Busi­ness cli­mate

The Pak Banker - - 4EDITORIAL -

IT is now agreed on all hands that Pak­istan is on the right eco­nomic track and its busi­ness cli­mate is grad­u­ally im­prov­ing. An ev­i­dence of this is a string of state­ments from in­ter­na­tional bod­ies laud­ing Pak­istan's eco­nomic achieve­ments. Dur­ing his re­cent visit, World Bank Pres­i­dent Jim Yong Kim stated that Pak­istan is poised to be­come the next fast­grow­ing suc­cess­ful econ­omy due to vi­tal mea­sures taken by the govern­ment over the past few years.

While ad­dress­ing a meet­ing on the govern­ment's eco­nomic per­for­mance, he pointed out that the coun­try has made sig­nif­i­cant strides to achieve macro-eco­nomic sta­bil­ity and in­creased its rev­enues by in­tro­duc­ing re­forms in the tax sys­tem. Mr. Jim Yong Kim es­pe­cially un­der­lined the fact that Pak­istan has taken a num­ber of steps to im­prove the busi­ness cli­mate in the coun­try. The econ­omy of Pak­istan, he said, would see fur­ther growth with peace and sta­bil­ity and fur­ther im­prove­ment in the in­vest­ment cli­mate. He as­sured that the World Bank, as a part­ner, will con­tinue to sup­port the govern­ment's ini­tia­tives to bol­ster eco­nomic growth and pro­vide as­sis­tance in the re­quired ar­eas.

The same con­clu­sion has been drawn by a sur­vey of the Over­seas In­vestors Cham­bers of Com­merce and In­dus­try (OICCI) whose re­sults show that more than half of the multi­na­tion­als op­er­at­ing in Pak­istan be­lieve that the busi­ness cli­mate in the coun­try is bet­ter com­pared to other 10 re­gional coun­tries, in­clud­ing Sri Lanka, Bangladesh, Philip­pines and Viet­nam.

Com­ment­ing on the sur­vey re­sults, the OICCI Pres­i­dent said that they were very en­cour­ag­ing and re­flected im­proved and pos­i­tive sen­ti­ment of the mem­bers of the OICCI - an as­so­ci­a­tion that rep­re­sents over 195 multi­na­tion­als op­er­at­ing in Pak­istan. Ac­cord­ing to him, about 82% re­spon­dents have stated that they fore­see con­tin­u­ing growth in their busi­ness and that they are gen­er­ally com­mit­ted to mak­ing fur­ther in­vest­ment in Pak­istan. Nearly 60% of the re­spon­dents in­di­cated plans to make new in­vest­ments, while over 80% plan to in­vest more or sim­i­lar amounts over the next one to five years, as com­pared to the in­vest­ments they made in the pre­vi­ous cor­re­spond­ing pe­riod. Need­less to say, the planned in­vest­ment in busi­ness and hu­man cap­i­tal is ex­pected to boost rev­enue and prof­itabil­ity, as 84% of the re­spon­dents ex­pect in­creased sales and 79% ex­pect their prof­its to rise.

An in­crease in in­vest­ment is good news for the youth en­ter­ing the job mar­ket with more than half of the re­spon­dents in­di­cat­ing that they will add to their em­ploy­ment level. How­ever, in the midst of pos­i­tive de­vel­op­ments, there are con­cerns among busi­ness­men about some aspects of do­ing busi­ness in Pak­istan. They have in­di­cated that more sup­port from cer­tain govern­ment min­istries and reg­u­la­tory bod­ies is re­quired to re­move hur­dles in their way. More than 50% of the re­spon­dents in the OICC sur­vey iden­ti­fied se­cu­rity and en­ergy short­ages as the chal­lenges they face fol­lowed by an in­creas­ing tax bur­den, slow pol­icy im­ple­men­ta­tion and lack of in­ter-gov­ern­men­tal co­or­di­na­tion.

In a re­port the World Bank has warned of the ' sub­stan­tial' fis­cal risks that Pak­istan faces. The World Bank Pres­i­dent has em­pha­sized the need to bring vi­tal­ity to the pri­vate sec­tor as this will gen­er­ate mas­sive em­ploy­ment op­por­tu­ni­ties and bring the im­pov­er­ished peo­ple out of poverty.

Dur­ing the meet­ing with Pak­istani of­fi­cials he also un­der­scored the need for more in­vest­ments in vi­tally im­por­tant so­cial sec­tors like education and health. Surely, the key to sus­tained eco­nomic growth lies in hu­man re­source de­vel­op­ment to which the govern­ment needs to pay greater at­ten­tion. Si­mul­ta­ne­ously, more ef­forts should be de­voted to im­prove the se­cu­rity sit­u­a­tion and cre­ate a con­ge­nial en­vi­ron­ment for in­vestors.

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