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Turning the Tide: Lessons from Lux and Coca-Cola
Mahtab Uddin Ahmed
24 Jun 2024, 13:24
Writer: Mahtab Uddin Ahmed
When a brand faces an attack by external factors, it is crucial to respond strategically to protect its reputation and maintain consumer trust. The two cases of Lux vs Aromatic on the Halal-Haram soap controversy and the recent boycott of Coke or pro-Israeli brands provide valuable insights into how such crises can be managed.
In the case of Lux and Aromatic, Aromatic, a new soap company, claimed that their soap was Halal because it was made from vegetable oil. They targeted Unilever's soap brands like Lux, Lifebuoy, and Rexona, which used tallow in their soap blend. By exploiting consumers' religious feelings, Aromatic gained a significant market share, leading to a substantial drop in revenue for Lever (currently known as Unilever) Bangladesh. It was the first time the company had incurred such significant losses since its inception in 1963. Unilever's internal findings revealed that the decline was also due to complacency in product quality, as their dominant market position had led to a lack of innovation and effort.
Unilever responded by declaring a crisis situation and implementing a series of strategic actions. Instead of engaging in the Halal-Haram debate, which was against their corporate policy, they focused on improving product quality. They redesigned their soap manufacturing facilities to use vegetable oil and imported soap noodles from Malaysia to react faster. Despite the time it took to implement these changes, Unilever's focus on quality and a comprehensive product relaunch for Lux and Lifebuoy eventually helped them regain their market position. In Bangladesh, marketing products based on religious sentiments was perceived to be illegal. The company made efforts to lobby at the governmental level, but these efforts proved unsuccessful due to the opposition of a powerful minister, whose reasons for opposition remain speculative. Today, the case of Aromatic remains a case study book.
On the other hand, Coca-Cola recently faced a boycott in Bangladesh for its perceived associations with pro-Israeli or pro-American sentiments. The local brand Mojo capitalized on this sentiment by aligning itself with pro-Palestinian views. Coca-Cola attempted to counter the boycott by challenging the misconceptions directly. However, their efforts backfired and became a global case overnight. A global company like Coca-Cola may consider implementing a comprehensive strategy that includes innovative and large CSR projects, promoting product quality over competition, introducing new health products, or emphasizing local contributions to the Bangladesh economy. Additionally, Coca-Cola could have strengthened their local engagement through local platforms like Coke Studio, which might have helped mitigate the negative impact. It may not have given them an immediate revenue increase, but it could possibly create a strong foundation to regain lost ground gradually.
In comparing these two cases, Unilever handled the crisis more effectively than Coca-Cola. Unilever's approach was strategic and focused on long-term sustainable solutions. By improving product quality and manufacturing processes, they addressed the root cause of consumer dissatisfaction and gradually restored their market position through a well-executed product relaunch. Coca-Cola's response was more reactive and lacked the comprehensive strategic elements that could have reinforced its brand during the boycott. A silent approach to combat the battle could have been more productive for Coke.
When a brand and its products are attacked by external threats triggered by geopolitical or religious issues, it is crucial to respond thoughtfully and strategically. Staying informed and maintaining neutrality is essential to avoid alienating any group, while transparent communication through multiple channels helps address concerns without bias. Monitoring and adapting strategies based on feedback, focusing on long-term relationships with stakeholders, and maintaining a crisis management plan ensure preparedness and resilience. They help in navigating external threats, maintain consumer trust, and protect the brand’s reputation.
The author is the ex-CEO of Robi & founder and Managing Director of BuildCon Consultancies Ltd
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UN Rights Body Concerned at Internet/Social Media Blackouts in Pakistan
The UN Human Rights Committee also called the Committee on Civil and Political Rights (CCPR) on rights violations and raised concerns at the social media surveillance, internet and social media apps blockage to maneuver general elections, religious intolerance, ban on student unions as well as curbs on the media and freedoms of expression and movement.
This happened on the second day of the review of human rights conditions in Pakistan in a meeting in Geneva on Friday.
Questions were raised by the UN committee chair on curbs on freedom of association, saying “according to information received the legislative framework at the federal and provincial levels imposes unnecessary barriers to exercise this right. We have seen in many areas the NGOs have their finances and plans inspected and all this is being used to interfere in the work of some NGOs. There are many reports that national as well international NGOs are subjected to constant investigation and harassment on the part of security operators and govt officers.”
