Foreign investors cheer growth with caution
Foreign investors expressed confidence over growth and sustainability of Pakistan’s economy, although they are concerned about poor infrastructure and lack of policy implementation, a survey said.
The Overseas Investors Chamber of Commerce and Industry (OICCI), an umbrella of foreign and multinational companies, said the overall score of its 12th Wave of Business Confidence Index (BCI) survey reflects a remarkable level of bullishness by the overall business community throughout the country.
“The business community is generally satisfied with the sustainability and is quite pleased with the resolve of the authorities in effectively tackling law and order situation, mainly in Karachi and northern areas,” a statement quoted OICCI President Shahab Rizvi as saying.
“The reduced cost of doing business due to reduction in petroleum product prices, low single digit inflation and borrowing rates and expectations of better economic condition following CPEC (China-Pakistan Economic Corridor) and other ongoing energy projects based on coal and LNG (liquefied natural gas) may have also contributed in boosting the confidence of the business community to a record level.”
The statement, however, said improvement in BCI was not one directional as several respondents expressed their concerns on the same factors, which were viewed favourably by the majority.
“Moreover, a significant portion of the respondents highlighted poor infrastructure, facilities and overregulation, as well as lack of proper policy implementation as detrimental for both existing investors and new investors in Pakistan,” it said.
The statement said businesses are seriously concerned with operational issues like delays in tax refunds, lack of reforms in rules and regulations in line with changing environment, cumbersome procedures and lack of accountability and slow decision making process.
The survey respondents expressed optimism for the next six months with 53 percent expecting expansion in business operations, 56 percent expecting increase in sales and profitability, 40 percent of the respondents planning new capital investment and 32 percent of the companies believe that their employment levels will increase over the next six months.
Rizvi advised the government to leverage the positivity by taking growth-oriented policy initiatives, along with visible measures to improve governance through predictable, transparent and consistent implementation of policies. Provincial leadership should effectively play the critical role in improving the business environment.
Conducted through field interviews in all four provincial capitals, including Islamabad and key business towns across the country, the survey is based on feedback from representatives of all business segments in Pakistan, including retail and covers roughly 80 percent gross domestic product.
The survey found that real estate and financial services sectors flourished the most, followed by petroleum and fast moving consumer goods sectors, while tobacco, textile, motor vehicles and non-metallic sectors remained subdued.
less cost by modernising customs procedures, removing bottlenecks at borders, and simplifying trade. It also works to ensure energy security and efficiency and to promote energy trade.
A Strategic Framework for the Central Asia Regional Economic Cooperation Programme 2011 2020 guides the partnership through its second decade of project implementation, with the primary goal of increasing trade and competitiveness.
Under the initiative of CAREC, Central Asia is on the move as it is rapidly rebuilding the ancient transport and trade routes that once connected Euro-Asia; the region is poised to recapture its place as a centre of trade and commerce. Rich in natural resources, surrounded by opportunity at the heart of Eurasia, and committed to regional cooperation, the CAREC countries are preparing for a new phase of growth and prosperity. The region’s ability to capitalise on its unique geographical position and connection to the global markets would be a defining feature of its future development.
The potential is vast. Trade among all the major subregions of the Eurasian continent has more than doubled since 1995.
This growing integration creates real demand for more efficient and reliable transport connections that move people and their businesses around the region faster and cheaper.
According to available latest data till end 2014, of the total investment of $24 billion, the 10 CAREC member countries financed $5.4 billion (22.2 percent), Asian Development Bank (ADB) $9.2 billion (37.3 percent), World Bank $5.8 billion (23.5 percent), European Bank for Reconstruction and Development $1.6 billion (6.3 percent), and Islamic Development Bank $1.4 billion (5.6 percent). Other development partners provided $1.2 billion (5.1 percent).