Pakistan could have made economic recovery if it had an investment-friendly regime: Report
Jan 12, 2023
Islamabad [Pakistan], January 12 : Pakistan could have made an economic recovery through foreign investments. The country, however, is not known to have an investment-friendly regime, Islam Khabar reported.
Foreign investors avoid bringing money into Pakistan due to various factors such as political instability, discontinuity of macroeconomic policy, terrorism, corruption and energy shortages.
In the past two decades, Pakistan has tried implementing several FDI-friendly measures. Wide-ranging structural reforms were attempted by the country to attract multinationals which could become the enablers of economic growth and job creation in the country.
However, effective implementation of such measures remained slow due to ground-level problems in the country including red-tapism, bureaucratic lethargy, rampant corruption, misguided ideology and extremism, Islam Khabar reported.
Corporations from many developed countries have thus struggled to grow their investments in Pakistan.
Companies such as Proctor and Gamble, Oracle services Pakistan, IBM Pakistan, FedEx (Gerry's Group of Companies), Marriot Hotels, and Troy Group Inc. have to approach the State Bank of Pakistan (SBP) and other departments for minor problems which leads to disruptions in their operation.
Proctor and Gamble's plans for importing raw materials and machinery into Pakistan are in limbo due to SBP's restrictions on the import of machinery.
Oracle Pakistan has also been facing resistance from SBP in the clearance of its shipments. IBM Pakistan, FedEx, Gray Mackenzie Restaurant and Marriot Hotels have been struggling to get SBP's approval for repatriating their profits from Pakistan, reported Islam Khabar.
Policy initiatives in Pakistan often face hurdles due to corrupt officials and the high-handedness of institutions. Minor issues faced by these companies often turn into major problems which affect the investment climate in Pakistan.
The experience of these companies damages the long terms prospect of investment by them or others from their countries of origin, Islam Khabar reported.
Pakistan-based The Frontier Post newspaper recently reported that Pakistan's economy is currently facing one of its worst crises as the country's foreign exchange reserves have fallen to a critical level of USD 4.5 billion, warned The Federation of Pakistan Chambers of Commerce & Industry's (FPCCI) Businessmen Panel (BMP).
FPCCI former president and BMP Chairman Mian Anjum Nisar has said that the number will drop further amid debt repayment obligations of more than USD eight billion in the first quarter of 2023.
Pakistan has been reeling under economic distress due to fast-depleting foreign exchange reserves, weakening rupee, and worsening macroeconomic cues said the former FPCCI president.
This comes as the gap between inter-bank and open-market US dollar rates has widened by over Rs 24, highlighting the difference in how the greenback is being valued in two formal marketplaces in Pakistan, reported The Frontier Post newspaper.