She asked about the measures being taken for a conducive environment for the NGOs to work independently as well as laws to remove the rules that hinder their freedom of association.
The committee chair said student unions had been prohibited for more than 40 years.
“University students have to sign a sworn declaration where they reject any political activity as a basis for prerequisite for admission to a university. Similarly, Pashtun and Baloch students are subjected to arbitrary disciplinary hearings and suspensions given their political activity.” She asked about the measures to remove the prohibition on student unions and creating a conducive environment for student unions.
Child rights and anti-rape laws
The committee noted the low level of birth registration in Pakistan, saying only 42 pc of children under 5 had registered birth.
A committee member raised the matter of the recent alleged rape incident of a private college girl, saying that despite claims of anti-rape laws for protection of women, there was a recent incident of rape of a girl at the ‘Punjab Girls College’ and that the procedures were ignored there.
“What measures will the state party take to ensure that that law is properly implemented to avoid political interference?” she asked.
“The committees on juvenile justice are not operational which means there are limited operation on juvenile justice or those in police custody who have no capacity to pay for their bail. There is an absence of rehabilitation centres and programmes that violate the juvenile justice.”
A committee asked about the progress made to modify the legislation to stop the child marriages 1929 law to change the minimum age for marriage to 18 years, raising questions about the non-implementation of an order passed by the Lahore Court, ruling that the minimum age should be increased to 18 years.
Hindu and Christian girls’ conversion
The UN committee raised the issue of forced conversions, expressing shock at the magnitude of cases of Hindu and Christian girls abducted or obliged to convert to Islam, marry their abductors or relatives.
The committee rejected the number of cases to be 74 as reported by the state party, saying the actual number was much more. “Sometimes these cases don’t even reach courts and when they do, the girls are not sent back to their families but to their abductors or sent to shelter most of them don’t have necessary conditions to protect these victims. Some of these girls are exposed to sexual exploitation.”
Religious intolerance and blasphemy
A committee member pointed out that religious minorities such as Shia Muslims, Christians, Ahmadis, Hindus and Sikhs were subject to frequent attacks and threats, including accusations of blasphemy, targeted killings, lynchings, mob violence, forced conversions and desecration of places of worship.
“The society has become increasingly intolerant of religious diversity. The minorities are facing a constant threat of persecution and discrimination amid the rise of religious radicalism.”
She said the criminal law amendment act of 2023, instead of curbing sectarianism, had increased persecution of minorities and minority sects by increasing punishment for using derogatory remarks against holy persons from three years jail to life imprisonment.
“We received information two days back that Rabwa secretary of general affairs and Chiniot district administration had been informed that if Islamic signs are not removed from religious places of Ahmadis by Oct 28, the TLP would take action on its own.” The committee sought information on amendment of blasphemy law to prevent misuse of blasphemy laws.
Freedom of movement and expression
The UN rights body raised the matter of freedoms of movement and expression and the authorities’ use the exit control list to restrict freedom of movement to suppress dissent.
A member said that critics of government and human rights defenders, including Mama Qadeer, Mahrang Baloch, had faced unjustified travel restrictions. The application of restrictions must be based on clear legal grounds. The committee raised concerns at the passport applicants to obtain declaring their religion especially Ahmadi applicants required to identify as non-Muslims to obtain passports.
The committee stressed that defamation laws should be carefully implemented so that they don’t stifle freedom of expression and that imprisonment was never an appropriate penalty for defamation.
“Defamation remains a criminal offence in the PPC and the Prevention of Electronic Crime Act with penalty of imprisonment and fines.
Punjab Defamation Bill 2024 passed without stakeholders consultations raises concerns as it emphasizes prosecuting public officials and allows fine without proof of actual damage which can lead to repression or intimidation.“
It sought review of defamation provisions to align with international laws.
Curbs on the media and self-censorship
A committee member referred to the reports of Pemra exceeding its mandate and using directives as tools for censorship of journalists and media outlets and suspension of licences of news channels.
This concern has been exacerbated by the amendment to Pemra Amendment Bill which introduces definition of misinformation that may enable censorship under the guise of giving authentic news.
“Despite the enactment of protection of journalists and media professionals act three years ago implementation remains weak and commission required under the act is yet to be established. Threats, harassment, abduction violence enforced disappearances and killing of journalists are rampant, leading to self censorship.” He asked about safety measures in place for journalists and human rights defenders.
