With a view to manage fiscal deficit, the government has to provide incentives to the export-oriented industries instead of approaching IMF for loans on humiliated repayment conditions. Pakistan Tanners Association (PTA) Central Chairman Agha Saiddain stated this while talking to Business Recorder here on Wednesday.
He said the government has to focus on investment in energy sector to resolve menace of power and gas load shedding and effective enforcement of law and order for this purpose, and stressed the need for lowering tariffs on smuggling-prone items in addition to enhancing the share of direct taxes in revenue to achieve the key economic targets.
He said that rising risk perception about investing into Pakistan is hitting hard the Foreign Direct Investment (FDI) that fell sharply in recent months and needs to be tackled through a comprehensive policy approach by involving real stakeholders. The worsening law and order situation is one of the major factors keeping the foreign investors away, he added. Agha said that quality production and private sector growth were necessary for the development of any economy.
"Pakistan is a land of opportunities and there is strong need to work together for the betterment of the country," he mentioned. He urged the government to put the resolution of energy crisis as its top priority in order to increase exports and to avert a balance of payments crisis.
PTA chairman said that Pakistan would have to repay US $2.9 billion to the International Monetary Fund in 2012-13 in 12 monthly instalments of $241 million each while the country has already repaid $1.2 billion to IMF in 2011-12, out of the total loan of around $8 billion.
The government has to remove the bottlenecks discouraging foreign and domestic investment, including energy shortages and war on terror after-effects, besides reducing the cost of doing business and announcing consistent policies, he maintained. He was of the view that the said government should adopt the Indian or Chinese model of facilitating its own entrepreneurs and convincing their expatriates to invest in their own country. This policy has paid off for them and it can work for us as well, he added.
In order to tackle energy shortages, the PTA chairman said, the government would have to allocate maximum funds for construction of dams and water reservoirs, tapping of Thar Coal, completion of Iran-Pakistan gas pipeline and establishment of LNG terminals.
He said that the country's reliance on costly thermal power is jacking up the cost of production on one hand and import bill on the other. He said and added that uninterrupted and affordable power supplies could turn Pakistan into an economic powerhouse.
On the worst law and order situation, Agha Saiddain said that it is hurting Pakistan's potential as a highly attractive investment destination. Foreign and local investors are lacking confidence to operate in Pakistan. He said that a number of industrial units had already shifted their operation to other countries.
He said that a number of sectors in Pakistan including infrastructure development, coal, energy, agriculture, livestock, leather, textiles and pharmaceutical offer lucrative investment opportunities to foreign investors but unfortunately due to absence required funding for a proper and well tailored marketing strategy these opportunities are unattended even today.