About time
Chief Minister Shahbaz Sharif is clearly trying to go the extra mile to stimulate the province’s business environment. And the two-day International Seminar on Business Opportunities in Punjab is as good an idea as any to begin a fresh initiative. However, it would have looked better – especially since he had gathered potential international investors and their advisors – if the government had something better to sell its business climate than the China-Pak Economic Corridor. In its third year in power, the government sadly has little investment initiatives to offer. Little surprise, then, then there is not much by way of investment – local or foreign – and growth remains stuck in a low bind.
But as spirited a scheme as this sounds, this is definitely not the first time the Sharifs have tried to lure investors. They have made similar speeches and used similar words not just in Pakistan, but also on their frequent trips overseas. Yet there is little follow through. Perhaps the reasons are more deep-rooted than the government would like to admit, and require a medium- to long-term preparatory phase before an investment friendly environment can be created.
For one thing, no one will take these steps seriously till the energy problem is overcome. And foreign investors are smart. They take their cue not from announcements of mega power plants, but from issues like chronic circular debt – that is the real cause behind the breakdown. Local investors, on the other hand, have long been crowded out of the money market because of the government’s obsession with borrowing to stay solvent. Then there are bureaucratic hurdles in the way of setting up businesses that have still not been overcome. The Corridor will no doubt create many jobs and bolster growth – but only to an extent. The government needs to stimulate indigenous growth, and then help attract foreign monies looking for safe investment destinations. If the Sharifs undertake necessary reforms now, they can reset the investment climate by the time they are up for re-election. It is about time they turned their attention to such matters.