‘US investors concerned over security, but still optimistic’
KarachiEven though US businessmen have a positive attitude towards Pakistan on the whole, a significant number of them also believe that the international perception of the country is poor which makes it challenging for them to sell investment and expansion plans at a regional level.This was stated by Arshad Shaheen
Karachi Even though US businessmen have a positive attitude towards Pakistan on the whole, a significant number of them also believe that the international perception of the country is poor which makes it challenging for them to sell investment and expansion plans at a regional level. This was stated by Arshad Shaheen Hussain, the president of American Business Council of Pakistan (ABC) while announcing the results of a perception survey conducted by the council. The survey allowed the ABC members to rate their satisfaction on various economic, regulatory and political factors affecting the performance and growth of businesses operating in Pakistan in the financial year 2014 and 2015. He said though American businesses in Pakistan were adversely affected by the poor law and order situation, 80 percent of the survey respondents were optimistic about their future in the long run. “Concrete action must be taken by policy makers to make Pakistan a preferred investment destination,” said the ABC president. “International standing and perception is extremely important because Pakistan competes with other Asian players to attract foreign capital in the form of trade exports, human resources, tourism and most importantly, foreign direct investment.” He said a predictable political, economic and social environment did the most to strengthen confidence in the longer run and formed the basis of a country’s development. The ABC’s perception survey rated the business climate using various factors which affected it, including implementation and consistency of trade and competition policies, government’s development budget, domestic market, internal and external political climate and law and order. Out of these factors, law and order received the worst response, with 74 percent of the respondents terming it to be poor, despite the progress of Zarb-e-Azab operation. Around half, 48 percent, of the respondents felt like law and order had adversely affected business operations and investment plans. Other areas of concern include policy consistency and implementation which have been rated poorly by over half of the survey participants. However, despite the challenges faced by Pakistan, 65 percent of the respondents also indicated that they planned to invest in the country in the next 12 months while 80 percent were optimistic about the long-term economic and operating climate of the country. For the outgoing fiscal year of 2014-2015, a vast majority of the respondents rated the business climate of Pakistan to be satisfactory with only 11 percent giving it a poor rating. “This is a marked improvement over the financial year of 2013-2014 when 44 percent of the survey participants rated the business climate as poor,” said the ABC president. “The overall positive perception of American investors reveals an expectation of some economic stability and an improvement in Pakistan’s economic environment.” He said with the performance of each of the various federal ministries also directly affecting the business climate, survey participants were also asked to rate their performance individually. In this regard, said Hussain, the overall trend reflects a slight improvement in the performance of various ministries from the last financial year. “The ministry of finance and economic affairs enjoyed a significant improvement in its perception with 77 percent of the participants rating its performance as fair as compared to 2013-2014 when 50 percent of the respondents had rated it fair and 44 percent poor. Meanwhile, the perception of ministry of science and technology also showed a marked improvement with 74 percent of the respondents reporting its performance as fair, and 20 percent terming it poor. “In financial year 2013-2014 just 47 percent of the respondents had rated the performance of this ministry as fair while 43 percent had rated it poorly,” said Hussain. He said the ABC was one of the largest groups in Pakistan with 68 members and most of them representing Fortune 500 companies. They operate in various sectors such as health care, financial services, information technology, chemicals and fertilisers, energy, and food and beverage. He said the ABC members have cumulative revenue of Rs$3.73 billion and contribute a sizable amount to the national exchequer every year as direct and indirect taxes with last year’s contribution being Rs77 billion. The ABC members also employ over 34,000 people directly who support 140,000 dependents and indirectly employ nearly one million people with agents, distributors and contractors, added Hussain.