Attracting domestic investors a key to economic development- Mahfooz Elahi

  • January 08, 2011
Special emphasis should be placed on identifying the barriers that discourage investment in Pakistan, reliance should be on domestic investment to drive economy out of recession.

Domestic Investment is one of the major determinants of sustainable long-term economic growth but Pakistan’s domestic challenges are turning investors off, Mahfooz Elahi President of Islamabad Chamber of Commerce & Industry has said, addressing a federal investor’s community at ICCI.

He was reacting to the report that Pakistan’s foreign direct investment is tumbling with a significant proportion every year because government had framed no concrete policy to attract foreign investment.

Mahfooz Elahi said that foreign direct investment’s net inflows is less than 2% of GDP while domestic investment’s accounts more than 15% of GDP, so government should play its right cards to mobilize domestic investment that supports economic growth and sustainable development.  

ICCI President said that more stable socio-economic and political environment will boost domestic investment over the long-run period and political environment must be more secure in order to attract higher levels of private investment.

He also said that government should maintain continuity of policies like other countries in the region.

Pakistan’s  fiscal  and  balance  of  payment  situations  and  foreign exchange  reserves  position  is  under  considerable  strain  and  making  the macroeconomic  environment  less  conducive  for investors.  Some drastic  and  far-reaching measures  are  needed  to  reduce  the  fiscal  deficit  on  the  one  hand  and  to  raise  trade surplus and foreign exchange reserves on the other.

ICCI President said that there is a dire need to develop a close liaison with businesses, industries and chambers within the country to increase investment opportunities. He added that to make Pakistan a safe and profitable haven for both local and foreign investors who wish to explore and optimize the potential of the inexpensive labor force, real estate and vast consumer market, the government should offers an attractive package of incentives that compares quite favorably with that of the countries in the region.