Internet outages and online surveillance
A UN committee member referred to the censorship including the frequent outages and blockage of social media apps or slower connectivity raises serious concerns about information control and violation of freedom of expression.
“In May 2023 protests, there were four days of internet blackout and social media shutdown followed by frequent outages and restrictions continuing until general elections which prevented voters from accessing polling information and limiting communication.”
She said the Prevention of Electronic Crimes Act (Peca) grants authorities power to charge individuals, particularly young people, with blasphemy based on digital media.
“It makes online defamation of authorities a crime, it allows authorities to block content and law enforcement to collect without a warrant and allows data sharing with foreign governments without legality.
We know that the intelligence service was granted power this year to conduct surveillance for national security. We have multiple examples of Peca being used for unlawful surveillance.“ She raised concerns about involvement of the cyber crime wing of the FIA in charging hundreds of young people with blasphemy based on social media content. It sought information, if any, to review the discretionary powers of surveillance to the state agencies
Bonded labour issue
The UN rights committee said that more than three million Pakistanis were trapped in forced labour, servitude and bonded labour, particularly in the farming sector, brick kilns and domestic work.
“After the floods of 2022, more people, particularly children, have been forced to work despite the national and provincial laws. How the state intends to control the menace and the steps taken to combat the forced labour and conditions of servitude including among children particularly in context of the climate change.” She also asked about the measures taken to curb the advance payment that often leads to servitude and sexual exploitation of children. She asked whether labour inspectors have got resources to carry out investigations effectively.
The Pakistani delegation, headed by Malik Muhammad Ahmad Khan, presented a report on the state of human rights in the country and replied to some of the questions raised by the committee during the review under the International Covenant on Civil and Political Rights (ICCPR).
Pakistan ratified the ICCPR in 2010 and the first review took place in 2017. It was the second one of the review on Friday.
(From Dawn)
Battling Acute Malnutrition in Pakistan
In a world wracked by conflict, severe food shortages, climate catastrophes and poorly funded healthcare systems, it is little wonder that wasting, or acute malnutrition, continues to pose a grave threat to the lives of millions of children worldwide.
This was highlighted in some detail by Unicef’s dire warning issued on October 15, revealing that globally nearly two million children suffering from severe wasting –- defined as low-weight-for-height due to inadequate and poor quality food intake -– are at risk of death due to funding shortages for life-saving Ready-to-use-Therapeutic-Food (RUTF) to treat acute malnutrition.
Alarmingly, Pakistan is among the 12 hardest hit countries in this regard as it could run out of its stock of the vital RUTF by March next year if efforts to replenish the supply of this critical resource aren’t taken immediately.
Out of the 786,000 children suffering from acute malnutrition in the country, only about one-third have received the RUTF treatment, leaving 524,000 children still at considerable risk to their lives.
The crisis appears particularly acute in Sindh as around 98 percent of children under two years of age in the province are not receiving the minimum acceptable diets required for growth and development, according to information shared by Unicef back in August.
For acutely malnourished children, RUTF –- a nutrient-rich paste that treats severe wasting in children under five –- is crucial for their survival and recovery, and to ensure its steady supply, governmental health bodies, both at the federal and provincial levels must spring into action to secure the $11.9 million funding required to acquire 300,000 cartons of this essential item to address its shortage, and then maintain glitch-free distribution channels countrywide.
Apart from this much-needed urgent step, what is also clearly required are longer term measures that go to the root of the crisis, so that severe wasting among children can be prevented from raising its ugly head in the first place. The fact remains that malnutrition among children can be directly traced back to lack of proper maternal nutrition, something which is fundamental to both maternal and child well-being.
Children born to malnourished mothers are at greater risk of acute malnutrition, cognitive limitations, weakened immunity, and a higher likelihood of illness and mortality throughout their lives. According to figures cited in Pakistan Maternal Nutrition Strategy 2022-27, 18 percent of married women of reproductive age suffer from nutrient deficiencies, leading to 44 percent of children experiencing stunted growth.
From insufficient household food security and poor access to quality healthcare, to food systems that are clearly falling short in delivering sufficient and diverse diets for women and children, these factors are collectively exacerbating the malnutrition crisis.
On top of that, patriarchal structures prevalent in many households ensure that there is discrimination in the way food and resources are allocated to women and girls. Ultimately, it is poverty, gender inequality, low education levels, and the limited autonomy of women in making decisions regarding their reproductive health that serve as significant barriers to addressing acute malnutrition.
