MALAYSIA WELCOMES RELOCATING PAKISTANI BUSINESSES
TARIQ AHMED SAEEDI
June 20 - 26, 2011
During last seven years, Pakistani businesspersons transferred US$2.1 billion, equal to around Rs180 billion, to Malaysia to get benefits from the Malaysian government's investment attractive scheme namely 'Malaysia My Second Home', reported Khaleej Times Online. The scheme was basically just in time. Pakistani businesspersons are naturally on the lookout for safe destination to park their hard-earned incomes in the wake of deteriorating socioeconomic conditions in the homeland.
"The programme received tremendous response and Pakistan emerged as one of the top 10 countries to benefit from the scheme and more than 700 people, most of them belonging to Karachi, availed the facility,"the newspaper cited Consul General for Malaysia, Khalid Abdul Razzaq as speaking to media last week.
The consul general answered why Pakistani businesspersons were opting to transfer their assets outside Pakistan. He said deteriorating law and order situation especially in Karachi made them to accept Malaysia as second home. Under the scheme launched in 2002, any individual with less than 50-year age can enjoy citizenship rights in Malaysia for 10-years if he/she maintains $300,000 Malaysian bank's account.
Energy crisis, security problems, and corruption are the major causes of flight of capital. Unabated electricity load shedding is taking high toll on the industries, which are losing their production capacities day by day. Losses to export-oriented sectors are expansive spreading impacts over all over the society and the economy. Apart from job losses that are usual outcome of reduction in the industrial production, energy crisis is growing businesses weaker. Over the last few months, textile exports registered significant surge in figures. The economic managers were overexcited and, according to the critics, misconstrued the real fact behind growth in exports. Obviously, high international prices earned the country good sales. That was not because of the policy action. The situation on ground is indicative of all that is antigrowth. Gas and electricity shortages are forcing industries to reduce working hours. Exporters are finding hard to meet the obligations to international buyers. Worsening law and order condition is adding insult to the injury caused by energy crisis.
While suicide attacks in civilian settlements and military instalments are increasing day by day, invasions by ISAF forces within Pakistani border are leaving citizens dumbfounded over the status of national sovereignty. Industrial wheels are jammed frequently owing to so-called protests against such attacks. Political parties, which do not come up with clear-cut response to attacks on civilians, proclaimed by Taliban hardliners, come on street to lodge protests against US every now and then. Businesspersons are in morbid fear of insecurity to their lives and properties. Kidnapping for ransom is forcing wealthy people to confine their activities in the protected walls of homes or factories. Ragtag groups are busy in acts of kidnapping people in the broad daylight. A Karachi-based textile businessperson liquidated his all wealth all of a sudden and transferred it to Malaysia not because of attractive incentives, but because of disenchantments and fright he felt after his brother was abducted by criminals on ransom, it was learnt.
Not under militant attacks usually as other parts of the country are, Karachi, the national industrial hub, is being adversely affected by law enforcement agencies losing control over criminals, murderers of civilians, and kidnappers.
Inflows of remittances are making history after having crossed the mark of 10 billion dollar, which is more than half of Pakistan's total foreign reserves. Although, remittances play major role in economic growth, the amount is not invested directly in the industries albeit making foreign reserves position of a country stable. However, investments in expansion and modernization of industries are important to generate employments and improve buying power of the people.
Poverty is on the rise in Pakistan and for last three years graph of poverty is alarmingly on upward trajectory mainly owing to erosion of buying power in the wake of double-digit consumer price index inflation. Let alone education and health, which are far beyond the reach of masses, the time has come that people are deprived of two square meals a day. Owing to rising poverty, incidences of suicides are also on the rise. Unable to meet the daily basic needs of family, people are resorting to extreme actions such as crimes and corruption. Corruption has taken deep roots in the governance system of the country also due to inability of people to fulfil basic needs. Practice that sprouts from the womb of need becomes ingrained habits later on. White-collar corruption has also its origin in the society with poor governance system. Lawlessness and unfair dealings encourage people to leave the path of honesty. When all are doing, why I should restrain myself is the common answer one can get from a person who indulges first time in the unfair dealings for example taking and giving bribes.
Until government takes cognizance of the situation and sets up emergency plan to give security to the business community, it would be very difficult to stop flight of capital, especially at a time when they are gravitated towards attractive programs like Malaysia My Second Home. Karachi's situation should be dealt separately with the help of political representatives who hold public mandate, and own the city.