Global Rice News

The Ferozepur Road Industrial Association (FRIA) Senior Vice Chairman and prominent leader of the Pakistan Industrial and Agricultural Forum (PIAF), Shahbaz Aslam, has expressed concern over the challenges faced by new investments in the country’s weak economic landscape. He emphasized the need for the government to take concrete steps in attracting foreign investment to protect the livelihoods of millions of workers across various sectors.

Aslam highlighted the importance of addressing long-standing structural bottlenecks in the investment climate, such as streamlining the FDI approval process. He also emphasized the critical role of economic and political stability in encouraging investment.

The poor economic and political climate over the past year has hindered business and investment in the country. Employment opportunities have not seen significant improvement, and small and medium industries (SMEs), which are major job providers, are struggling due to lack of funds and demand. The textile sector, in particular, has suffered a 50% decline in both domestic and export markets, while the auto sector is operating at less than half of its capacity.

To revive the economy, Aslam urged the government to provide special incentives for cash-strapped SMEs, which make up more than 90% of business enterprises in Pakistan, contribute 40% to the GDP, employ over 80% of the non-agricultural workforce, and generate 25% of export earnings.

He also called for significant reductions in import duties and the waiver of sales tax, income tax, and additional income taxes to alleviate the economic crisis. In addition, steps should be taken to ensure the repatriation of earnings for existing foreign investors and to attract new investments by creating an enabling environment with economic stability and a favorable rupee-dollar parity.

Aslam noted that although China has been a leading investor in Pakistan in recent years, the slowdown of economies in developed countries may affect incoming investments. However, Pakistan still remains a potential market for foreign investors, who are waiting for economic stability before making fresh investments. The uncertainty in the rupee-dollar parity and a slowdown in the economy have impacted business confidence. Therefore, it is crucial for the authorities to create an enabling environment for local businessmen and raise the country’s tax base to improve the tax-to-GDP ratio.

Additionally, Aslam encouraged trade officers to diversify exports of goods and services, particularly in European markets. He also suggested strategies for promoting Pakistani products and taking advantage of opportunities presented by the China-Pakistan Economic Corridor (CPEC).

Overall, addressing investment challenges and promoting economic stability are key to attracting foreign investment, creating jobs, and boosting the Pakistani economy.

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