Initiatives to improve investment climate boost economic activity

The measures, adopted to improve investment climate in the country, helped in boosting economic activity which  has spill over impact on agriculture, industry, textile and other sectors.

The investment regime of Pakistan is business friendly and has guiding principles including reducing cost of doing business, reducing processes of doing business, ease of doing business with creation of industrial clusters and Special Economic Zones, and  linkages of trade, industrial and monetary policies for greater convergence.

Official sources while enumerating key steps taken since June, 2013 to improve investment climate and encouraging Pakistani investors to invest in the country on Friday said Prime Minister has recently constituted a steering committee under his leadership to steer and monitor progress of reforms.

Under the umbrella of steering committee, an action plan has been initiated to improve investment climate and ease of doing business in the country.

The sources said due to these interventions a lot of improvement has been made in various steps involved in business cycle, particularly for SMEs in terms of registering firm, getting construction permit, land registration, paying taxes, trading across borders, access to credit, getting electricity and contract enforcement.

Pakistan is widely recognized to offer extremely liberal foreign investment regime in the region. It is home to rapidly growing private sector leading fast paced market-oriented economy. The potential growth sectors such as infrastructure, power and natural resource are open to large scale investment.

The sources said liberal investment policy has been introduced which includes 100 per cent equity ownership, full repatriation of capital, tax breaks, customs duty concessions on import of plant and machinery and raw materials.

Special Economic Zones (SEZ) Act has been promulgated to promote industrial clusters and to provide one window facility to all local/foreign investors. So far seven SEZs have been notified and some are in planning phase. Notified SEZs are Bin Qasim

SEZ, Karachi, Korangi Creek SEZ-Karachi, Khairpur SEZ, Hattar Industrial Estate-KP, Quaid-e-Azam Apparel Park-Sheikhupura, M3 Industrial City-Faisalabad, and Value Addition City-Faisalabad.  Industries are being set up in these zones, the sources added.

Moreover, Public Private Dialogues were initiated for seeking input of private sector in policy formulation for development of priority sectors. Under this initiative, four Sector Advisory Board (SABs) has been constituted and these were Mining & Minerals, agriculture including livestock & fisheries, IT and Telecom and Industry (Light Engineering including Chemical Sector).

The government also took initiatives to improve energy shortfall. During last year record power of 18,900 MW was achieved. Provision of required energy is facilitating local industry.

Similarly, for improving security and countering terrorism, the government has carried out law enforcement operations to boost confidence of Pakistani as well as foreign investors to invest in Pakistan.

The other steps included reduction in interest rate to 6 per cent which is lowest in forty years of Pakistan's history.

The government has announced new Auto Development Policy in 2016. The new policy is focusing on enhancing competitiveness. This policy has open vistas of local and foreign investment. As a result of this policy a very encouraging response has been received  (14 applications) which is unprecedented.

The government is working vigorously on industrial cooperation under umbrella of China Pakistan Economic Corridor (CPEC). Under this initiative various priority SEZs are being planned for development and to spur industrialization into the country.

The sources said establishment of EXIM Bank would give a boost to export focused SME's in the country by offering businessmen access to export credit and providing insurance of export receivables.

Up-gradation of the Karachi Stock Exchange to Emerging Market Index by Morgan Stanley Capital International (MSCI) is another important development.  Amongst Asian markets, Pakistan remained on top in 2016. It also remained number-one in MSCI Frontier Markets. According to Bloomberg, Pakistan market posted 5th highest return in the world.

The merger of Lahore, Karachi and Islamabad stock exchanges that was pending for past 15 years, was completed. It is expected that in near future Pakistan's stock exchange will be part of  emerging markets.

According to World Bank's Doing Business 2017 report, Pakistan has moved up four places in ease of doing business rankings and is also one of the top ten global improvers.

Investment in Pakistan is protected by the law. Apart from Private Investment Protection Act 1976, Economic Reforms Act 1992 Commercial Arbitration Act 2011 and Recognition & Enforcement Act 2011 have been promulgated.

The sources said due to key initiatives economic activity has gone up and industry has benefitted a lot from ongoing infrastructure and energy related CPEC projects which has spill over impact on agriculture, industry, textile and other sectors.

These initiatives have reduced time taken, cost involved and number of procedures for doing business in the country.

The success and gains from above mentioned efforts is reflected in the total investment statistics since 2013. The total investment of Rs.15,730.35 billion made during 2013-17 which is 55.87 per cent higher than the amount of corresponding period 2009-13 (Rs.10,091.70 billion). Consequently, growth rate of economy has picked up substantially and there is a visible increase in the exports too – APP