OICCI shares concerns, expectations with PM

Overseas Investors Chamber of Commerce and Industry (OICCI) on Wednesday shared its concerns, expectations, future plans, solutions of economic and sectoral challenges with the Prime Minister Imran Khan. Talking to media after the meeting, Shazad Dada, President OICCI said that the currency has devalued by 50 per cent during the last two years due to which overseas investors felt pain.

He said, policies exist but substantial delays are witnessed in implementations of these policies which shatter the confidence of investors, adding that there is a need to address the gap between policies and implementation.

Shazad Dada, President OICCI, informed the Prime Minister that "OICCI is the largest chamber of commerce in Pakistan based on economic contribution and has always been in the forefront as an FDI ambassador of Pakistan." He said, Pakistan offers great business potential to attract large FDI, currently restricted to less than 1% of GDP as compared to the regional norm of 3-6% and that there is a need for ownership and accountability in promoting FDI. He said the impact of higher discount rate not only affects their consumers but also the companies.

He said, existing foreign investors in the country (OICCI members) are managing with difficulty given the growing regulatory environment. Potential FDI is ready to take business risk but not systematic risk on Pakistan. OICCI which feels that Pakistan Business Council (PBS) has a big say in government's policy formulation argued that the GoP needs to regularly engage with key stakeholders like OICCI to get a first hand feedback of the business environment and economic direction.

The member companies account for third of the tax revenue, provide employment to over a million people and are important contributors to exports revenue. The OICCI member companies have invested $13 billion in the past 7 years.

The OICCI team shared key findings of the recently released 2019 OICCI 'Perception and Investment survey', which indicated that an overwhelming 75% of the respondents recommend new FDI to their parent companies, which is a very positive sign for the economic outlook of the country. The findings also show that foreign investors' view of the GOP is better than what it was in the 2017 survey, with the government now more engaged with stakeholders on policy issues, adding that the government functionaries have better understanding and are more committed and capable to resolve investors' issues. However, only 10% of the investors are fully satisfied with GOP policies and 6% are fully satisfied with policy implementation. The survey also reveals that the governments of Punjab and Sindh are perceived as less investor friendly than the case at the time of the last survey in 2017.

The PM was also apprised of the fact that contract enforcement is a serious issue with 68 % respondents stating that as per their experience it sometimes takes over 5 years' for resolution of commercial disputes.

The OICCI members also presented to PM the key challenges in attracting sizeable FDI in the country with Shazad Dada emphasizing the need for "focused international projection to dilute negative perception of the country, as well as predictability, transparency and consistency of policy and its implementation as key factors for success'.

Shahzad Dada said that resolution of energy sector circular debt is necessary as it has become a monster and elephant in the room for which all the stakeholders should sit together to find a solution.

He further requested the PM to direct the relevant persons to immediately address major issues of tax refunds and circular debt, actively and productively engage with key stakeholders like OICCI, ensure seamless coordination between Federal and Provincial legislations, and make Ease of Doing Business visible and accepted by business. The President of OICCI also emphasized simplification of the tax regime and providing execution capacity and funding to Digital Pakistan Program for accelerated outcomes (in 2018 OICCI had presented to the PM Recommendations on National Program for Digital Transformation). Other important matters such as reducing the high number of regulators and regulations, capacity building, accountability and delivering on promises, such as including protection of IPR, functional SEZs and settlement of pharma pricing issues came under discussion.

The Prime Minister promised full support to foreign investors in addressing their issues and also shared salient points of the government's economic recovery strategy which he said will ensure sustainable economic growth in the medium term and set the country on a clear path for recovery adding that the results of economic strategy will be visible during the next six to nine months.

Imran Khan also appreciated the OICCI for sharing the recommendations for addressing investors' concerns and assured that the government will act upon the recommendations.

The OICCI is the collective voice of all major foreign investors in Pakistan. The nearly 200 OICCI members, from 35 different countries, 50 of whom are associates of the 2019 Global Fortune 500 companies, have a presence in 14 sectors of the economy and contribute nearly one third of Pakistan's total tax revenue and have assets of over $102 billion.

Secretary General OICCI, Abdul Aleem said that IPR law in Pakistan is very good but its implementation is poor due to which overseas companies faced financial losses. Foreign investment in medicines is not coming due to weak implementation of IPR laws. He said there should be a focal organisation to resolve the issues of foreign investors.

CEO Shell Pakistan Haroon Rashid said that fuel companies operating in Pakistan are losing money due to turn over tax of 0.75 per cent. He suggested that the government should deregulate oil products and control prices through Pakistan State Oil (PSO).