Foreign investment
Prime Minister Imran Khan during his visit to Malaysia besides his usual list of topics including pursuing corruption cases and curbing money laundering, has for the first time laid emphasis on facilitating foreign investment in the country as a way to promote growth. He said the best way to boost country's growth is to promote foreign investment but unluckily in Pakistan when some investors arrive, some section of our society start hue and cry that they are minting money and malicious propaganda is unleashed against them ultimately they are forced to quit the operations. The PM says now it will not happen and we will facilitate them as per their demand.
The new emphasis on investment by the premier should be welcome as Pakistan's investment rate has bottomed out in the past decade. Without foreign investment, no amount of economic growth will help to lift the country out of its cycle of balanceof-payments crisis.
The only question that is left to answer now is how the new government intends to go about this gigantic task. Mr Khan has tasked his new chief at the Board of Investment to create an environment that is conducive for business for both local and foreign investors. The Board of Investment chief, who is a former World Bank staffer, has constituted a committee to generate proposals on how to improve Pakistan's standing in the Ease of Doing Business indicators, and is seeking input from private-sector parties across the board. This is a good start but we need more steps in this respect. For bolstering investment, the savings rate should be raised, documentation of the economy and banks need to be encouraged to venture into areas like agriculture and small- and medium-enterprise lending, and proper coordination should be developed between federal and provincial governments on matters ranging from tax reform to land acquisition. Moreover with strategic overhaul of tax policy, government should introduce trade and industrial policy.
This is just a small part of the spectrum of priorities that should be addressed in pursuit of this goal. The government should focus its energies on generating interest in mega investment deals with structuring incentives to attract international investors. Something along these lines was tried during the prime minister's visit to the so-called investment conference in Saudi Arabia last month. If Mr Khan's stated intention in Malaysia is to be taken at face value, then he has identified for his government a sprawling mission. The target is the correct one, but there should be no illusions about how much momentum will be needed for the effort to be credible and sustainable investment scenario. If PTI truly deem it the last IMF programme, as the prime minister claims, then the government should work on broad foreign investment agenda otherwise we will fail to deliver. It is high time we should realize if Pakistan want to follow the development model of Malaysia or South Korea then we have to create friendly foreign investment environment to fulfill the dream of prosperous and stable Pakistan.