WEB DESK: It is good to see that government of Pakistan has been interacting very closely with the Overseas Investors Chamber of Commerce and Industry (OICCI) to know their point of view about the flow of investment into the country. During a meeting in Islamabad with the Prime Minister on 13th January, 2016, the OICCI revealed that foreign investors were planning to invest around dollar 3 billion over the next few years in the country.
However, more than 50 percent of the offshore investors had identified security, law and order situation and energy crisis as the biggest challenges they were facing in the country. Increasing tax burden, policy implementation and lack of inter-governmental co-ordination were other negatives. The Chamber’s managing committee also discussed the results of the OICCI’s Perception and Investment Survey, 2015, and informed the Prime Minister that “the overall results of the Survey were very encouraging and reflected improved and positive sentiment of the members of the OICCI”.
Nonetheless, more support from certain government ministries and regulatory bodies was required. The good news was that the Survey indicated continued growth in the economy which would increase employment, with more than half of the respondents indicating that they would add to their employment base. Moreover, the planned investment in business and human capital was expected to boost revenues and profitability, as 84 percent of the respondents were expecting increases in their sales and 79 percent expected to raise their profits. Comparing Pakistan’s business climate with its 10 regional peers, more than half the respondents gave a higher rating to Pakistan as compared to Sri Lanka, Bangladesh, the Philippines and Vietnam.
To say that foreign investment is very crucial for economic growth and the government is very anxious in accelerating its inflow into the country is stating the obvious. In this connection, the present government has done almost all it can and made the right moves to attract foreign investment that is necessary in view of low domestic saving and investment rates. The need for such an effort has increased manifold in recent years due to a dwindling share of foreign savings from 8.6 percent in 2007-08 to less than one percent in 2014-15 in total investment. Thankfully, the Prime Minister, realising the importance of such an effort, has himself been involved in creating an investment-friendly policy and a proper regulatory environment.
The present interaction between the OICCI and the Prime Minister accompanied by Federal Finance Minister, Commerce Minister and the Chairman, Board of Investment would, hopefully, be useful in bringing the problems of foreign investors to the fore and help the government in solving those problems. In our view, the forum of the OICCI has been very tactful in highlighting their grievances while appreciating some of the gains made by the present government. Expecting foreign investment of around dollar 3 billion over the next few years (without specifying the exact number of years); the OICCI seems to state that, given the existing environment for FDI, the flow of foreign investment is not likely to show a substantial increase and contribute a great deal to the economic development of the country.
The OICCI also hit the nail on the head by asserting that foreign investors had identified security, law and order issues, energy crisis, increasing tax burden and lack of inter-governmental co-ordination as challenges and negatives. Seen closely, all these difficulties cannot be removed in a short period of time and thus foreign investors would remain wary of the situation for a long period of time. We could only hope that, after the meeting on 13th January, the Prime Minister and his team would now be more aware of the problems of foreign investors and try to rectify the situation as early as possible to make the current environment in the country more conducive to foreign investment.
Source: Business Recorder