- Absence of policies and reliance on miracles
COAS Bajwa has assured local and foreign investors of a secure environment in the country. Security is one of the basic requirements for business and industry to flourish. While recognising that the army operations followed by intelligence based actions have considerably reduced the incidence of acts of terrorism, much more needs still to be done to ensure that incidents like the attack on Chinese Consulate in Karachi do not take place. What is more the provision of security alone is not sufficient to attract the investors.
To start with, foreign investors gravitate to countries which possess a trained and healthy manpower. The measures taken by the previous government in the direction were simply inadequate. Underlining the need for manpower training, education and expansion of health facilities would be futile in the absence of mega funds required to run these projects properly. Unless effective measures are taken to expand the tax net, manpower training on the required scale would remain a pipedream. What stands in the government’s way is the fear of losing voters.
Investors make a beeline to countries with business friendly environment. The laws, regulations and procedures have to be business friendly which they are not at present. There has to be a satisfactorily functioning infrastructure. Two days after Imran Khan expressed confidence in the performance of his cabinet members, including the petroleum minister, gas shortages forced industry closures across Punjab and Karachi. The government is looking for scapegoats now. Again as under the PML-N government, consumers are required to pay for transmission losses caused by the concerned institutions’ inefficiency. This is a disincentive for a potential investor. A recent World Bank report on power sector distortions in South Asia suggests power sector reforms that could save Pakistan’s economy $8.4b in business losses and could increase total household incomes by at least $4.5b a year.
Instead of finalising the deal with IMF and undertaking the needed reforms, the finance minister prefers to live in an ivory tower, telling the nation that ‘Hope is very much in the air’. Running the economy on hope rather than sound policies is like driving a car with fast depleting fuel and a far off destination on hope alone.