- Trade bodies hope for economic stability following the verdict
- Business, development activities will remain disturbed during the next two months, says SDPI
Apart from the political reactions to the Supreme Court’s verdict on Panamagate case, the business community, which has been facing a situation of uncertainty due to indecisiveness of the court, seems largely unhappy with the verdict.
Talking to Pakistan Today, analysts, leaders of trade bodies and economists claimed that the decision of the court has further led to uncertainty in economic activities.
MA Jabbar, an expert in industry and business, said since Pakistan’s Foreign Direct Investment (FDI), as of today, is largely based on the investment coming from Turkey and China, these two countries have major contribution in the increase of FDI by 12.4 percent in third quarter of current fiscal year from 1st January to end of March. The aftermath of Panama verdict may not affect the investments from Istanbul and Beijing as the current political leadership enjoys better relations with these two countries, but the decision could affect the local investment and FDI from other countries, he said.
The inflows of FDI to Pakistan have increased to $1.6 billion during first nine months as against $1.425 billion the corresponding period of the last fiscal year.
Chinese firms are already committed here by virtue of sovereign guarantee of Pakistan, Sinosure insurance of seven percent, facilitated lending to Exim Bank of China and many others facilities. Though the country may need more loan to bear the pressure of paying back the existing loan, Chinese lenders are much confirmable because the lending against sovereign guarantee under present rule of libor plus 4.85 is very attractive lucrative rate of markup for Chinese lenders, he claimed.
“Unfortunately, being developing country Pakistan lacks the strong institutions; for instance United Kingdom (UK) remained least affected by the much-hyped Brexit despite the fact that UK had unified custom and other taxation system being a part of European Union. We should also learn the lesson from EU countries that in no way a change in leadership should affect institutions,” he added.
On the other hand, Dr Vaqar of SDPI claimed that since uncertainty persisted following the verdict the business and development activities will remain disturbed during the next two months. The government officials especially secretaries may also not take risk of following direction of ministers and political heads, knowingly that their future is uncertain, he said.
However, trade bodies’ leaders seemed confused over the court’s verdict. They, however, welcomed the decision of the superior court in Panama case, saying it will ensure economic stability in the country.
Federation of Pakistan Chamber of Commerce and Industry (FPCCI) President Zubair Tufail said that political parties should honour the decision of the apex court and wait for the examination of the Joint Investigative Team (JIT). He said the decision would ensure economic stability by the end of the current fiscal year because the budget 2017/2018 is to be announced in next month.
Zubair Motiwala, leading industrialist says as the apex court has directed to form a JIT and the decision will be based on the finding of the commission. At least the business community can expect certainty after two months, he said. The overall performance of the government may, however, affect as the government would be under pressure regarding the budget.
According to Mian Zahid Hussain, another trade leader, for the last two months, people and businesses were confused about the political future of the country. Siraj Kassam Teli, Chairman Businessmen Group (BMG) believes the decision will result in political instability.