Pakistan will be among six fastest growing economies of the world by 2030, Overseas Investors Chamber of Commerce and Industry’s President Irfan Wahab Khan told a group of journalists on Thursday, referring to a report by HSBC, one of the world’s largest banking and financial services company.
Wahab, who is also the CEO of Telenor Pakistan, a Norwegian telecoms giant, was briefing business journalists about OICCI’s role in promoting Foreign Direct Investment and recent economic developments affecting FDI and the overall business environment.
“The doom and gloom scenario that is being portrayed about Pakistan is not justified,” Wahab said referring to the opportunities Pakistan-based foreign investors see in the country.
Pakistan has a large population and only 35% is urbanised, which will increase to 50% by 2020, the Telenor chief said with a particular emphasis on the country’s rising middle class, one of the largest in the world.
Unlike many other countries, the market here has not saturated yet, especially for consumer goods and services companies, which offer opportunities.
Referring to the OICCI’s perception survey, Wahab said 70% of their 200 members (all foreign companies) say they will strongly recommend Pakistan to new investors. He explained that some countries have shown interest, especially in the FMCG and automobile sectors.
He also explained the challenges which will hinder new investment.
Uncertain policies are the among the biggest issues facing foreign investors, Wahab said. Investors come to Pakistan, not Sindh or Punjab, he said while referring to inconsistent regulations that require businesses to deal with multiple regulatory authorities. There is a lack of coordination between provinces and the federal government.
Talking about the parameters that form the overall perception of foreign businesses, he said that the country has improved in terms of energy and security situation, but the tax burden has increased significantly.
If the country has to grow and attract FDI, it has to show solid progress on the World Bank’s Ease of Doing Business parameters, he said.
Pakistan’s rank in the WB index used to be in the 70s, now it is in 130s. “We have proposed to the government to improve this rank to below 100 in three years,” Wahab said.
Pakistan has the world’s fourth largest IT workforce, but it is mostly engaged in basic software development jobs. The country needs policies that ensure skill development. The government needs to implement special economic zones (SEZs) as soon as possible. These plug and play economic zones provide all facilities under one roof, which helps investors save money, and this is the direction the world is moving towards, Wahab said.
“The OICCI members continue to remain upbeat, based on their experience of operating in the country, and they have full confidence in the economic potential of Pakistan,” read an OICCI hand out adding its members have re-invested $10.4 billion in the last six years whereas FDI inflow in the country was only $11 billion. This reflects the confidence OICCI members have on opportunities in Pakistan.
The OICCI president, however, cautioned that these sentiments are dependent upon the expectations that the government will soon unveil growth-oriented economic and trade strategies. Wider tax base, strict enforcement, accountability and capacity building in the key government functionaries are need of the hour. All of these policy measures are critical to revitalise the economy and put the country back on a fast track of economic growth.