Lahore - Given its tremendous infrastructure requirements and untapped potential in every major sector, Pakistan is in dire need of capital investment, SAARC CCI Vice President Iftikhar Malik said on Monday.
“Provided political stability, insulation from external turbulence and conducive macro-economic environment is there, Pakistan can register a prolonged period of domestically driven growth,” he added.
He said the incentives announced in the budget by the federal government for the export-oriented industry would surely help enhance the export volume significantly, besides reducing problems of the farmers, as the budget was progressive, growth-oriented and farmers friendly.
“Now it is the duty of the private sector to come forward and focus on the manufacturing sector instead of investing in real estate sector,” he said, and added, “The step taken by the government will surely help promote exports of the country,” he said.
He said that for the promotion of Hi-Tech industries, the government had reduced the customs duty on the industries, which imported raw material for manufacturing SIM Cards and Smart Cards, from 20 percent to 5 percent.
“Sales tax on the import of machinery related to dairy sector has been slashed from 17 percent to 5 percent,” he added.
To a question, Malik, who is also the chairman of Guard Group, said that the report of Millat venturing into export market had come as a pleasant surprise for him. He termed it a good news of the year for the tractor industry, with tractor sales constantly on decline over the last 5 years.
“Tractor export shows the progress Pakistan has made in the high-tech engineering sector,” he said, and added, “Tractors have been exported through unofficial channels for the last decade.”
He greeted the Millat Tractors on behalf of Guard Group for this achievement, as the Guard filter, being OEM vendor, is also part of this goal achieved by the Millat Tractors.
“Guard Filter, as a vendor, has been collaborating with Millat Tractors for the last 37 years,” he said and hoped that this export initiative would be able to offset the balance of drop in sales.
Guard Group chairman also asked the government to support this sector as more than 95 percent parts of this tractor from tyres , to engine, to transmissions are locally made and this sector creates employment and pays taxes. Tractor is also the most highly localized product of the auto sector, and its export is recognition of its quality and price competitiveness. The govt also should be appreciated for reducing duties on tractor in the budget, he added.
He said that the case for investing in Pakistan is clear. With 200 million people and 60 million middle-class consumers, Pakistan is a rapidly growing emerging market. A large trainable workforce, coupled with favourable demographics and rising domestic consumption, provide a range of compelling infrastructure and corporate opportunities in Pakistan. But the growth and return potential in Pakistan has yet to be unlocked by domestic and international investors.
Former finance minister Dr Salman Shah said that there are substantial opportunities in undervalued assets and companies, an active privatisation initiative, large infrastructure-related investment projects, especially under the China-Pakistan Economic Corridor, growth in local consumption and a largely untapped export potential.
With a massive diaspora of highly qualified executives and a large reserve of domestic talent, capital investing in Pakistan can enter a sustained phase.
Economists said that there are several major policy issues which the government must address in order to unlock Pakistan’s economic and investment potential. First to finance development programmes, tax revenues need to be doubled from the present 9pc of GDP. Second, the endemic corruption in officialdom must be eliminated.