In order to overcome the challenge posed by severe wasting among children, a multi-faceted approach is essential. Apart from strengthening access to quality healthcare services to provide critical maternal and child health support, urgent efforts are required to improve access to nutritious foods by enhancing local food systems and agricultural practices in order to ensure food security at the household level.
It is also important to realise that promoting education, particularly for women and girls, empowers families to make informed dietary and life choices. Finally, addressing gender inequality and ensuring equitable distribution of resources can significantly improve nutrition outcomes, which can help foster a healthier future for our children.
(Source: Business Recorder)
BRICS Model: An Alternative to Western Hegemony
From October 22–24, 2024, the BRICS summit in Kazan, Russia, has launched a new chapter in world politics. Over time, additional nations have joined the BRICS alliance, giving it worldwide influence. Egypt, Ethiopia, Iran, and the UAE joined the alliance, pushing it to six from five: South Africa, Brazil, Russia, India, and China. BRICS has grown beyond an economic partnership, indicating political, economic, and geopolitical power.
The rise of BRICS has polarised world politics. The West has traditionally dominated the world's economy and politics. Western rules govern the World Bank, IMF, and WTO, which the US and Europe lead.
In contrast to this hegemonic framework, the BRICS and other Global South members want to strengthen and gain autonomy. The BRICS group wants a more varied global economy and less Western financial domination. Russia and China have vocally opposed the US-led system, while Brazil and India have taken a more moderate approach. Despite these conflicts, the alliance has developed a new development strategy that may challenge Western supremacy.
Many more individuals joined the BRICS due to its expansion. The BRICS Plus population is over 46% of the world total, more significant than the Group of 7. This worldwide alliance is growing economically and threatening the Group of Seven in politics and strategy. Despite challenges, progress has occurred. Member states' differing strategic and political viewpoints threaten the treaty's coherence. Russia and China have vocally opposed Western supremacy, while India and Brazil have maintained more moderate and diplomatic relations. Coalition disagreements and lack of consensus may ensue.
The BRICS development model threatens Western economic supremacy.
The Western model prioritizes profit and the market, whereas the BRICS model emphasizes cooperation, sustainability, and local capacity. BRICS countries are strengthening their social and economic systems as part of their development efforts. This strategy aims to become self-sufficient by utilizing local resources, creating a long-term economic basis via international partnerships, and helping poor countries.
Economic autonomy is becoming increasingly vital to BRICS countries. The ongoing attempt to establish SWIFT-competitive payment systems is one example. It would allow Moscow to trade with allies and avoid Western sanctions. BRICS members are also launching new measures to boost trade and economic integration. Russia and China have increased strategic cooperation despite Western sanctions. Significant development. Thus, economic and geopolitical divisions against Western unilateralism have emerged.
The Western alliance worries about the BRICS' expansion and Russia-China rapprochement. Western analysts worry about Xi Jinping's close relations with Vladimir Putin and the BRICS' growth under his leadership. Putin and Xi proclaimed a "borderless partnership" in 2022 before invading Ukraine to strengthen their strategic position against Western sanctions. Putin and Jinping's rapprochement at the summit showed they're ready to challenge American supremacy. Political, military, and economic cooperation is essential. Russia and China seek to use the BRICS alliance to take over Global South states and enhance their collaboration against Western powers.
BRICS development arose in resistance to Western domination. However, all member states will need hard work, thoughtful planning, and cooperation to fulfill their aims. After decades of Western dominance in global politics and economics, BRICS and other alternative models may usher in a new age. Once subject to Western political control, BRICS may protect the advancement of the Global South. However, this partnership has challenges. Divergent perspectives, tactics, and internal issues will make BRICS unity difficult. Time will tell how the bloc's competitive rivalry and partnership with the West develops.
To counter Western domination, the BRICS development model was created. It allows southern countries strategic and economic sovereignty. The alliance's internal issues and global political context need member governments to cooperate and demonstrate political will to succeed. The BRICS alliance might move global power away from the West towards a more cooperative, multilateral, and sustainable global economy, allowing South countries more excellent voices over their future.
The writer is the former Chairman, Department of International Relations, University of Chittagong, Bangladesh and Non-resident Fellow, Hong Kong Research Center for Asian Studies (RCAS)
The Israeli-Iranian Conflict: A Pathway to Regional Warfare
Israel launched a counterattack a few weeks after Iran's October 1 strike. In retaliation for Israel's brutal assaults on Gaza and Lebanon, as well as the assassinations of leaders of Hamas and Hezbollah, Iran has launched approximately 200 missiles against Israel.
