Only investment is the answer to the sagging economy of the country, but it is only possible when Pakistan is turned into a tax haven rather than a tax hell. The country ranks 138th in the ease doing business index and 122nd difficult country to start a business. Taxes play major role in attracting local or foreign investment and only countries with low tax rates and modern infrastructure are the center of investment in the modern economy. UAE, Singapore, Hon Kong and Malaysia are the best examples of modern economy where the business is important than politics. Pakistan has signed dozens of free trade agreements with several countries, but failed to improve the state of the economy. This could be only possible when business-friendly environment is created and government agencies work as facilitators and not as business-blockaders. In the current situation, the government assigns ambitious targets to the tax collection agencies which have to comply with the orders no matter how their efforts harm the business activities. If a business is affected, several other stakeholders attached with it will also suffer. If a government action, prudent or imprudent, affects a business concern, it will have trickledown effects on several other businesses and individuals.
The China-Pakistan Economic Corridor is hopefully a game changer and Pakistan will have to adopt liberal trade and investment policies to attract foreign investors. At least 700 small, medium and large scale Chinese companies are interested in electronics, automotive, education, agriculture, textiles, shoe manufacturing, chemicals and real estate sectors. Chinese commercial vehicle are likely to be introduced in the local market in a year while the Chinese investors are also in negotiations with their Pakistani counterparts to revive the textile industry. The local textile millers are still using outdated machinery and technology and Chinese involvement will work as driving force to upgrade the textile sector.
The policymakers will have to work overtime not only to facilitate Chinese investors, but also invite European and US investors to exploit business opportunities in Pakistan. The country is facing threat from India and business partnership with foreign investors will give Pakistan a leverage over the enemy. Business relations between the countries are better than political relations. Pakistan has friendly relations with China, Japan, Turkey and various European nations. It will be in the interest of the country to involve foreign investors in the local business and trade to also gain political support on various regional and international issues. The only need is to revise and revive the tax system in Pakistan and devise irresistible investment policies. Business is the answer to various problems in the country.
