capitalism in our economy
By Fareeha Qayoom
dnan (my younger bro) thinks there is loads of rich folk hiding in the woodwork in Pakistan. I always take the opposite view on this issue because a) I like to play the devil’s advocate, b) I like to debate and may take the opposite view even if I personally don’t agree with it for the sake of argument!, (Yes, I like to be difficult and contrary!) and c) because I don’t see the so-called rich folk flaunting their hard-earned wealth on the roads, in the shops or indeed in the local economy – my point, our rich folk might be rich on our terms but they are only the middle class when compared with the world’s international standards of wealth or with the seriously wealthy folk in the developed countries. We have only Mian Muhammad Mansha – the one and only documented wealthy Pakistani that made the grade internationally (Forbes list) and that too for the first time in year 2010! (Most Pakistani rich unlike him, like to keep a low profile – probably to evade taxes and needy relatives!) By the way, India (1947-present) has dozens; one in the top ten of the world – need I say more?
Photo by ak37Adnan usually points to the SUV’s, BMW’s, and Mercedes Benz etc on our roads to support his view, I point to various Honda and Corolla cars to support mine. Most so-called rich folk might have three to four Honda or Corolla’s on the roads, or couple of four-wheel drive jeeps and one luxury car hidden somewhere in the garage but the fact remains the majority of middle class drives Honda-like or Corolla-like cars in the developed countries, or buys clothes from stores like Selfridges, Zara, Next, Mother Care, Gap, Macy’s or Bloomingdales or regularly eats at international food chains equivalent of or like Gloria Jeans Coffees, Subway, Hardees, KFC, McDonald’s, Dunkin Donuts etc in their economies for that matter!
Not that I am knocking Adnan’s theory. Our seriously rich folk are either a) hidden in the woodwork or b) they are seriously lazy or c) they are not actually seriously rich – it’s a facade. You decide.
Most rich folk in the developed world make their money work for them; they invest in new ventures, have this hedge fund going here, that mutual fund over there, might have ten fund managers working for them investing here, there and everywhere, managing and multiplying their wealth or have their fingers in diverse financial pies spanning industries, however, our rich on the other hand, can only siphon off their spare cash and keep it hidden in foreign bank accounts!
Living off your interest doesn’t multiply your wealth (it only keeps your capital safe) – Ask any economist! – making smart investments on timely innovations multiplies wealth (Remember the original Levi’s Strauss? He didn’t invent Jeans. He invested in the guy who invented Jeans! :)) which the banks do with your money all the time – (they can also afford to write off a few bad investments – that’s the nature of risk – mostly they bet on sure thing after due diligence and hedge their risk by lending against securities and collateral). I don’t see any venture capitalism, or serious entrepreneurship going on in our part of the world. In fact, our so-called entrepreneurs actively seek out the young innovative and creative minds and either a) grind their brilliance into dust or b) help them make their minds up to migrate to greener pastures – yes, you guessed it, USA, Canada, Australia, or Europe – this is popularly termed as ‘brain drain’ – our best minds run away to help the developed world’s financiers multiply their wealth while we keep lamenting on our lack of skilled people!; or c) help them become merely mediocre to survive in this economy.
Majority of our rich folk might buy excessive real estate, dabble in currencies, or buy a few imported luxury cars, designer clothes, exotic vacations, foreign education and shop till they drop but by and large, all this behavior just tells you that either a) they have visions of grandeur or b) they like living beyond their means or c) they are living off borrowed wealth (ill-gotten gains acquired through corruption!) or d) they are second or third-generation wastrels and living off the wealth made by the first generation! People in the business of making money don’t behave like that. They behave like Mian Mansha. Unfortunately, we don’t have enough Mian Mansha-like people willing or able to pull this economy through its boot straps. We need entrepreneurs and venture capitalists. Hello, are you listening? ■