performing firms in the energy, communications and financial sectors, and among consumer
products based multinational corporations. By contrast, the predominant number of scrips in the
textile sector, representing Pakistan’s largest industry, remained well below par value, and in
many cases 70-80% below. This desuetude reflected the failure of Pakistani industrial
entrepreneurs to meet their obligations to the capital markets. They were able to make a once
off resource gain, through a double take on bank loans and public share subscriptions, but failed
to reciprocate with dividend payments, bonus or rights share issues. They could, of course,
repeat the process through new share floats, if the diminishing returns on reputations are
allowed. Hence business ‘groups’ ended up with several independent companies, rather than as
corporatized entities. Also, uncontrolled insider trading, apparently with the connivance of
politically well placed elements, was allegedly responsible for the wild fluctuations in the share
index that periodically convulsed the stock market. During this time some of the major brokers
established their own investment banks, and indeed emerged as the new super rich of the
country.
The economic turnaround, however, might not be entirely a function of financial inflows induced
by overseas insecurities over monetary accountability. As I have discussed elsewhere:
“Conversely, it could be argued that the money flows into Pakistan had a more
positive dimension. They could only partly be explained through insecurities in
overseas quarters over money accountability. They also reflected the
undervalued levels of the Pakistani share and real estate markets, and were a
response to a favorable investment environment. Moreover, the liberalisation
since the 1990s of financial and currency markets, and the major concessions
given to foreign investors, such as 100 percent equity and full remittance of
profits, were bound to produce results. More business friendly public policy
approaches were also designed to stimulate both domestic and foreign
investment, through a series of conducive measures, such as export rebates,
concessionary import duties on capital goods and industrial raw materials,
removal of wealth and capital gains taxes, and control over progressive rates of
corporate and individual income taxes. The investment spurt only awaited a
more politically stable environment, and this was not forthcoming in the 1990s,
owing to internal political factors and Pakistan’s external image. After 2001 the
greater acceptance of the Musharraf regime by the international community
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