How companies in Pakistan are working through a national crisis

By Karuna Kumar

“There seems to be some confusion about what’s going on here. About 1/5th of Pakistan is now submerged under water and 1/4th of Pakistan is in ruins,” exclaims Omar Salim Khan, an agriculturist in Lahore, Pakistan.

The scale of the floods that struck Pakistan earlier this month has been monumental. Monsoons, flash flooding and landslides have conspired to bring massive devastation to the soils of Pakistan. The devastation has been so dramatic that the U.N. Headquarters in Geneva are on a wild goose chase ascertaining the number of people that need help. Pakistan’s government has claimed that over 20 million people have been affected; the UN places the number at 6 to 8 million who are in need of immediate assistance.

Waters continue to rise and the ruthless tides continue to swamp more districts in the south. Among battered ruins, the homeless and the hungry make their way through the thick sludge; if that’s not grim enough, bouts of bomb blasts plague regions close to the Afghan border amid the devastation.

Pakistan in crisis

The situation in Pakistan is anything but stable.

“This is a major economic crisis and affects a big chunk of the industry. It is very worrisome for the commercial and agricultural banks in particular that have given out loans to many farmers. With the already high inflation rates, the current disaster brings forth a situation that is fraught with peril,” explains Khan.

Pakistan’s national grid is a major source of power for most companies in Pakistan. However, due to its unreliable nature, companies depend on generators for their power supply, which increases their production costs. Due to high inflation rates, the cost cannot be passed onto consumers and needs to be absorbed by the business, leading to losses. This is a major source of concern for employees of most businesses in Pakistan as their salaries bear the brunt of it.

Currently there is a growing pressure from the IMF to introduce major economic reforms in exchange for a multi-billion dollar bail out package. The basis of sanctioning the bail out package is a reduction in electricity tariffs, which is met with much reluctance by the Pakistani authorities. On the other hand, a popular view is that structural reforms, made a few years ago, have brought financial stability to the business environment in Pakistan.

External influences the internal

Such instability in the external environment has led to ramifications on the internal working and operations of businesses. Employees, the human capital, are at the core of this disaster. Submerged in agony and fear, they are expected to continue work as usual so as to maintain production efficiencies and in turn help the Pakistani government.

If one trait stands out in the Pakistani culture, it is resilience. Observing Tetra Pak in Pakistan, a global packaging firm gives a true picture of what it means to carry on with business in a state ravaged by flooding and its aftermath.

Case Study : Tetra Pak, Pakistan

“Tetra Pak’s business, like other businesses around the country, is affected as our customers are facing problems in product distribution, milk collection and shelf offtake. The Pakistani government, in light of the crisis, has reduced GDP growth forecast by half percent and that will in general result in slower growth in this fiscal year. However, it is hard to gauge the extent of the damage at this point in time,” says Sobia Aslam, Communications Manager at Tetra Pak, Pakistan.

Tetra Pak has donated €100,000 in kind to the flood victims. The company is donating this money in the form of packaged milk and distributing it with the help of its customers. It is also working with Pakistan Poverty Fund and distributing their products under staff supervision.

Sobia adds, “Tetra Pak Pakistan’s employees are saddened by this unfortunate disaster and are very supportive of relief efforts. Employees, realizing the magnitude of the crisis, have donated 2 days’ salary for this purpose, in addition to direct personal contributions.”

Responding to the question of how the current situation has affected the internal working of business in Pakistan, Azhar Ali Syed, Managing Director of the multi-national packaging firm says, “We are finding it difficult to bring in expatriate staff to Pakistan for short or long-term assignments due to real and perceived security threats. On the one hand, it is making it difficult for us to provide world-class service to our customers but on the other hand, we have increased the pace of developing local talent to handle more complex and specialized tasks.”

In some cases, for reasons more obvious than not, the impact on blue-collar employees is greater in terms of the high food inflation and the energy crisis resulting in load shedding. However, Tetra Pak is trying to reduce the financial burden on low-income groups through fair remuneration packages. The security situation, that has affected all employees alike, is yet another problem that Tetra Pak is trying to deal with.

In this hour of agony, motivating employees, encouraging them to get to work and maintaining internal efficiency is crucial for Tetra Pak in Pakistan. To this, Sobia says, “Communicating with employees at this critical time is imperative and the management has made sure that employees know about what is being done in terms of relief efforts and that they are involved in the activities themselves. The senior management has been sending weekly reports on the floods to lower management, sharing updates and their impact with all employees.”

Syed adds, “We have taken a number of measures for workers’ safety and comfort at the work place. We are involving all employees in the continuous improvement of the working environment.”

The other side of the picture

While the management at Tetra Pak seems to be in control of the situation, many people like Saulat Raza, a businessman from Jhang Punjab who works for the government, are in deep agony. Grappling with the immediate misfortunes of the floods, he expresses his quandary:

“I am facing major problems in getting on with my business. There is a lack of electricity and raw materials. The communication networks have also been damaged. My employees are unable to get to work. Of those who do get to work, I’m unable to provide them any salaries for the work they do. I fear losing them as I’m unable to provide them any job security,” Raza says.

He points out, “Employees at big companies are more relaxed as those companies are financially stable. Employees of national companies are worried as their jobs are at stake.”

These floods have affected about 13% of the entire population of the country. This grim number includes nine million children who are directly suffering. Khan says, “A big shortfall in crops this year will result in importation and loss of foreign exchange leading to a rise in local prices, that are already stifling the common man. The KSE and LSE indices are already sliding due to these developments.”

United we Stand, Divided we Fall

A strange thing about disaster is that it brings people together. Marc Wright, a global communication consultant recalls, “I remember when we were doing some comms audits with Barloworld in South Africa in the late ‘90s.  It was the early days of the new South Africa and violence in parts of Johannesburg was endemic.  We discovered that staff loved coming to work because they knew that they were not going to be shot at or mugged once they got into the compounds of the company. It is a sobering thought that in times of social change the workplace can become the only stable haven in people’s lives.”

A few drops of optimism inundate this dismal picture. Unity and the pertinence of the phrase – “United we Stand, Divided we Fall’ has awakened the people of Pakistan. Across varied industries, employees are working together to fight tough work environments and overcome this disaster. Sobia, Syed, Khan and Raza share an optimistic outlook of swimming through these tough tides and reaching the safe shores in good time.

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