Is Pakistan open for business?

EDITORIAL: When 91 percent of respondents say that doing business in Pakistan is difficult, there is little room left for official spin about improving investor confidence. The latest National Citizen Survey, based on responses from more than 5,000 people across the country, has delivered a remarkably emphatic verdict on the business environment.

Almost half identified the complicated tax system as the principal problem, while access to finance, corruption and bribery, high energy costs and government regulation were among the other obstacles cited. These are precisely the conditions domestic businesses have complained about for years, and apparently with good reason.

The implications go considerably beyond the difficulties faced by existing businesses. Pakistan spends a great deal of time talking about attracting foreign direct investment, sending delegations abroad, announcing investment initiatives and presenting the country as an attractive destination for international capital. Yet foreign investors contemplating Pakistan will inevitably ask how businesses already operating here are faring. If nine out of ten local respondents describe the environment as difficult, persuading outsiders to risk capital in the same environment becomes a rather ambitious sales exercise.

The FDI picture already tells its own story. Pakistan continues to attract foreign direct investment at levels far below what an economy with substantial external financing requirements and an urgent need for investment, technology and productive capacity requires. That weakness is particularly costly because FDI represents a relatively durable source of external financing, bringing capital into businesses and productive assets without adding to the country’s debt burden. Creating an environment capable of attracting substantially larger and sustained investment flows must, therefore, become an economic priority.

The survey also helps explain why the numbers remain so poor. A complicated tax regime was identified by 46 percent of respondents as the biggest business obstacle. Another 19 percent cited inadequate access to loans and financial resources, 12 percent corruption and bribery, and 10 percent rising electricity and energy costs. Taken together, these amount to a formidable obstacle course for anyone attempting to invest, expand, hire workers or compete. Businesses cannot be expected to flourish when they must simultaneously navigate unpredictable taxation, expensive finance, costly energy, bureaucratic interference and corruption.

The finding that 76 percent want additional legislation to protect businesses deserves attention as well, though simply adding laws to an already complicated regulatory environment will achieve little unless existing protections are enforced. Businesses require predictable rules, enforceable contracts, protection of property, reasonable taxation, reliable energy, access to finance and government agencies that facilitate legitimate commercial activity instead of obstructing it. Above all, investors need confidence that rules will remain sufficiently stable for them to make decisions extending several years into the future.

This should be treated as an economic emergency because Pakistan has very little margin for continued failure. The country remains burdened by debt, weak investment, and persistent external financing pressures. Sustainable growth cannot indefinitely depend upon consumption, remittances and repeated recourse to external creditors. Private investment must eventually become a much larger part of the economic equation, and that requires an environment in which businesses can actually operate profitably and with reasonable certainty.

The government, therefore, needs to take this survey as something more useful than another gloomy opinion poll. It is effectively a customer review from the people already doing business in the country. And with 91 percent reporting difficulty, Pakistan’s investment pitch currently appears to have been written without consulting the customers.

Copyright Business Recorder, 2026