The government is working to improve the country’s standing on the ‘Ease of Doing Business’ index from the current 110th position within next two years, Board of Investment (BoL) chairman Dr Miftah Ismail has said.
He said that efforts are afoot to pull up investment-to-GDP ratio from the current 12-12.5 per cent to 20pc with initial thrust towards attracting more local investment.
Despite adverse factors, return on foreign investment is higher at 17pc in Pakistan, he said, adding that the government would revamp systems and legal structures to improve ease of doing business.
He said investment has started trickling down in the power sector but for every dollar invested job opportunities are limited.
Ismail said the government is focused in small and medium enterprises (SMEs) because of higher employment effect. “The SMEs also bring in intermediary technology which is easier to adapt to for semi-skilled workforce of the country.”
The BoI chairman said that in 1990s Pakistan had 20pc investment-to-GDP ratio, therefore, it is achievable if local investor is mobilised. He informed that against 17pc return on dollar investment in Pakistan a good hedge fund in US earns 5-8pc with difficulty. Pakistan’s stock market had been giving 25pc rate of return in dollar term for the last ten years, he added.
“The government has taken measures to attract investment and is setting up special economic zones in all the provinces. All equipment needed to develop these zones, and plants and machinery imported by the industries working there will be duty free,” he added.
In order to meet the energy crisis the government is working on many fronts. LNG (liquefied natural gas) terminal at Port Qasim is coming up on fast track. Since the country needs around 6000mmcfd there is a shortfall of around 2000mmcfd for which the government has decided to allow more private sector companies to participate in LNG trade, he maintained.
Similarly, he said, more funds are being provided to oil and gas exploration companies so that indigenous resources could also be tapped at higher pace to meet growing demand of gas and power. He further explained that the government is keen to explore domestic resources of gas because they are much cheaper than imported. Imported gas costs at around $15 per mmcfd as against $5-6 per mmcfd indigenous gas. It has been decided that gas explored with low BTU (British Thermal Unit) and that which could not be put into the system will be used by nearby power plants.
