Businessmen for hefty cut in interest rate and power tariff To lure investment

  • June 29, 2009
Pakistan has witnessed a fall of 47.5 percent in net foreign investment during the first 11 months of 2008-09 causing more contraction in the economic activities and government should make hefty cut in interest rate & power tariff to lure back the investment.
Mian Shaukat Masud, President, Islamabad Chamber of Commerce and Industry (ICCI) said this while addressing ICCI Budget & Trade Policy Sub-Committee meeting. The net foreign investment has come down to US $ 2.2 billion during 11 months of 08-09 as compared with US$ 4.23 billion in the same period of last year.

He said high interest rate, high power tariffs, energy crisis, poor law & order situation and many other factors caused large reduction in foreign investment and government should take immediate measures to address these problems to create conducive conditions for the growth of investment.

ICCI President said foreign investment was one of the major external sources of funding for the government to meet obligations of resource gap and played a vital role in the economic growth of Pakistan. However, the current big fall in foreign investment should be a cause of great concern for the government as it will cause more slumps in the economy.

He said government should rationalize and reduce customs tariffs & duties to facilitate private sector in the import of capital goods including basic machineries and equipments which were necessary for economic development.

Shaukat Masud said the availability of capital goods and machinery would greatly help in putting the economy back on the path of growth and would encourage investment in the country as well. He said prices of investment goods had gone up faster than those of consumer goods and reduction in duties on the import of these goods would bring down their prices, which in turn will stimulate investment in the country.

The members of ICCI Budget & Trade Policy Sub-Committee expressed their disappointment over the fact that government had not announced any smart incentives in the budget for investors to lure more investment in Pakistan. They said the economy has lost significant growth momentum owing to massive contraction in the investment, particularly in the industrial sector and stressed that urgent remedial measures were required to restore the confidence of investors in the economy.