For­eign in­vestors cheer growth with cau­tion

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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.

CAREC 2020:

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).

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