The most recent confrontation between Iran and Israel is, first and foremost, a war between two nations; second, it may have ramifications for the whole Middle East. In what it saw as a self-defense operation, Israel recently attacked Iran, killing four of its troops. Iran, on the other hand, has said it will continue to resist Israeli attacks on Gaza, Lebanon, and its people.
This situation indicates a long-term regional conflict in the Middle East that could cause deep concern to the international community. It is the first time Israel has accepted responsibility for the attack on Iran, and Defense Minister Benjamin Netanyahu approved the plan at a cabinet meeting. Israeli media reported that Iran had been warned before the attack.
However, despite the warning, Iran did not react. Instead, the attack created more tension. Israel claims its attack was only on military installations. However, this is not just a retaliatory move; Israel's primary goal is to signal to Iran that Israel is ready to counter any Iranian military action. Such an aggressive move would not only escalate the Iran-Israel conflict but could lead to a broader war.
Iran has directly denied the Israeli attack and has made it clear that it is committed to resisting Israeli attacks on territories it supports, including Gaza and Lebanon. Iran's commitment shows that its response encompasses not only Israel but the entire region. The White House spokesman said the United States was not directly involved in the attack. However, US foreign policy has been made abundantly clear in Israel's recent strategy.
The visit of US Secretary of State Antony J. Blinken to Israel and Saudi Arabia was a pivotal moment preceding the conflict. The situation in the Middle East has become more heated after the disclosure of secret US-Israeli joint strategy documents on the strategy to attack Iran. The assault on Iran occurred promptly following Blinken's visit, leading to the inference that the incident is linked to his trip to Israel. Despite this declaration, many people think that without the direct or indirect support of the United States, Israel could not have played such a bold role in carrying out the attack.
This ongoing tension between Israel and Iran will not be limited to their bilateral conflict but could spill over into the broader Middle East. The crisis was exacerbated by Israeli military operations against Iran amid anti-Hamas and Hezbollah operations. It may not be limited to the conflict between Iran and Israel but may have broader regional implications.
Especially if significant powers such as China and Russia get involved in the conflict, the possibility of a terrible humanitarian catastrophe is high. In this situation, if countries such as Egypt, Qatar, and Saudi Arabia fail to take any action to bring peace to the region, the entire Middle East may become involved in an inevitable war. Meanwhile, the ceasefire brokered by Egypt once again proves that Arab countries are still optimistic about peace in the Middle East.
The assault by Israel on Iran not only intensifies the existing tensions between the two nations but also engenders the potential for a protracted crisis throughout the entire region. Israel's attack on Iran not only exacerbates the Israel between the two countries but also creates the possibility of a long-term crisis in the entire region. Although this attack is limited to military installations, the consequences could be more profound.
The Middle East will be rugged if the conflict spreads and other countries become involved. The situation will become more complicated if powers such as the United States and Russia play a more active role in resolving the conflict. The invasion of Iran, supported by the United States and executed by Israel, has not merely impeded the progress of peace negotiations in the Middle East; it is also steering the region towards an impending and extended conflict.
The writer is the former Chairman, Department of International Relations, University of Chittagong, Bangladesh and Non-resident Fellow, Hong Kong Research Center for Asian Studies (RCAS)
No War if Trump Wins: A Realistic Promise or Political Move?
The basis of U.S. foreign policy is the realism theory, which determines the country's ultimate position in influencing the world stage and protecting its interests. The main goal of U.S. foreign policy is to protect U.S. interests and influence in the international arena. This policy, based on the pragmatism theory, considers war a necessary and effective solution.
However, contrary to this idea, former President Donald Trump's anti-war stance has been impressive, taking the form of a critical promise in recent campaigns. If elected, the United States will no longer engage in war. Trump, who first came to power in 2016, introduced a new model of international relations.
In addition to conventional diplomatic techniques, he spoke directly with Russian President Vladimir Putin and North Korea's Kim Jong Un. Although many have criticized his actions, Trump has not directly involved the United States in any new wars during his term in office. With a limited military presence in Syria, including the withdrawal of troops from Afghanistan, I wanted to show that the use of U.S. forces is not the solution to all problems. However, the question remains whether these measures were limited to a political move or whether they were trying to establish peace in the world.
