Pakistan is going through an 'investment emergency' amid ad-hocism and a lack of transparency in policy affairs, a new report has revealed.
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NEW DELHI — With exports stagnating and cost of doing business skyrocketing, Pakistan is going through an 'investment emergency' amid ad-hocism and a lack of transparency in policy affairs, a new report has revealed.
According to the Federation of Pakistan Chambers of Commerce and Industry, the cost of doing business in Pakistan is 34 per cent higher than that of its neighbours and regional states.
“This pushes the entire gamut of the economy on a slippery note as industries, entrepreneurs and start-ups struggle to stay afloat, having been cowed down at the hands of exorbitant energy prices, illogical and lopsided taxation and an uncertain exchange rate,” argues The Express Tribune.
Also read: India’s tax-to-GDP ratio reaches 19.6 pc, structural reforms key to further gains: Report
FDIs are on a downturn, and no promising investor is taking Pakistan's route.
Several big-ticket businesses have called it a day, “complaining of a lack of a conducive environment, harassment on the part of taxation officials, pestering political instability and poor law and order,” the report mentions.
Moreover, Pakistani products are uncompetitive in international markets, and the slump in exports is one of the main reasons behind the economy not taking off.
Electricity has soared to INR 56 per unit and oil and gas are being imported at a skyrocketing dollar-rupee parity.
Exports have stagnated since 2022 despite global trade recovery in several sectors.
A rescue and rehabilitation strategy is indispensable to save the industry from extinction, said the report.
The recent admission by Pakistan Finance Minister Muhammad Aurangzeb that some multinational companies have left the country due to ‘high taxes and energy costs’ has proved that doing business there is becoming extremely difficult for global firms.
In the recent past, apart from big companies like Procter & Gamble, Eli Lilly, Shell, Microsoft, Uber and Yamaha, scores of companies shifted their offices from Pakistan to Gulf countries and other destinations “in the face of excessive taxation”. Telenor Group has also finally exit Pakistan.
Qatar-based Al Thani Group was the latest among a string of foreign companies to pull out of Pakistan because of the economic uncertainty and political turmoil in the country.