A Small Club: Distribution, Power and Networks in Financial Markets of Pakistan

“For all practical purposes, the 22 families had preempted most investment permits, import licenses, foreign credits and government patronage because they controlled or influenced most of the decision-making forums handing out such permissions. They had virtually established a stranglehold on the system and were in a position to keep out any new entrepreneurs. The 22 families were a by-product of government policies and a primitive capitalistic system. The Government did not have the courage to change the company law of 1913 under which the industrial sector of Pakistan was still being governed in 1968. This antiquated framework of capital permitted the industrial sector to have managing agencies, cartels, trusts and all other antisocial practices aimed at cheating both the consumer and the Government. The latter became both a conscious and unconscious ally of the private industrialists by giving them generous protection, excessive tax concessions, explicit and hidden subsidies, and representation on many decision making forums.”