The realism theory in American foreign policy cannot be ignored in analyzing Trump's promises. Pursuing a foreign policy based on this theory has had a similar impact on all American presidents as war. Does Trump's aversion to war agree with the theory of realism? Or is it just a strategy to strengthen his political position? Trump may be trying to increase his popularity by emphasizing diplomatic relations rather than solving problems through war. He says that he will solve the Ukraine and Gaza crises if elected.
Even so, based on the realism theory, how possible is it to fulfill such a promise? To what extent would the United States of America lose its influence if it altogether avoided war in world politics? These questions remain. Trump recently said in his campaign that he wants to resolve the Ukraine and Gaza crises first.
All the same, will Trump adopt a new strategy to resolve such a crisis, or will he just get drunk on wordplay? U.S. President Joe Biden has taken a strong stance in favor of Ukraine and supported the country militarily and economically. In contrast, Trump's position is quite different. He said that wars have become an unnecessary economic burden on the American people. Trump may be trying to present himself as the leader of the masses with this promise, but it remains to be seen how genuine his statement is.
Trump has promised not to wage another war in the Middle East if the United States comes to power. Given the current situation in the Middle East, a heated situation prevails, with Iran and Israel on the verge of war. At the same time, U.S. allies Saudi Arabia and Israel also maintain their interests. Is Trump's promise just a political ploy to bring peace to the Middle East, or can he restore peace in the region? Is Trump's aversion to war a sign of declining American power?
The United States has long demonstrated its power in world politics, and this demonstration of power has increased its influence. If Trump withdraws from the war, the U.S.'s influence in world politics will decline. Many political analysts believe that Trump's promise is just a ploy to attract voters. If such a promise is fulfilled, it will only be a sign of declining American power, which is inconsistent with his long-term strategy.
The American people today are tired of war and are no longer interested in sending their sons to fight abroad. But does Trump want to win the hearts of voters, or is he willing to build a peaceful world? The issue has become essential to Trump's election campaign, which could also affect his political record.
Trump's "no war" pledge created a new landscape in American politics. It could change the status quo of U.S. foreign policy, but only if implemented correctly. The current global situation, especially the heated situation in the Middle East and Ukraine, has raised many questions about this promise of Trump.
Finally, such promises may only serve as a strategy to gain voters' trust. If Trump truly wants to build a peaceful world, he must deliver on his promises and bring about a concerted change in U.S. foreign policy. It can be a great challenge for him to go beyond war, establish diplomatic relations, and mediate disputes. Therefore, only time will tell if this promise materializes.
The writer is the former Chairman, Department of International Relations, University of Chittagong, Bangladesh and Non-resident Fellow, Hong Kong Research Center for Asian Studies (RCAS)
Pakistan's Plans to Convert Public Universities into Corporate Entities Invites Red Flag
In recent years, Pakistan has faced growing challenges in its higher education sector, with public universities struggling to cope with financial constraints, limited resources, and inadequate governance.
To address these issues, the Pakistani government is reportedly working on a ‘transformation plan’ aimed at converting public universities into self-sustainable corporate entities. The move seeks to modernize the higher education landscape by adopting corporate models of governance, finance, and management, thereby ensuring that universities become more autonomous, efficient, and capable of sustaining themselves in an increasingly competitive world. While this transformation plan has generated considerable debate, it is a critical step towards addressing the persistent challenges plaguing Pakistan’s education system.
As the country grapples with fiscal challenges and competing demands on government expenditure, public universities must adapt to a changing environment. The transformation plan may offer a solution, but it also raises significant concerns and challenges, especially regarding equity, academic freedom, and quality assurance. According to a recent report by Pakistan’s leading English daily Dawn, a ‘transformation plan’ is being developed to turn public universities into "self-sustainable corporate entities," following recommendations from an international lending agency.
While the idea of reforming public universities is not inherently flawed, as many of these institutions have been grappling with prolonged financial difficulties, there are significant concerns about the direction of these changes. Many universities have been able to function only because of funding injections from the Higher Education Commission (HEC), and without this support, they would likely face severe operational challenges. As per a Dawn editorial, what raises alarm is the potential shift in these institutions’ focus—from providing accessible education for students from lower-income households to becoming profit-driven entities.
