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January 11, 2018

Foreign investors eyeing more stakes in Pakistan: survey


January 11, 2018

KARACHI: The majority of foreign businesses operating in Pakistan are looking to increase their stakes in various ongoing ventures owing to country’s investment-friendly environment and policies, a survey conducted by Overseas Investors Chamber of Commerce and Industry (OICCI) showed on Wednesday.

“Around 75 percent of the respondents of a study foresee continuing growth in their businesses and plan more investment in the country,” said Khalid Mansoor, president OICCI, sharing the results of “Perception and Investment Survey 2017” with Prime Minister Shahid Khaqan Abbasi in a meeting here.

“The overall results of the survey reflect improved and positive sentiments of its members, who are the leading foreign investors operating in the country.”

The OICCI president, while appreciating the operating environment, raised the chamber’s concerns over issues slowing down the growth of foreign direct investment (FDI) in the country.

“These problems include negative perception of the country against the positive reality, poor rating in the World Bank’ss Ease of Doing Business index, issues with policy implementation especially on taxation, like the year-on-year continuation of 3-4 percent super tax, long delays in settling tax refunds and growing number of interprovincial coordination issues, which are manageable with good governance and frequent interaction among the key stakeholders,” Mansoor said.

Hailing the results as highly positive, the Prime Minister termed the survey as a reconfirmation of the improving business confidence in the country.

The statement quoted Abbasi as saying the OICCI members have always been good ambassador of Pakistan as they are not only doing good business in Pakistan, but have also reposed high confidence in sharing the fast improving business environment and investment opportunities to potential foreign investors.

“The government is aware of some of the issues faced by the OICCI members and will continue to engage regularly with them and other leading economic stakeholders to ensure that the investment and business in Pakistan flourishes faster than any other country in the region,” the PM said.

The OICCI also informed the premier that its members collectively pay about one-third of the total tax revenues collected in Pakistan and re-invest about $ 2 billion annually and are positive about the opportunities and potential of the country and foresee expansion of its economy.

“About 80 percent of the foreign investors recommended Pakistan as potential for foreign investment. When comparing the business climate in Pakistan with that in the ten regional countries, more than half the OICCI members gave a higher rating to Pakistan compared to India, Indonesia, Sri Lanka, Bangladesh, Philippines and Vietnam,” the OICCI said apprising the PM further about the results of the survey.

Moreover, the statement said, about 71 percent of the members’ regarded Pakistan as a medium risk country, which is a vast improvement and a positive indicator for new investors.

“A significant number of foreign investors has given good ratings for certain aspects of doing business like ‘access to local finance’, ‘safety of foreign investment’ and relatively favorable ratings for an ‘independent legal system’, and ‘protecting minority interest’, which reflect the liberal and investor-friendly policies appreciated by foreign investors,” the statement added.

Mansoor further said a noteworthy change has taken place in respect of the Top Challenges faced by the OICCI members. “‘Energy shortage’ identified as the second biggest challenge in the last three surveys has dropped out of the top five challenges, whilst ‘security, law and order’ which topped the list in the last three surveys has been identified as the third biggest challenge this time,” he added.

Also, the statement said, to further add to the optimism, recent accords signed by the government have all been given a thumbs-up by the respondents and majority of the respondents supported the China-Pakistan Economic Corridor (CPEC) projects.

“Respondents also feel that Pakistan’s membership in the Shanghai Cooperation Organization (SCO) will favorably impact the business environment in Pakistan,” the OICCI statement said.

It added that half the respondents have shared positive views about Pakistan becoming a signatory of Organization for Economic Co-operation and Development (OECD), as this agreement may lead to broadening the tax base in Pakistan, by compelling the citizens to declare offshore income and assets.

Fawad Hasan Fawad, Principal Secretary to the PM, Younus Dagha, Secretary Commerce Ali J. Siddiqui, Special Assistant to the PM, and Samaira Nazir Siddiqui, Secretary BoI were also present during the meeting.

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