From an external perspective, Pakistan’s business landscape appears to be moving in the correct direction, with the stock market steadily increasing in value, corporate earnings in certain industries rising, and the personal net worth of prominent domestic business families (though few in number) often exceeding $500 million, with some even surpassing the $1 billion level. However, the real issue remains: is this truly accurate, implying that everything is fine regarding manufacturing enterprises in Pakistan?

The response might not be simple, as on one side we observe certain positive developments, yet on the other, we witness limited industrial expansion that offers minimal support for job creation and reducing poverty. From a business perspective, this implies that although the Pakistan Institute of Corporate Governance (PICG) is performing well by promoting proper transparency and ethics within corporate governance frameworks, the Securities and Exchange Commission of Pakistan (SECP) has been slow in developing policies that foster healthy competition, prevent exploitation, and ensure balanced economic development primarily focused on small and medium enterprises—the foundation of every economy and key driver of innovation. The concern arises from the growing trend where the corporate landscape becomes entangled with government institutions or bureaucracy, potentially leading Pakistan toward an undesirable form known as Predatory Capitalism.

An environment where corporations generate profit and expansion through connections with government authorities, opaque ownership structures involving officials (often oligarchs who excel at such practices), cartels, and direct lobbying rather than superior operations. For instance, consider a life insurance company—whether state-owned or privately run—that appears reliable during premium payment periods. However, once a claim arises following years of contributions, you may find yourself caught in complex bureaucratic procedures specifically crafted to frustrate clients into giving up. Even if your request eventually gets acknowledged, processing might take several months.
Companies aim for profitability; that’s part of their role. Nothing here is unlawful. Yet laws do not define ethical boundaries—in particular, when firms possess significant political influence over legislation benefiting themselves. If enterprises exploit these loopholes to negatively impact consumers or gain unfair advantages by undermining competitors, trust in both the system and corporate leaders diminishes. While some organizations have consistently behaved poorly, societal views toward business have drastically shifted within just one generation. According to Gallup surveys conducted across developing nations, the proportion of individuals expressing “great” or “considerable” confidence in large businesses dropped from 30% in 1990 to only 16% as of 2024. Hence, what explains the recent surge in aggressive behavior among businesses in emerging economies like Pakistan?
This trend stems largely from the finance-driven nature of Pakistan’s economic structure. As control of the banking industry passed into the hands of industrialists and business groups—a situation inherently marked by conflicts of interest—the financial sector expanded significantly in size and strength. Its growing ambitions, increasing demands, and clear marginalizing of small and medium-sized enterprises along with agriculture sectors have altered how companies operate and fundamentally reshaped the approach to attaining success throughout most areas of the economy.

This indicates that more businesses now prioritize exceeding market performance—achieving top short-term outcomes—at all costs, sometimes using questionable methods or collaborating with those meant to monitor them. When viewed collectively throughout the whole economy, this leads to increasing company earnings, a thriving stock exchange, elevated joblessness, and a populace that increasingly perceives corporate executives and capitalism itself as viewing them as targets, constantly driving them toward destitution.
Leaders who genuinely care and are surprised by such skepticism—which is becoming more widespread in Pakistan—would benefit from seeking insights from qualified experts in this area. To rebuild trust within the system, initiating changes at the SECP could serve as an effective first step:
1) Cease claiming that management’s primary duty is to maximize shareholder returns; this often becomes a convenient justification for exploitative actions.
2) Recognize that certain regulations—even ones impacting immediate profitability—are essential and advantageous over time. Businesses typically compete based on benchmarks set by rivals. Should another firm boost its figures via aggressive tactics, it exerts significant pressure on others to follow suit. Regulations can resolve these issues, and business leaders must feel comfortable advocating for prohibitions on practices known to be ethically wrong despite potential financial gains.
3) Function as stewards instead of aggressors. An aggressor consumes resources without leaving anything behind—or fosters competition among similar entities. The main role of a steward involves improving upon what was inherited. Acting as a responsible corporate leader entails establishing sustainable markets, maintaining transparent relationships with consumers, and addressing violations effectively. Those seen as overseers tend to inspire fear and resentment, whereas stewards earn respect and affection. What type of entity does the SECP prefer to become?

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