For many students, public universities are the only affordable option, as the fees for private institutions are out of reach. If these universities become financially independent by raising fees or prioritizing revenue generation, access to higher education for underprivileged students could be severely threatened. The proposed transformation does include some positive changes, such as enhancing the quality of education and streamlining administrative processes.
In some universities, office staff outnumber the students, indicating a clear need for administrative restructuring. However, the most concerning aspect of the plan is the suggestion to eliminate federal and provincial funding entirely, placing the financial burden on students by raising fees. This would effectively shut the doors of higher education for many students from economically disadvantaged backgrounds, according to the editorial.
The rationale behind the transformation plan
The need for reform in Pakistan’s public universities stems from multiple factors. For decades, these institutions have been heavily reliant on government funding, which has often been inadequate, irregular, and tied to political priorities. As a result, many public universities face budget deficits, resource shortages, and an inability to meet rising student enrollment demands. Meanwhile, the cost of delivering high-quality education continues to rise, exacerbating the financial burden on these institutions. In addition to financial constraints, public universities in Pakistan often struggle with issues of governance, inefficiency, and bureaucratic interference. The administrative structure of many universities is complex, with multiple layers of decision-making that can hinder effective management and innovation. Moreover, public universities are often subject to government oversight and regulation, limiting their autonomy in academic, financial, and administrative matters. This dependence on government intervention makes it difficult for universities to implement long-term strategic plans, adapt to changing market needs, or invest in innovative research and development initiatives. The transformation plan seeks to address these challenges by shifting the public university model from a state-dependent entity to a more corporate-like structure, where institutions can operate independently, generate their revenue, and manage their affairs with greater autonomy. By adopting a self-sustainable corporate model, universities would be empowered to make financial and administrative decisions, form partnerships with private industries, and attract investments for research and development. This would reduce their reliance on government funding, enabling them to become more flexible, innovative, and responsive to the needs of students and the labor market.
Challenges and concerns
While Pakistan’s proposed transformation plan to convert public universities into self-sustainable corporate entities offers the potential for greater autonomy, financial sustainability, and innovation, it also presents significant concerns and challenges.
Equity and access:
A shift towards a self-sustaining model may lead to higher tuition fees, potentially limiting access to higher education for students from low-income backgrounds. Ensuring that education remains affordable and accessible to all sections of society will be a critical challenge for policymakers.
Academic freedom:
The adoption of a corporate governance model may risk undermining academic freedom, as universities could become more focused on profitability and market-driven goals. Striking a balance between financial sustainability and preserving the core values of academia, such as critical thinking and intellectual inquiry, will be essential.
Quality assurance:
As universities seek to become more competitive and financially independent, there is a risk that quality standards may be compromised. Ensuring that universities maintain rigorous academic standards while pursuing financial goals will require robust quality assurance mechanisms. The proposed plan seems to imply that only those with financial means should have access to higher education.
This notion is fundamentally incompatible with the goal of building an egalitarian and educated society. While there is certainly merit in improving the financial health of public universities, it is essential to recognize the broader implications of such a transformation. Over the past two decades, Pakistan has witnessed a rapid increase in the number of universities, but this growth has not been matched by a corresponding rise in academic standards.
Additionally, public universities should not become bloated employment hubs filled with excess staff. Instead, they should focus on leaner administrative operations and consider alternative revenue sources. However, the idea of cutting off all government funding entirely is unacceptable and must be opposed by the state, according to the Dawn editorial.
In a time when many Pakistani families are already struggling to make ends meet, any significant increase in tuition fees would likely force countless bright students to abandon their dreams of higher education, as per the editorial. While financial reform in the higher education sector is certainly necessary, public universities should not be turned into for-profit entities at the cost of access and opportunity for students from lower-income backgrounds, the editorial read.
(Source: Nepal Pana)
Pakistan’s Debt Spiral: Challenge to Economy
Recently, Pakistan secured the first tranche of the IMF-led bailout package, highlighting the diplomatic success of the incumbent government and Foreign Office. This development has eased some economic burdens and fostered optimism among investors. ADB Country Director for Pakistan, Yong Ye, noted that “Pakistan’s economy is showing signs of a gradual recovery supported by higher crop output and improvement in manufacturing.” Also Pakistan’s successful hosting of the Shanghai Cooperation Organization (SCO) summit underscores its strategic importance and commitment to regional cooperation in addressing pressing economic challenges.
