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Analysis: Outlook for culture change

Analysis: Outlook for culture change

The lacklustre performance of the public policies in some areas and dismal failures in other domains are breeding ideas falling in the realm of culture change in state governance and corporate organisational reorientation while ground realities are opening up avenues and freedom for individual enterprise.

This is happening when the state policies are in a state of flux, and the country is struggling with much-delayed challenging structural reforms amidst a growing perception that it is symptoms, not the disease, that are being addressed.

The view is gaining ground that Pakistan needs a synchronised short-, medium- and long-term home-grown strategy incorporating the International Monetary Fund (IMF) programme to manage structural reform and eventually stable economic turnaround.

The current mess, it can be argued, can best be addressed by policymakers by facilitating an emerging culture change environment. The founder of the Cultural Management Research Association, scholar Jeff Cartwright, said, as far back as 1999, that a global culture will emerge from people and that it cannot be imposed top–down. It would be by and for the people that affords a new freedom to those who are enterprising.

An overview of the current conditions indicates that the hybrid regime will pass the baggage on to the next elected government

That is happening owing to opportunities opened up by the current level of worldwide economic development and social progress, supported by the latest technologies, disrupting old ways of doing things while helping to build an alternative world. The process has, however, yet to gather critical mass for needed quantitative and qualitative change.

The emerging trend can be illustrated by dollar remittances sent by overseas workers for their families at home in Pakistan that enable households to improve the quality of life of family members. Remittances’ inflow accounts for about $2 billion a month.

The people, whose livelihoods cannot be sustained by culturally backward agriculture, migrate to cities or to places abroad, weakening the stranglehold of rural aristocracy over landless peasants.

In this digital era, the latest technologies are opening up worldwide opportunities for individual self-employment, facilitating people with IT skills and other expertise to fend for their livelihood.

The recent countrywide protests also demonstrate the bottom-up approach against increasing electricity tariffs and high cost of living owing to inflation that led to a crackdown on long-overlooked power thefts and action against their official collaborators.

The countrywide protests demonstrate the bottom-up approach against increasing electricity tariffs that led to a crackdown on long-overlooked power thefts and action against their official collaborators

Similarly, illegal currency trading, hoarding, and smuggling of rice, wheat, and petroleum products are being curbed. The State Bank is also streamlining legal currency trading to bring transparency to its operations.

While supporting the bottom-up approach, many analysts and stakeholders in Pakistan maintain that it is the government’s obligation to provide an enabling environment for small- and medium-sized individual entrepreneurs to achieve economies of scale in their business operations and enable them to enter the formal sector of the economy.

Recognised authority on governmental reforms, Dr Ishrat Husain has called for overhauling and modernising the government structure and processes through automation, computerisation and digitalisation. And to quote Mr Cartwright, ‘a total quality work culture is a harmony of people with scientific management practices.’

Sustained curbs on power thefts may help reduce the operational cost of power distribution companies, which the IMF insists needs to be recovered by increasing tariffs. Analysts argue that it would not be easy to overhaul the power structure’s recoveries in a short period, particularly owing to distortion in local economies fed by ‘free’ (stolen) electricity.

Change in mindset, management and work culture is required for a turnaround in the energy sector as well as other segments of the economy. Frozen minds are part of the problem and not part of the solution. Owing to record system losses in gas companies, rising to 14.4 per cent, the sale price of RLNG was increased on September 12.

“Cultural values are the most effective way for managing a business for continuous improvement,” Mr Cartwright wrote in his book ‘Cultural Transformation: Nine Factors for Improving the Soul of Your Business’. Shared beliefs, values and motivations are required to inspire and drive employees towards excellence.

As past experience shows, the crackdown on illegal currency does help strengthen the exchange rate and persuade exporters to remit dollar earnings promptly for a short period. Currency dealers say the trend cannot be sustained owing to falling forex reserves and increasing imports, while the banks are stated to be still short of dollars.

The authorities are also aware that they need to do more. Fresh regulatory duties on around 1,000 luxury and non-essential items are reportedly under consideration by the caretakers, as against 960 items covered last year.

There are no short-term solutions to the country’s long-persisting problems that matter. The badly needed investments from friendly countries, if and when realised, would be no substitute for structural reforms.

In the case of new major projects, the bulk of the funds will be spent on the import of machinery, feasibility studies, fees of foreign consultants, etc. Only a minor portion of capital spending will be earmarked for acquiring local assets such as land and physical infrastructure with a marginal passing positive impact on forex reserves.

An overview of the current conditions indicates that the hybrid regime will pass the baggage on to the next elected government, which logically should come to power soon. It may mark a significant retreat of the faltering hybrid arrangement, unable to perform or deliver public goods and afflicted with political instability. This may provide enough space for the next elected governments to complete their mandated term.

To seize such a possible opportunity, the political culture has to change. All parties should start preparing their election manifestos for the approval of the voters. In case of a split electoral mandate, they should be prepared to evolve and work on a common agenda.

Published in Dawn, The Business and Finance Weekly, September 18th, 2023

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