The other day, as I was going through a newspaper and something caught my attention. It was heartening to see Karachi proactively welcoming a corporate giant with open arms to set up its operations in the city. An optimistic and warm gesture for Pakistani investors indeed. Since the last few years, we have witnessed a spirit of ‘competitive federalism’ as countries are competing to attract fresh investments.
Over the years, Pakistan has developed as one of the emerging economies in the world. Despite the gloom and doom surrounding us, the country offers a promising environment for investments, both domestic and foreign. However, the economy is unable to sustain high growth rates for extended periods. Every few years, we are faced with a balance of payments crisis as we strive to grow fast – unlike many other successful peer countries that are growing at higher rates with a long-term framework of policies.
Currently, 64% of the Pakistani population is under 30 years. By 2030, our total population will have increased to around 280 million, 100 million of which will be made up exclusively by the youth. This provides potential investors with a productive, skilled workforce with a strong work ethic.
Pakistan’s enormous domestic consumption, primarily led by the private sector, has played an integral role in the country’s growth. Approximately 80 million Pakistanis are the main drivers of consumption expenditure. This growing middle class and their disposable incomes are the largest factors that led to an increase in domestic consumption in Pakistan.
In a difficult year, this happened in a backdrop of a series of steps to improve ease of doing business, attract investments into building manufacturing capacity, and an ambitious infrastructure projects pipeline. So what followed was a potpourri of initiatives that enabled Pakistan’s investment growth, which includes developing the financial system, improving the infrastructure, and relaxing FDI norms. With no dearth of productive resources, Pakistan remains an attractive and investor-friendly destination. So one cannot emphasize enough the significance of fresh investments as the primary factor for economic growth, job creation, and welfare of society.
We rightly celebrate fresh FDIs year after year. The details about which sector and industry have attracted fresh FDIs are announced with great pomp and show – which is fine.
My only qualm, as a Pakistani citizen, is our power sector, which is in dire need of investment to meet the energy needs of future. It shows immense promise and growth. Extrapolating the investment need in the same sector, taking advantage of investor-friendly initiatives will lead to a full-fledged boom in the volume of electricity and customer base.
It may reduce transmission and distribution losses, and must also entail renewable energy in the generation capacity. Let’s make the investment climate positive and conducive to these initiatives. And rejoice in domestic investments with the same vigor.
Organizations such as these are working proactively towards attracting domestic investments. These are vital, and we should be triumphant about it. Domestic businesses, whether they are public or private, or large, medium, or small, startups, often may be more than the total foreign investments but the cheering is missing.
Pakistan is a difficult place for doing business with a cumbersome investment landscape. Given the limited budgetary support due to enhanced fiscal discipline, scaling private sector participation is not only imperative but inevitable. The struggling nation requires special handholding and positive assurances that their valuable capital injections will be treated with care, to create a conducive investment climate. Domestic investors deserve assurances and facilitation for enhanced private participation, especially in a developing country like Pakistan. Creating a conviction at the government level is necessary to value and support these investments as well. It not only highlights the sectors, but job creation also manifests a more optimistic outlook towards these domestic investments. And to reap the full benefits of such investments, the country needs to improve its investment environment.
It is important to create platforms and opportunities for domestic investors to be able to share challenges, and deal with policy environment, structural and procedural issues, clarity in policymaking, and regulatory frameworks to arrive at actionable solutions.
Investment is a growth driver. If an enabling environment is not provided, it will not only detract further investment but also deter domestic investment. It is high time we kick-start the economy with these drives. Existing domestic companies in Pakistan must be depicted as ‘brand ambassadors’ of the country. They must be showcased as goodwill advocates for future investments. Potential local investors must be welcomed, nurtured, and celebrated to strengthen the path to investment-led economic growth, and avoid the boom-and-bust cycles we are so painfully familiar with.
Investing in Pakistan is important, and those invested already need to be looked after as well.
Copyright Business Recorder, 2023
The writer is a senior journalist. He can be reached at [email protected]) Twitter: @azharskhan
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