Karachi: Foreign investors and members of the Overseas Investors Chamber of Commerce and Industry (OICCI) indicated positive investment plans for next few years in country despite security issues, access to energy and governance while having concerns related to contract enforcement, tax refunds and intellectual property implementation.
Perception and investment survey 2011 launched by OICCI represent the collective voice of foreign investors from 33 countries playing a leading role in 14 sectors of country’s economy, contributing 22 percent of total tax collection and 29 percent of Gross National Product (GNP).
Nearly all members intended to continue operating in Pakistan and two-third. Over 45 percent respondents plan to invest more in the next four to five years as compared to the corresponding past period and 59 percent plan to increase their headcounts. Revealed positive business plans show an expectation of some economic stability and modest improvement in economic growth parameters. Total investment indicated by respondents amount to approximately US$ 3 billion over next two to five years, which, though an improvement over the past, is well below the potential and opportunities in the country.
In terms of business prospects, over 80 percent perceive an increase in sales and 66 percent expect their profits to go up. It is expected to increase the contribution to the national exchequer, provide better employment opportunities and have overall positive impact on both the economy and society.
A sizeable percentage of respondents perceive Pakistan to be better or the same for ease of doing business compared to eight other countries whose macro-economic indicators have been far better than Pakistan over recent years.
Rating for various aspects of doing business in Pakistan, respondents were positive about areas like repatriation of profits, access to local finance and efficient corporate governance. However feedback was quite critical of several areas like getting tax refunds, clarity/fairness of laws and regulations and protection of trade marks and Intellectual Property Rights (IPR).
President OICCI commenting on the report said that foreign investors operating in Pakistan are concerned with the Law and Order situation, which is ranked as the biggest challenge facing the business community, closely followed by Energy Supply. Political Instability and High Inflation are other major challenges.
A large number of OICCI members perceive Government Policies favorably but 79% were critical of policy implementation. This is an improvement over the 2009 survey, when over 86 % of respondent were dissatisfied with policy implementation in the country. Foreign investors are highly critical of the concerned authorities as 82% of respondents believe the Government is aware of the issues facing investors, but 91% say it is not serious about resolving them.