Dwindling exports from Pakistan have been causing the jitters over preceding decade or so. Substantial trade deficit leading to the unprecedented current account deficit calls for immediate steps to rein in the conundrums. Countless efforts have been made by the successive governments to promote industrialization, at least through speeches and probably on paper, to say the least.
Business opportunities are galore in Pakistan however the volume of foreign investment belies this fact until now. There is a long-standing demand for ease of doing business by both local and foreign investors in Pakistan. A deluge of work has been done in this regard over the period of preceding decade with no tangible outcome. Prior to assuming power, every political party claims to turn around the ailing economy of Pakistan, however, once in power, the situation is contrary to what was proclaimed. The terminologies such as business avenues, textile cities, export hubs, special economic zones etc. have been heard of over numerous years by the constituents with the hope that there would be a silver lining. Hope lasts with life.
It is beyond doubt that Pakistan is a land of abundant opportunities. Perhaps, accurate direction is missing. The strategic location of Pakistan accrues benefit to the country. Industrialization to promote economic activities and boost exports is indispensable.
The provincial Boards of Investment such as Punjab Board of Investment, Sindh Board of Investment etc. have been claiming to uproot the problems by taking corrective measures in terms of economic activities and industrialization in their respective provinces. The outcome of the efforts of these organizations is what the nation is experiencing today. The Board of Investment, at the federal level, and the provincial relevant bodies have always claimed that a lot is being done to attract investment etc. Pakistan is one of the least recipients of the foreign direct investment.
It was announced recently that the Punjab government will be establishing around eight new industrial zones in the province. The provincial government would ensure the promotion of local industry and the ease of doing business by providing all facilities under one roof.
At the federal level, there are discussion regarding a single tax system which is one of the long-standing demands of the industry. A single tax is prevalent in the world and New Zealand is one of the leading examples in this regard. Business community has to tolerate 47 taxes, which recently has been reduced to 16 as per the announcement. A single tax system is to attract investment without unwarranted impediments. The Finance Minister seems earnest in introducing the single tax system, which might help the economy grow as per the expectations. The more the production owing to local and foreign investment, the more the exports which is the mainstay of the economy of Pakistan at present.
The government has to look at the demand of the export packages as well to get the desired results. Along with the export package, the government needs to oversee the performance of the regulators. The business community does not seem glad with the regulators and generally quote the instances of varying degrees of filing requirements by various regulators. The job of the government is to regulate with ease by removing the uncalled-for obstacles which have proved disastrous for the economy over the decades.
At present, 19 different permits are required for one project. Imports substitution is viable through the promotion of the local industry along with substantial foreign investment. Almost all countries, whether a developing or the developed, are vying for foreign investment so in this case Pakistan has to come up with out of box solution to materialize the much-needed investment in the country. The government has reiterated recently that there is no change in the government policy on 100 percent foreign shareholding allowed in legal entities incorporated in Pakistan. This might bolster the confidence of the would-be foreign investors.
Pakistan needs large foreign investment in the manufacturing sector particularly to enhance its dwindling exports. There are a plenty of good news regarding the investment in the manufacturing sector. The existing foreign and local investors are intending to invest more as well as the would-be investors are keen to make their entry in the Pakistani market. One of the recent instances is that of Ghandhara Nissan Ltd, which has pledged to begin rolling out three Nissan models in 2020. This is a great opportunity for the local vendors for making parts. The investment of $47 million and around 40 percent indigenization in the next three years augurs well for the economy of Pakistan.
The nation is keen to see the investment opportunities materializing and the generation of employment opportunities along with the enhancement in the exports to tackle the dissipating reserves of the country.