KARACHI: US businesses operating in Pakistan are bullish on economic prospect in the long run with nearly half of them having enlisted the country as a destination for near-term global investment, but majority of them termed high cost of doing business as the biggest challenge.
The American Business Council of Pakistan (ABC) survey found that more than 59 percent of the respondents believed that the international perception of Pakistan had become better. That compared with 57 percent of respondents who expressed this viewpoint in the survey for FY2018.
However, 61 percent of the respondents rated the business climate of Pakistan [as] worse compared to a year earlier and 40 percent of the participants felt that it had become even more difficult to do business in the country.
The survey let ABC members rate various economic, regulatory and political factors that affected the performance and growth of their businesses in FY2019. ABC is one of the largest investor groups in Pakistan with 65 members, which contribute a sizeable amount to the national exchequer every year as direct and indirect taxes. Last year, the members contributed Rs109 billion in taxes and exported goods worth Rs40.64 billion. They employ over 130,000 people directly and indirectly and employ nearly one million people through their networks of agents, distributors and contractors.
Adnan Asad, president of ABC said the previous year was geared towards correcting the course and putting the economy back on track.
“The country had to pay for it by way of price hikes, inflation and extremely high interest rates,” Asad said. “I am very optimistic about the future of the country. I foresee 2020 as a stable year with the economy settling down and the business environment improving and normalising.”
In the survey, the business climate was rated on each of the various factors influencing it, including economy, implementation and consistency of government policies, political climate and law and order situation.
Of the factors, the economy and implementation of policies were rated as ‘unsatisfactory’ by over half of the survey participants and 75 percent of the respondents marked increasing costs of utilities, duties and taxes as the biggest challenge affecting business operations ‘adversely’.
Over 90 percent of the respondents were, however, optimistic about the long term (2 plus year) economic and operating climate.
The survey also revealed that more than 40 percent of the respondents marked the country as one of the several destinations for near-term global investment plans and quite a few marked Pakistan as a top priority for future investment.
Asad said all economic indicators showed a positive and optimistic picture. “Law and order is at its best. The government is striving to implement its policy of ease of doing business,” he added. “We need to be patient and provide all support to the government to succeed so that we are classified as a developing first world country.”