Investment climate in Pakistan outshine many regional countries: OICCI

ISLAMABAD: The ‘Perception and Investment Survey 2021’ conducted by the Overseas Investors Chamber of Commerce and Industry (OICCI) has shown improvements in the foreign investors’ sentiments about the investment and operating conditions in Pakistan.

The survey results shed light on the increase in the confidence of the OICCI members on the growth potential of the country and some areas where the government’s attention is required.

Compared to the previous survey, Pakistan has been rated “Better” ahead of India, Thailand, Vietnam, Bangladesh, Sri Lanka and Philippines but behind Indonesia, Malaysia, UAE and China.

The survey respondents have been positively influenced, amongst other considerations, by measures of easing business operations such as improved banking infrastructure, access to local financing avenues, and repatriation of profits. However, concerns have been shown on the ease of doing business and the perception of Pakistan.

OICCI President Ghias Khan shared the salient features of the survey and highlighted that the foreign investors are largely positive on several business climate parameters.

The OICCI members forecast healthy growth of their respective business entities in Pakistan with an overwhelming 80 per cent of respondents willing to recommend new foreign direct investment (FDI) in Pakistan.

Khan said: “The case for business growth potential and opportunities in Pakistan is supported by over 65 per cent of survey respondents indicating their plans to make new investments, out of which 8 out of 10 respondents plan to invest more or similar amounts over the next 1 to 5 years, compared with the investments they made in the previous corresponding period.”

OICCI Chief Executive and Secretary General M Abdul Aleem stated that the OICCI members have once again emphasised on the need for a predictable, consistent, and transparent policy framework and its fair implementation.

“The governance issues, including ‘Gap in Policy implementation’ continue to remain an area of serious concern along with increasing tax burden and cost of doing business. These factors not only hinder the business environment but also contribute to lower FDI in the future,” he added.

The survey also highlighted sector-wise issues which the OICCI intends to take up with the concerned stakeholders.

He said that one of the major bottlenecks overseas investors are facing is delay in the sales tax refunds from the Federal Board of Revenue (FBR) and now it has reached to a level of Rs80 billion. “This delay not only creates a liquidity crunch but also disturbs the cash flow of multinational companies,” he remarked.

While engagement of the federal government with investors has slightly declined compared to the previous survey, OICCI members have acknowledged that senior functionaries in the federal government have shown understanding and commitment to resolve investors’ issues.

Abdul Aleem said that unlike the federal government, the provincial governments do little to address the problems of investors. “Neither they have the capacity or desire to resolve issues the investors face in the country,” he observed.

However, the authorities in the government of Sindh has shown improvement versus the previous engagement levels. However, respondents have also mentioned that at times, policies and regulations tend to be inconsistent and abruptly introduced with ineffective enforcement.

The performance of regulatory bodies also reveals a mixed perception and concerns have been expressed over the excessive regulatory environment in certain areas.

OICCI Vice President Amir Paracha commented: “Going forward, we believe the largely positive feedback from the foreign investors through PIS 2021 survey need to be leveraged by all the key stakeholders, especially those in the federal and provincial government, and institutions like Board of Investment, FBR, and other regulatory bodies.”

“The issues identified need to be addressed on priority and opportunities are to be explored with speed and determination so that Pakistan can accelerate its growth momentum and attract large FDI,” he added.

To achieve this, regular and structured engagement with foreign investors, along with a predictable, transparent, and consistent policy framework is imperative.

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