78% of US companies in Pakistan plan to increase investment in 2017: survey

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A perception survey conducted by the American Business Council showed that there was an improvement of over 30% in the law and order situation from 2015-16.

Over 78%  of respondents have indicated that they plan to invest in Pakistan over the next 12 months as compared to 65% in 2015 and 83% are optimistic about the long term economic climate.

The members have however separately commented about the government’s tendency to introduce mini budgets as well as sudden changes in policies or rules during the course of a fiscal year. “Such steps negatively impact new as well as existing investments,” the members stated.

The perception survey allowed ABC members to rate their satisfaction on various economic, regulatory and political factors that affect the performance and growth of businesses operating in Pakistan over 2015-16.

The business climate was rated on each of the various factors influencing it, including implementation and consistency of trade and competition policies, government development budget, domestic market, internal and external political climate, and law and order.

For 2015-16, the vast majority of respondents rated the business climate of Pakistan as satisfactory with only 8% giving it a poor rating. This is a marked improvement over 2014-15 when 11% of participants rated the business climate as poor. The overall positive perception of American investors reveals an expectation of some economic stability and an improvement in Pakistan’s economic environment.

The participants were also asked to rate the performance of various ministries directly affecting the business climate. In this regard, the overall trend reflects a slight improvement in the performance of various ministries from last year.

The Ministry of Petroleum and Natural Resource showed a marked improvement with 78% of participants reporting the performance as fair and 16% reporting it as poor. In 2014-15, 46% rated the performance of this ministry as fair and 51% rated it poorly.

American Business Council of Pakistan President Sami Ahmed said, “Our members are positive and remain committed to Pakistan.” Ahmed added that international standing and perception is extremely important as Pakistan competes with other Asian players to attract foreign capital in the form of trade exports, human resources, and most importantly, direct foreign investment.

The ABC is one of the largest investor groups in Pakistan with 67 members, most of whom represent Fortune 500 companies. They operate in various sectors including healthcare, financial services, information technology, chemicals & fertilizers, energy, FMCG, food & beverage, oil, and others.

ABC members have cumulative revenues of US $4.0 billion. Their contribution to the National Exchequer, through direct/indirect taxes is approximately Rs 102 billion. They exported goods worth Rs 6.60 billion during 2015, and directly employ over 34,000 people, with 140,000 dependents, and indirectly employ approximately 1 million people through their networks of agents, distributors, contractors, etc.

The ABC is affiliated with the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) and is a member of the US Chamber of Commerce (USCC), Washington D C and the Asia-Pacific Council of American Chambers of Commerce (APCAC). ABC also has a close working relationship with the US-Pakistan Business Council, Washington, which is a component of the USCC.