My father never had it easy. Born to a well to do farmer in a picturesque foothill village
in northern India, he lost his mother, who died giving birth to his third
sibling, when he was not more than seven years old. This tragedy was followed
by the uprooting of the whole family in partition riots. Barely escaping the
massacres, they reached the western side of Radcliff’s line to face
displacement and poverty. He had to walk for miles to reach a school, barefoot
at times. Running from tree to tree to escape the hellishly burning pathways in
summer and freezing in winters. An experience that probably left him with an
obsession to take extra care of his feet and personal appearance throughout his
life.
Being the eldest, he had to start working, as soon as he
finished college. First, as a school teacher and later setting up his own construction
contracting firm. Got married, made a bit of money and ended up producing a
Punjabi movie that bombed at the box office like nobody’s business. Starting
again, he concentrated on his construction business to make hay in the shining
sun of Bhutto’s public works programs in the 1970s. Always averse to the shady
deals one had to indulge in to survive and excel in the cut throat competition of
construction business, he, in partnership with his brothers, set up a rice
husking mill in the early 1980s. Discord between the brothers and lack of planning
to run a new business resulted in losses. He had to return to the business he
was good at but detested. Initial success led to more losses. Monsoon rains, distrust
between partners and trying to make do with meagre working capital led to back
breaking losses.
But did he give up? I would have. But then I have never been
an entrepreneur. I have always gone for the security of employment, prompted
most likely by my close encounter with the uncertainty of doing business in Pakistan.
At the age of 48, when I was also going to college, my
father enrolled himself in evening classes at a law college, while working as
an apprentice with his former tax adviser! Helped by this good man, my father not only completed his law degree but set up his own tax advisory practice in
his early fifties. After initial difficulties, the business picked up. We
siblings also started working, and that to an extent, eased the financial
burden on him. His firm since then has done very well, considering that it is
barely twenty years old. My elder brother runs it now. My father passed away in 2012 after being in business for more than forty years.
The purpose of writing this piece is not just to eulogize my
father but to start a forum to talk about the spirit and tenacity of our small and medium sized
entrepreneurs (SMEs) who never receive any formal training in business management or entrepreneurship start their businesses purely by accident or on their own initiative. Crowded out from the capital market by large businesses and government borrowing from commercial sources, they literally have to beg and borrow from family and friends to fund their enterprises. Despite being in the oft demonized informal sector, these SMEs form the backbone of Pakistan’s economy. They do not keep their books, they do not
comply with labour laws and other standards, they do not pay taxes, but they
create jobs for those who would perhaps starve otherwise. There are rumoured to be (one does not trust
the official figures, does one?) 3.2 million such businesses in Pakistan, forming
98% of the total number of business entities in Pakistan. They contribute
roughly 40% to the GDP and employ more than 70% of the non-agricultural labour
force in Pakistan.
This blog is my attempt to give you an unofficial, may be personal and partial, view of small and medium businesses in Pakistan, the issues/problems they face and the enormous potential they offer for the socio-economic development of this country. And possibly some solutions as well!
