The economy of Pakistan is a glaring example of negative perception where investors are least interested in risking their money without going into the details that the media reports are not always true. On another note, there are several multi-national companies settled in Pakistan for decades and have done good business even during the peak days of terrorism. The government is trying its best to improve security situation, but isolated attacks by terrorists backfire every effort, sending wrong signals to the world that Pakistan is a dangerous place for doing business.
Though the country has been classified as a frontier market, but there are convincing factors which can lead to attract foreign investment in the coming years if the government concentrates on three core areas; security, energy and tax relief. According to various economic indexes, Pakistan is an emerging market or it is about to gain this status as the government has introduced various open arms policies for the foreign investors. What only needs to do is to convince the global investors about incentives the government has offered with improved infrastructure and skilled labour which is cheaper than any other country in the region. The country has bright growth prospects and is on the road of fiscal consolidation and stability due to introduction of structural reforms and financial discipline by the current government during last two and half years.
Pakistan has recently signed an agreement with China to set up a free industrial zone in Gwadar which will usher in an era of development and prosperity in the country. Tax-free industrial zones should also be established in Karachi, Lahore, Peshawar, Quetta, especially in the cotton belt. Pakistan has agrarian economy and setting up industrial units in rural areas is the need of the hour to convert agriculture yields into value added products. As a result of tragic incident in Peshawar yesterday, where terrorists hit an airbase, shows that terrorists still have the power to strike back. Economy is the ultimate casualty in an unsafe environment as such incidents erode the investors’ confidence. However, the Karachi stock exchange has been one of the world’s top 10 performers for the last three years and the volume of the economy has reached over $ 250 billion. However, unless the government improves business climate and security situation, investors will continue to remain shy of investing in Pakistan. The country has the history of economic resilience and it has always defied sceptics despite violence and political uncertainty. The image of the country can be improved by accelerating industrial growth in collaboration with Chinese investors.
