Pakistan easiest place to invest in South Asia?

Society Pakistan & World Affairs
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From DaWN: http://www.dawn.com/2004/10/02/ed.htm
Investment prospects

It heartening to know that in terms of investment climate indicators Pakistan has been found to be a better place than the rest of South Asia. According to a recent survey conducted by the World Bank, the red tape in Pakistan is less time-consuming than in other South Asian countries as it takes only 24 days to register a firm in Pakistan to Bangladesh’s 35 days, Sri Lanka’s 50 and India’s 89 days.

And in losses from electricity outages Pakistan’s average of 6.5 per cent is much better than India’s 10 per cent. However, it is not with South Asian countries alone that Pakistan is competing for foreign investment, which is being courted by the entire world including the most developed countries and the world’s largest market-China.

So, Pakistan needs to improve still further even those indicators in which it has outshone the other South Asian countries and bring at least at par those in which it is behind its regional neighbours.

We could cut the time of 24 days for registering a firm to at least one week if the devolution process that is being carried out in the political arena is replicated in the economic field as well with automation and information technology facilitating decision-making. Also, the losses due to electricity outages could be further reduced if the transmission system is modernized and distribution privatized.

The summary of the World Bank survey mentions corruption as the biggest constraint on rapid and larger inflows of foreign investment in South Asia without, however, disclosing the comparative ranking of each of the regional countries in this respect.

So, it is safe to assume that we are not far behind Bangladesh where bribes amount to three per cent of total sales. Therefore, there is still a lot to be done on this front in Pakistan.

The National Accountability Bureau, with its intrusive operations in the beginning, had brought the economy to a virtual halt and now it is perceived to have become a political instrument in the hands of the ruling elite and therefore much too selective to be of any use as an instrument to curb corruption. The government needs to stop misusing this anti-corruption organization if it is seriously interested in attracting foreign investment.

And last but not the least, we have to do something very quickly, and with some imagination and thought, to improve the law and order situation in the country. This can help correct the country’s image with the rest of the world which sees it as a violent and lawless country.

According to the survey, 63 per cent of the firms said that they were concerned about insecurity and property rights in Pakistan. These concerns spring from a serious lack of rule of law in the country.

Unlike governments which like or dislike a country from the perspective of their national interest, the foreign investor judges a country from the point of view of how safe his money would be and how much profit margin he would be able to make within the law of the land.

So, unless we establish the rule of law and make it stable, foreign investment is not likely to rise beyond a certain point, no matter how close we are to the governments of rich countries.

Anyone have a link to this World Bank report because I couldnt find it.
All of this is a surprise to me, considering how much India has been modernizing. Still, if they could only do something about the Law and order… :frowning:

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fastest time to set up a company is great, but without people willing to set up companies...what is the use?

foreign investment in pakistan is abysmal. to begin with, violence must be curbed and on the decline, not increasing. musharraf has his stated priorities correct. hopefully it will improve.

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You guys don't know anything about economics do you? This is actually a bad thing.

Countries have to control what is being sold 'investment' as Musharraf puts it because if you sell all your utilities then where is your independence?and they have to control the amount of wealth that leaves the country in order to prevent the destabilisation of the economy.

America protects its economy with tariffs and yet tries to make it illegal for anyone else.

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If pakistan puts heavy tarrifs in place already then what kinda stupid drunks do u expect to invest in pakistan? First you gotta establish foreign confidence and a good trade cycle in place then you introduce tariffs (which takes quite a while). And besides pakistani government has little to protect anyways. We don't have many home grown companies in the first place so no one needs protection from foreign companies.

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In what part of my post did I write heavy?

Make your mind up either we have little to protect or a lot. If we have little to protect then why sell what little we do have instead of investment to improve what little we have. If we have a lot then why look towards foreign investment why not become self sufficient?

What really needs to be worked on is the 'brain drain' problem. Why not pay them better wages and keep the skills in Pakistan the same skills we look for from foreign investors.

In Nigeria they can't refine their own oil. A foreign multinational refines the oil and sells the same oil as petrol etc back to nigeria!

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[QUOTE]
*Originally posted by Raihan: *
You guys don't know anything about economics do you? This is actually a bad thing.

Countries have to control what is being sold 'investment' as Musharraf puts it because if you sell all your utilities then where is your independence?and they have to control the amount of wealth that leaves the country in order to prevent the destabilisation of the economy.

America protects its economy with tariffs and yet tries to make it illegal for anyone else.
[/QUOTE]

Basically, what you just said doesnt make much sense either, I feel youre saying that because of your immense hatred for Mushy, just like the other thread, where you accused musharraf of ruining the country with privitization, where as that process started LONG before him.

Let me summarize the original post here:

  • Lesser number of days for a firm to register
  • Decreased losses to due to lower electricity outtages

Apart from this, the author has made some nice recommendations about improving this, so that Pakistan can compete with other countries in Asia. What is so wrong with that? If we allow a call center to open up in Pakistan, we are not selling our 'independence'. Look at India, they are thriving on this literally. PakPatriot's post is good, and it rightly points out that we need to do alot of work if we are to make this work.

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Musharraf likes to take credit for Gwadar and that was in process long before him too.

At least you agree that privatisation is not the way forward.

Basically the type of economic policies that are present in Pakistan today are the type which assume that all investors care for the country they are investing in. The reality is the foreign investors only care about profit , a little speculation and they will dump Pakistan in an instant. Pakistan cannot withstand such a shock.

We are not living in a world where everyone sits holding hands singing 'coom baya' and little fairies granting wishes, countries like investing in other countries for political leverage and the one who has the greatest political leverage on you is the one who owns and runs your utilities.

I have a problem with capitalism and the original post stinks of it.

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I dont think they are talking about big bussiness as much as they are about relatively, small bussiness'. The easier it is to set up a bussness be it a small store or anything else, the more people are willing to do so.
And yes investors are a fickle lot, but thats how things are in a market economy. If we offer them the right atmosphere for investment, and this is a first step then they will want to invest. If we dont, then they wont, nothing wrong with that.