According to newspaper reports, Finance Minister Ishaq Dar has invited foreign businessmen to exploit huge investment opportunities in Pakistan as there is huge potential for investment in every sector of the economy in the country. The minister should understand that every country welcomes foreign investment with both hands, but the investors want certain conditions to invest their money in new projects. Nobody will risk its money on the statements and lip-service by the government ministers. The Pakistani economy is based on loans which are piling up day by day. Pakistan is ready to receive 10th tranche from the International Monetary Fund (IMF) next month under Extended Fund Facility arrangement, burdening the nation with another $550 million loan. The loan is approved after the government assured the donor agency that it has achieved all the economic targets. The government has also assured the IMF that the budget deficit will be kept within limits and tax collection will be improved.
As a matter of fact, the problem starts when the government commits to the foreign donors that it will be able to collect certain amount of taxes in compliance with their conditionalities. But the government never gives attention to improve the tax system instead of tax collections. Another matter of rejoice for the government is that it will receive $900 million from the World Band and Asian Development Bank this month, but the policymakers have no idea what they are going to do with this nation. Instead of concentrating on loans, the finance minister should improve the country’s position on the ease of doing business index to attract foreign direct investment. The finance minister himself accepted low ranking of Pakistan on ease of doing business index and promises that the government will endeavor to bring the ranking to around 100. The current economic and financial policies are also outdated and need to be revised with clear vision on the part of the government to promote business, trade and investment in the country.
The country’s emerging middle classes can work as an engine of growth for consumer goods industry and it is the best time to promote corporate sector in the country. Though the corporate sector has its own demerits, but overall results of the corporate economy are not bad. Apart from reforms, the government should ensure incessant power supply to the industrial sector and introduce specific tax policy for foreign investors. The China Pakistan Economic Corridor will bring over $45 billion investment in the country and mega industrial projects can be initiated in the country, involving investors from all over the world, including China.
