INTERVIEW: CAPT. HALEEM SIDDIQUI
FUTURE OF ECONOMY LIES IN DOMESTIC INVESTMENTS.
Oct 17 - 23, 2011
The investment gives an impetus to the economic growth in the real sense, while high cost of financing always hampers and creates impediment in the way of investment, said Capt. Haleem Siddiqui, the Chairman Marine Group of Companies.
Capt. Haleem Siddiqui has the credit of giving a new horizon to the port operations and container services with the creation of the most modern container terminal (Pakistan International Container Terminal) with the financial support of the World Bank.
Committed to the domestic economic potential and resource, he strongly believes that given the opportunity people of this country have the courage to up lift the face of the national economy at par with any developed economy.
Commenting on the recent move of reduction in interest rate by the State bank of Pakistan, Haleem said in an interview that cut in interest rate would be an incentive to the investors and certainly help attracting local and foreign investment.
Describing the reduction in the discount rate by the central bank as a right step in the right direction, Haleem Siddiqui said that actually the policy rate between 10-11 percent would be ideal to re-activate the stagnant economic activities.
As far as the inflation is concerned, it is also a grey area, which needs effective and corrective measures. In this respect, we have to arrest the declining of local currency against dollar or other international currencies.
In fact the weakening of rupee is not taken as a good indication of the economy hence the rupee-dollar parity has also to be stabilized with a view to contain price inflation.
Stability to the local currency is strictly related to fair GDP growth, which is possible to be achieved only in a vibrant economy. It is the productivity, which triggers the strength of the local currency against international currencies.
Capt. Haleem Siddiqui said that political stability is a must for ensuring economic stability. However, the two are inter-linked and it is highly desirable to ensure political stability as a prerequisite for winning the confidence of the investors.
As a first step, there is a dire need to control law and order situation as bad law and order situation gives a feeling of insecurity to the investors. When the investor feels secure about the safe return of their investments, they would certainly bring investments in the country.
He appreciated the move by the Supreme Court of Pakistan as some peace is visible in Karachi after the effective operations carried out by the law enforcement agencies. However, the situation calls for further improvement to restore the confidence of the trade and industry. He cited the example of a leading businessperson whose son was kidnapped for ransom.
Such eventualities shattered the confidence of the business community, which always loves to remain and invest in the safer zone. So, the government has to come out with very positive steps to restore the confidence. On one hand, there is a want of infrastructure as we do not have water, power, and gas sufficient for the local industry and on the other hand, the business community is confronted with the deteriorating law and order situation.
He said because of bad law and order situation and lack of discipline in the financial sector a number of industries have relocated to Bangladesh, Malaysia, Vietnam, Cambodia, Middle East and other places. The shift of local investments to other countries gives a bad message to the foreign investors as well.
Actually, the domestic investors are the backbone and real strength of the economy if they are not happy or unsafe how we can attract the foreign investments. The government should take positive initiatives and offer more attractive incentives and stable environment of doing business to attract global investments, he reiterated.
He is of firm opinion that until and unless the local investors are facilitated with more incentives and policy supports, the foreign investment would not turn up at a massive scale. He cited the example of the Dubai and other Middle East countries that give first priority to the local investors as no foreign investors can do business without participation of the local investors.
Captain Haleem remarked with a resolution in his tone that the key to economic growth is to have faith and confidence in the local investors. Whether they are in loss or profit, they would remain sincere to their soil. The foreign investors come with a single point agenda of harvesting good returns on their investments. Therefore, there is a need of growth based policies to promote local investments rather than looking for foreign investors.