This, coupled with the recent International Monetary Fund (IMF) bailout, highlights the urgent need for collaborative efforts to navigate Pakistan’s escalating debt crisis and support sustainable long-term economic recovery. However, significant challenges remain, with the IMF describing the country’s external debt repayment capacity as “fragile.” The IMF’s assessment reveals external financing needs of $62.6 billion over the next three years under the Extended Fund Facility (EFF) program, projected to reach $110.5 billion from 2024-25 to 2028-29. These figures underscore the urgent need for timely reforms to ensure Pakistan’s economic stability and growth.
The IMF projects Pakistan’s external financing needs at $18.813 billion for the current fiscal year, escalating to $20.088 billion in 2025-26 and $23.714 billion in 2026-27. What’s particularly troubling is that even after the completion of the 3-year programme, there appears to be no respite in sight. The financing needs are expected to remain astronomically high, standing at $24.625 billion in fiscal year 2027-28 and $23.235 billion in 2028-29. These figures are not just numbers, they represent looming crises that threaten to engulf Pakistan’s economy.
Instead of addressing the root causes of its economic woes, Pakistan has relied heavily on external borrowing, creating a vicious cycle of debt that seems increasingly difficult to break. The IMF’s assessment highlights Pakistan’s economic challenges, pointing to missed opportunities for structural reforms and reliance on short-term measures. Misallocation of resources has worsened vulnerabilities, while essential sectors like education, healthcare and infrastructure remain underfunded. This imbalance hampers economic growth and deepens social inequalities, underscoring the need for a shift in policy priorities.
Pakistan’s energy sector remains a major economic burden, struggling with inefficiencies, circular debt and unsustainable subsidies. Despite IMF programs, focusing on energy tariff hikes without addressing structural issues may raise production costs and weaken the country’s export competitiveness further. The tax system in Pakistan is another area of grave concern. With tax revenues at a mere 12% of GDP, while expenditure hovers around 20%, the country’s fiscal deficit continues to widen. The new IMF program pushes for additional tax measures equivalent to 3% points of GDP, but these measures are likely to face significant political resistance.
More importantly, they fail to address the fundamental issues of tax evasion, a narrow tax base and the presence of powerful lobbies that continue to enjoy tax exemptions. Pakistan’s recurring balance of payment crisis reflects deeper structural issues in its economy, including a narrow, undiversified export base vulnerable to external shocks. Foreign direct investment has declined due to security concerns, policy inconsistencies and a difficult business environment. While remittances remain significant, they are not a sustainable long-term solution. The latest $7 billion IMF bailout, Pakistan’s 25th, offers short-term relief but fails to address underlying problems. Without tackling these long-term structural challenges, Pakistan remains stuck in a cycle of economic crisis and external dependence.
One of the most pressing concerns is Pakistan’s mounting debt burden. With interest payments consuming a staggering 68% of tax revenue in FY 2023, the country is caught in a debt trap that severely limits its ability to invest in productive sectors. The IMF’s projection of gross external financing needs of up to $146 billion for FY 2024 to FY 2029 underscores the magnitude of the challenge ahead. Merely lurching from one IMF program to another without addressing the underlying issues will only prolong the country’s economic agony.
What Pakistan needs is a comprehensive, home-grown economic reform agenda that goes beyond the prescriptions of international financial institutions. Such an agenda should focus on diversifying the export base, improving the ease of doing business, rationalizing government expenditure and broadening the tax base. It must also include bold measures to reform state-owned enterprises, tackle corruption and improve governance. Most importantly, it should prioritize investment in human capital and infrastructure to lay the foundation for sustainable, long-term growth.
The political leadership must also muster the courage to make tough decisions, even if they are unpopular in the short term. This includes phasing out unsustainable subsidies, particularly in the energy sector and implementing a more progressive taxation system that ensures the wealthy pay their fair share. Furthermore, Pakistan needs to seriously consider the option of debt restructuring. While this comes with its own set of challenges, it may be necessary to create fiscal space for much-needed developmental expenditure.
Pakistan stands at a critical juncture. The IMF’s latest assessment serves as a stark warning of the economic catastrophe that awaits if decisive action is not taken. The country’s leadership must focus on implementing deep-rooted, structural reforms. Failure to do so risks not just economic stagnation, but potentially a full-blown economic collapse that could have severe social and political repercussions. The time for half-measures and stopgap solutions is over. Pakistan must act now or risk being trapped in a cycle of debt and dependency for generations to come.
(Source: Pakistan Observer)
