LAHORE: Board of Investment (BoI) Additional Secretary Ambreen Iftikhar said on Thursday that ‘Invest Pakistan’ initiative was being launched keeping in view the fact that in year 2021, US $ 175 billion were invested in South Asian countries out of which Pakistan could attract only US $ 2 billion foreign investment.
She added that Pakistan needed to take effective and appropriate measures to increase its local and foreign investments, adding that under ‘Invest Pakistan’ initiative, a national framework for investment would be developed at first.
She was briefing the business community at Invest Pakistan Concept Launch Event here at Lahore Chamber of Commerce & Industry (LCCI) where LCCI President Kashif Anwar, BoI Director General Zulfiqar Ali and Director Adnan Munir Rajput also spoke, while the chamber’s Executive Committee members attended the event.
The Additional Secretary said that process through which BoI would encourage investors to invest in Pakistan, would be based on investors’ targeting.
She said that national framework would not only notify the investment but also help operationalize it and facilitate the investors by identifying and realizing them regarding investment opportunities.
Ambreen Iftikhar said, “Apart from this, we are taking the budget proposals in a different way. Because of the IMF conditions, we have suggested that these conditions should be shared with the private sector so that they know which policies cannot be changed and which policies have the scope. Under this new process, the suggestions of the business community will be brought into the finance bill so that they can be implemented easily.”
She added that BoI wanted all the chambers to introduce a joint plan, and ‘we understand that the business community is currently facing many challenges but the most important thing is that the government cannot solve these problems alone but we all have to come up with a joint solution because these are common problems.’
BoI Additional Secretary said, “We want to attract our own investors before the foreign investors. To know the needs of the investors, we are working on the investor targeting model.”
LCCI President Kashif Anwar said that Lahore Chamber had always emphasized on simplifying the rules and regulations, and making these business friendly so that the business climate could be improved in the country, asserting that this would definitely help in promoting ‘Ease of Doing Business (EoDB)’.
He said that LCCI had been working with provincial government and the World Bank for many years to improve Pakistan’s ranking of EoDB, which had helped brought Pakistan EoDB ranking to 108th from 148th. Lahore Chamber also held many meetings with relevant authorities in this regard and had always talked about simplifying regulatory complaint because it created many eases for local and foreign investors to make investments and set up new businesses, he mentioned.
“Although the World Bank had stopped issuing EoDB rankings after 2020, we commend the Board of Investment’s management for taking new initiatives to advance the reforms agenda in collaboration with the federal and provincial governments. To our opinion, promotion of local and foreign investment is need of the hour, ” he added.
According to the Economic Survey of Pakistan, the ratio of total investment in Pakistan was only 15 percent of Gross Domestic Production, which was quite low. The share of private investment in this was only 10 percent of GDP, which had become inevitable to increase. “We hope that PRMI (Pakistan Regulatory Modernization Initiative) and Invest Pakistan will be helpful in this regard, ” he added.
He said that as per data of Net Foreign Direct Investment, it was US $ 2.6 billion in FY 2019-20, which decreased to US $ 1.82 billion in FY 2020-21, while in 2021-22, its volume was limited to only US $ 1.87 billion, which was extremely low in terms of requirements. He said that the local investment could not increase until the problems of local industries were resolved. “For example, our industries have to import a lot of raw materials, essential components and various machinery which are not available in the country, on which they have to pay 100 percent cash margin, regulatory duty, customs duty and additional customs duty, which are needed to be eliminated. Besides reducing the rate of withholding tax for businesses, the issues of pending refunds and multiple audits should be resolved, ” he added.
He said that in order to promote local investment, the government had to solve some problems related to taxation on a priority basis, which would also improve the ease of doing business. Currently taxpayers had to undergo multiple audits of income tax and sales tax, the business community appealed that the number of these audits should be reduced. He said, it was almost impossible to increase investment without reducing the cost of doing business. “Our industries are facing problems like policy rate which has reached up to 17 percent and high energy cost due to which the production cost has increased a lot.
The economic conditions require that the government should give first priority to import substitution and give second priority to increase exports to the desired extent, which we think can be possible only with industrialization and localization, ” he added.
Mian Kashif Anwar said that Board of Investment also needed to attract private investment to build new dams and reservoirs. “We should also expand the solar energy network as we still get less than five percent of our energy requirement from it. It will also help in bringing the imports to minimum level.”
He said that with the help of Special Economic Zones, the process of industrialization would be strengthened, but if they were considered as Special Export Zones, it would be very easy to invest in them as well as increase exports.
The LCCI President said that the government should immediately announce the Declaration Scheme so that the undeclared foreign reserves could become part of the economy. He informed the participants of the meeting that the Lahore Chamber of Commerce and Industry had asked heads of the political parties to share their economic plans with the Lahore Chamber.