Pakistan has now chances to grab international investment, as the opportunities are opening up due to slowing down of the Chinese economy and many investors are pulling out of India due to anti-business policies of the New Delhi government. However, the Pakistani government is also sending wrong signals to the international investors due to ill-advised economic policies and witch-hunt of businessmen. Traders in all major cities are protesting against the imposition of withholding tax on bank transactions and the government agencies have gone on the rampage to terrorize the investors on one pretext or the other. According to media reports, China has been keeping a status of attractive destination for the last many years due to security, low tax ratio and cheap labour. Pakistan on the other hand is one of the worst countries of the world in ease of doing business index. Tough government laws and unbridled authority of the bureaucratic machinery only breed corruption. A blind enactment of law and its blind implementation only lead to catastrophe and this has been gravely happening in Pakistan since independence. Some officials lead more luxurious life than businessmen and that is not a secret in this country. A law is a strong tool in the hand of black sheep in the government machinery to destroy a business concern as well as the economy at their will.
There is a need to improve capacity building of the officials in the country. In India, a billionaire commodities investor Jim Rogers is leaving that country after becoming frustrated with the pace of reforms by the current Indian government. The Singapore-based investor has packed up by selling all his stocks due to lack of interest of the Indian government in foreign investment. The disappointed Rogers says that he does not expect anything good from the Indian government and is looking for other countries for investment. Rogers blames the Indian red-tape, business restrictions and labyrinthine investment rule for his departure. The situation in Pakistan is not different, but the hope should be kept alive.
This is a good opportunity for the government to invite the dejected investor to Pakistan and offer him incentives. Even the Chinese businessmen are ready to invest in Pakistan’s industrial sector if they are facilitated. The Rogers case should be an example for the Pakistani bureaucracy to treat foreign investors. The government has to take big and small businessmen of the country into confidence before devising and implementing policies. Harassment of businessmen will only lead to capital flight from the country as it happened in the past. If the government wants to enhance tax net, it will have to move forward step by step and should avoid jumping into a gorge.