FPCCI calls for investment in energy, infrastructure

KARACHI: Pakistan’s apex trade body on Saturday said the government needs to come up with new infrastructure and energy projects if it is keen to attract investments to spur growth.
The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) said private sector participation in greenfield projects, such as infrastructure development, energy and construction could only be feasible if the government eliminates administrative obstacles.
“The PML-N government had introduced greenfield investment scheme for the development-related projects in 2013, but necessary legal framework and administrative measures have not been taken to implement those investment policies till now,” the FPCCI said in a report to be presented to the government.
In 2013, the government announced tax holiday on investment of up to Rs50 billion in captive power plants, low-cost housing, livestock and mining and quarrying projects in Sindh, Balochistan and Khyber Pakhtunkhwa.
But almost two years passed and that announcement does not inspire confidence among investors.
“Efforts to attract local and foreign investments in greenfield projects should be an integral part of the government’s economic revival strategy for the year 2015,” the Federation of Pakistan Chamber of Commerce and Industry said.
The Federation of Pakistan Chamber of Commerce and Industry said the government also lacks resources and fiscal space and to initiate new projects. “Foreign assistance and external debt options are also no longer available in the present global scenario,” it added.
The trade body suggested that the government should encourage expatriate Pakistanis to contribute in the economic development of the country by inducing investment in the national rebuilding projects, including construction, steel industry, energy sector and financial services.
“Now, the role of DFIs (development finance institutions) in the economic development is almost negligible, while monetary policy and banking system do not support the mega projects in Pakistan,” it said. “In its monetary policy, Pakistan has been adopting a quantitative easing to finance the budget deficit.”
The federation recommended a ‘new development initiative program’, outside the ambit of the government’s annual development plans, which should be governed by a separate board of governors, including representatives of private sector.
It also recommended creation of an infrastructure development fund to kick-start expansion projects in transportation, water and energy and ports and shipping. “These projects will lead the enhanced activities in construction, energy, steel, mining, transport and financial sector,” the report mentioned.