Pakistan's Economic Advisory Council: Will conflict of interest of members stymie effective economic governance?

The inclusion of merchants with evident vested interests in the EAC exemplifies the ethical quandary at the heart of Pakistan's economic administration. Their close financial links to the industries they are supposed to supervise and advise on are a typical example of putting the fox in charge of the henhouse. 

Waleed Sami Jun 21, 2024
Prime Minister Shehbaz Sharif

To help Pakistan's struggling economy recover, Prime Minister Shehbaz Sharif has established an Economic Advisory Council (EAC). This Council, which consists of eight renowned business magnets, is tasked with advising the government on its economic policy. However, a deeper look at the Council's makeup exposes a troubling reality: five of its members are notable business tycoons with considerable vested interests, thus raising some concerns about the usefulness and impartiality of their advice.

Pakistan's economic situation is fragile, requiring immediate and serious support. The formation of the EAC should, in principle, be a step towards comprehensive economic reforms. However, the selection of its members has caused some debate and scepticism. 

Conflict of interests

These people are undeniably prominent in Pakistan's economic landscape, yet their significant investments in multiple industries constitute a conflict of interest. For example, four of the eight members own their personal power plants. Jahangir Tareen, a major participant in the sugar business, also produces power. Tareen's vision and experience are crucial, yet his dual role poses important challenges. Can someone so strongly involved in the sugar and energy industries give fair advice that might jeopardise his personal/ corporate interests? Is it reasonable to expect him to push for measures that may harm his sugar mills or power plants? Saqib Shirazi, another member of Council, owns a power plant and has been producing and selling Honda vehicles for decades now. Despite a 25-year-old pledge, Pakistan has not been able to make and export worthwhile and cost effective vehicles. Shirazi's history of confrontations with the Administration over unfulfilled commitments undermines his capacity to provide objective counsel, as a council member.

Shahzad Saleem, another power and textile industry tycoon, is in a similar situation. His participation in the power generating and textile sectors makes him unlikely to support initiatives that may harm his companies. Zaid Bashir, who represents the Gul Ahmed Group, also owns a power plant. Reportedly, the individual has made a significant investment in a Dubai-based cab firm with over 1,000 cars. This multinational investment hampers his function as an independent counsellor to the federal government.

The ethical dilemma

The inclusion of merchants with evident vested interests in the EAC exemplifies the ethical quandary at the heart of Pakistan's economic administration. Their close financial links to the industries they are supposed to supervise and advise on are a typical example of putting the fox in charge of the henhouse. It is illogical to expect these individuals to argue for reforms that may jeopardize their significant economic interests.

The Council also includes Ijaz Nabi, a distinguished LUMS academic, and Suleman Ahmed from McKinsey. While there are no clear business conflicts, Ahmed's engagement with McKinsey, which is digitising the Federal Board of Revenue (FBR), raises concerns about the impartiality of his advice.

Glimmer of hope

Despite such issues, two Council members stand out for their apparent absence of conflict of interest and commitment to selfless service: Musaddiq Zulqarnain and Asif Peer. Zulqarnain, the head of Interloop, Pakistan's largest sock producer, doesn't appear to have any direct conflict of interest with the government. His creative perspective and dedication to national economic success remain to be admirable. Asif Peer, CEO of Systems Limited, also exhibits this concept. With major investments from Arab nations and exceptional development, Systems Limited's success story is free of direct clashes with government regulations. These two gentlemen are the kind of neutral, forward-thinking consultants, the EAC currently needs.

The capitalist conundrum

The key issue is the intertwining of economic interests with governmental policies. When business people with significant investments in critical economic sectors are appointed to advisory roles, their first allegiance is generally to their commercial interests rather than the greater good. This capitalist paradox threatens the basic premise of fair and successful economic governance.

To effectively reform the EAC and guarantee that it serves the public interest, the government must confront such conflicts straight on. The inclusion of members with considerable corporate interests in industries, directly impacted by government’s policy remains to be a major issue. Instead, the Council should be formed with impartial economists, scholars, and business executives, whose major focus is national economic progress, not personal finances. Instead of creating superfluous bodies like EAC comprising controversial figures, it is prudent to strengthen difference making entities like Special Investment Facilitation Council (SIFC), which is a hybrid civil military financial body, that is working day in and out with remarkable efficiency to attract and facilitate foreign direct investment (FDI) for the country. SIFC has been a success story since its inception a year ago. This vehicle is likely to take the nation to a prosperous destination in coming years.

Reconsider Council membership

The creation of the Economic Advisory Council (EAC) was meant to be a significant move towards economic revitalization. However, the Council's substantial representation of capitalist interests raises serious concerns about its ability to provide objective and effective recommendations. In its bid to meaningfully benefit the country, the government must reconsider the Council's membership, putting selfless service and national interest ahead of political expediencies and entrenched commercial interests. Only then can the EAC truly act as a catalyst for constructive economic transformation in Pakistan.

(The author is a postgraduate student of Strategic Studies from the Centre for International Peace and Stability (CIPS), a school of the National University of Science and Technology (NUST), Islamabad. Views are personal. He can be contacted at )

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