Foreign investors cheer growth with cautions

KARACHI: Foreign investors expressed confidence over growth and sustainability of Pakistan’s economy, although they are concerned about poor infrastructure and lack of policy implementation, a survey said on Thursday.

The Overseas Investors Chamber of Commerce and Industry (OICCI), an umbrella of foreign and multinational companies, said the overall score of its 12th Wave of Business Confidence Index (BCI) survey reflects a remarkable level of bullishness by the overall business community throughout the country.

“The business community is generally satisfied with the sustainability and the resolve of the authorities in effectively tackling law and order situation, mainly in Karachi and northern areas, and visible improvement in energy management, especially for industrial sector throughout the country,” a statement quoted OICCI President Shahab Rizvi as saying. 

“The reduced cost of doing business due to reduction in petroleum product prices, low single digit inflation and borrowing rates and expectations of better economic condition following CPEC (China-Pakistan Economic Corridor) and other ongoing energy projects based on coal and LNG (liquefied natural gas) may have also contributed in boosting the confidence of the business community to a record level.” 

The statement, however, said improvement in BCI was not one directional as several respondents expressed concern on the same factors viewed favourably by the majority.

“Moreover, a significant portion of the respondents highlighted poor infrastructure/facilities and over regulation as well as lack of proper policy implementation as detrimental for existing investors as well as new investors in Pakistan,” it said.

The statement said businesses are seriously concerned with operational issues like delays in tax refunds, lack of reforms in rules and regulations in line with changing environment, cumbersome procedures and lack of accountability and slow decision making process.

The survey respondents expressed optimism for the next six months with 53 percent expecting expansion in business operations, 56 percent expecting increase in sales and profitability, 40 percent of the respondents planning new capital investment and 32 percent of the companies believe that their employment levels will increase over the next six months.

Rizvi advised the government to leverage the positivity by taking growth-oriented policy initiatives, along with visible measures to improve governance through predictable, transparent and consistent implementation of policies. Provincial leadership should effectively play the critical role in improving the business environment.

Conducted through field interviews in all four provincial capitals, Islamabad and key business towns across the country, the survey is based on feedback from representatives of all business segments in Pakistan, including retail, and covers roughly 80 percent gross domestic product.

The survey found that real estate and financial services sectors flourished the most, followed by petroleum and fast moving consumer goods sectors, while tobacco, textile, motor vehicles and non-metallic sectors remained subdued.

Metropolitan cities recorded higher business confidence with Sukkur, Quetta, Rawalpindi/Islamabad, Lahore, and Karachi, in order of priority, indicating a more positive outlook.

Faisalabad and Sialkot, the cities which respectively host the textile and non-metallic sectors, remained negative along with Peshawar and Multan.