Incompetence main reason for present Pakistan economic crisis

Incompetence main reason for present Pakistan economic crisis

Incompetence is the major reason for the current economic crisis, said Muhammad Azfar Ahsan, Founder & CEO, Nutshell Group.

The Institute of Policy Studies (IPS) hosted a Roundtable titled, “Pakistan’s Investment Climate: The Way Forward.”

Muhammad Azfar Ahsan, Founder & CEO, Nutshell Group; former Minister of State & Chairman Board of Investment (BoI); was the keynote speaker. The Roundtable was a hybrid session, chaired by Khalid Rahman, Chairman, IPS. Ambassador (R) Syed Abrar Hussain, Vice Chairman, IPS, welcomed the guests.

The objective of the session was to explore the current challenges faced by local and foreign investors and the desired economic strategies to overcome the prevailing crisis.

READ MORE: Prices of essential items shoot up by 32pc ahead monetary policy announcement

Azfar Ahsan started his talk with three main issues; lack of vision, lack of political will, and the need for collaboration. “Although I have zero tolerance for corruption, I believe that a significant reason for the economic crisis that we face is incompetence.” He further added that under the current circumstances, doing business in Pakistan is no less than jihad.

Elaborating on investment issues, Azfar Ahsan stated that investors need handholding and assurances, as their profits go back into developing the infrastructure in Pakistan; and one success story creates opportunities for others to follow. Similarly, Public Sector Enterprises (PSEs) must be privatized. PSEs have become a major drain on national resources and the Privatization Commission’s performance is dismal for the lack of expediency and identification of issues.

READ MORE: Current account deficit contracts by 60pc to $3.66 billion in 1HFY23: SBP

Extrapolating on Foreign Direct Investments (FDI), Azfar Ahsan said that the FDI portfolio is less than USD 3 billion, which is not sustainable for a country of over 230 million people. “Our investment climate is challenging for the lack of consistency and facilitation,” he emphasized. Commenting on the turnover and lack of continuity, he stated that he was the fourth BoI Chairman and saw the appointment of the sixth FBR Chairman and fifth Finance Secretary during his tenure.

Talking of FDI, Azfar Ahsan said, “Investors need handholding and assurances, as their profits go back into developing the infrastructure in Pakistan and one success story creates opportunities for others to follow.”

 He insisted that Pakistan must focus on six to eight countries as best case studies, to attract investment. He further highlighted that Uzbekistan and Kazakhstan’s investment strategies are excellent model for Pakistan to follow. These economies have shown remarkable development in a short time. “We need to create a similar ecosystem in Pakistan with a simultaneous focus on G2G, G2B, and B2B.”

READ MORE: Pakistan’s total forex reserves inch up to $10.44 billion

While contemplating China Pakistan Economic Corridor (CPEC) project, Azfar Ahsan highlighted CPEC as a great example of FDI and solemnly noted that not much is being done to productively utilize the opportunity. He said that the Chinese government has already established Special Economic Zones (SEZs) in 22 countries; BoI had recommended that this should be the top agenda in our meeting with China’s President Xi.

The Saudi government has funding available for eight priority sectors. Their biggest desire is to engage Pakistan as a Food Security partner; they want to establish an Agri Zone in Pakistan, in addition to an oil refinery in Balochistan. Unfortunately, the delay has been at our end, as we have failed to deliver ready projects; meanwhile, KSA is investing aggressively in other countries. Azfar Ahsan further added that during his meeting with KSA’s Investment Minister, they designed an investment strategy for both countries, based on an opportunity of a few billion dollars per annum. No progress has been made since then, and the State is only focusing on getting bailouts.

Azfar Ahsan believes it is wrong to blame any political government, bureaucracy, or army for the reasons of lack of investment. This is shared responsibility and shared failure.  “Right now, there is a compulsion to sign an agreement with the IMF, but USD 1.1 billion is insignificant if we compare it to the potential of investment that we have to generate on our own. We can bring in FDI of USD 6 to 8 billion in three to five years and around USD 15 billion in eight to ten years, given a stable framework of policies that is above any political change.”

READ MORE: Accessing foreign currency accounts not under consideration: Dar

Another big concern for investors is the FBR’s function and policies, he said. They feel burdened beyond their feasibility. It has reached a level of exploitation and needs immediate solutions. However, addressing issues this complex, at the national level with an international context we need strong leadership and that is the office of the Prime Minister only. The state’s Prime Minister is responsible for resolving bureaucratic hurdles; in the past, none of the premieres were able to do so.

The attendees praised the roundtable format for enabling them an equal voice in the discussion. They contributed through insightful questions and statements and shared appreciation for a candid approach toward understanding the impediments and finding solutions, which of course begin with a clear vision and meritocracy above anything else.

Syed Tahir Hijazi, former Member (Governance), Planning Commission; Safdar Sohail, Dean, National Institute of Public Policy; Zafar-ul-Hasan Almas, Joint Chief Economist, Planning Commission; and Dr. Shahzad Iqbal Sham, IPS’ Senior Research Associate; economists, government officials, analysts, researchers, and media were in attendance.

Leave a Reply

Your email address will not be published. Required fields are marked *