‘Pro-business climate crucial to gear up economy’

Adverse business conditions deterred local, foreign investors: FCCI.



FAISALABAD: Business and investment -friendly environments are the top mobilising forces to speed up money circulation in order to gear up business, trade and industrial activities in the country, said Faisalabad Chamber of Commerce and Industry (FCCI) President Mian Zahid Aslam. Resultantly, it will jack up the gross domestic product (GDP) and economic growth of Pakistan, which is presently the lowest in the region.

He said that under the prevailing economic situation, business activity had become stagnant and it will be impossible to achieve the fiscal deficit target of 4.7%. Fiscal deficit is unlikely to be contained below 6% for the current fiscal year, he added. He continued that foreign direct investment had already declined 67% to $87 million during the first quarter of the fiscal year 2012-13 against $263 million in corresponding quarter last year.

Discussing the root causes, Aslam said that the energy crisis, lack of good governance, deteriorating law and order situation were the major factors hampering mobilisation of domestic investment and deterred foreign investors away. He feared that the country had paid interest and principal to the tune of $1 billion in October 2012 and loan repayments were due by the end of December 2012 and January 2013 which will further deplete the country’s foreign exchange reserves pushing it into balance of payment crisis.

He said that scheduled banks were opting to lend to the government by buying risk-free sovereign securities and avoiding giving credit to the private sector. Resultantly, year-on-year growth in credit to private sector declined from 22.4% in fiscal 2008 to 0.7% by the end of fiscal 2012. Due to this, economic growth, employment and foreign exchange figures worsened significantly, he added.

He urged the government to understand the gravity of the situation and take all stakeholders on board to identify ways and means to mobilise domestic investment.

Published in The Express Tribune, November 20th, 2012.

COMMENTS (1)

Hasan | 11 years ago | Reply

Poorly written and illogical.

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