New investment policy to liberalise economy: Pakistani daily

, March 15:

's new investment

seeks to further liberalise the

, said a leading daily ruing that "few investors want to come here".

An editorial in the Dawn Friday said the government has approved a new investment policy and a five-year strategy to attract foreign direct investment.

"The policy seeks to further liberalise the economy, improve the regime protecting new investments and remove regulatory impediments to investment. The government's focus is on raising gross FDI inflows to more than $5bn in the next five years.

"That is an uphill task," said the daily.

It pointed out that the near- to medium-term investment outlook for Pakistan remains negative, "not least because of growing energy shortages, security concerns, political instability, high credit costs, fiscal problems and frequent policy changes".

"It is because of the government's failure to address these critical issues, especially the energy crunch, that private investment in the economy has dried up over the last five years."

The editorial went on to say that local investors are holding back on their investment plans because they do not have enough power or gas to operate their existing capacities.

"Nor do they have access to cheaper credit that encouraged the industry - textile, auto, food - to invest billions of dollars in expansion and technological upgrading during the mid 2000s," it said.

The daily observed that foreign investors do not find security conditions here conducive for bringing in their money.

"With the foreign official capital flows already in short supply due to the financial troubles of Europe and the US, Pakistan must attract higher amounts of foreign private investment, an important non-debt source of financing a country's current account, to push growth as well as support its balance-of-payments position."

Though Pakistan is still considered a more attractive country for investment in the region because of less regulatory impediments to doing business compared with China, and even India, "yet few investors want to come here".

"And they will not come here unless the preconditions - energy, consistent policies, political stability, security - are met," the daily stressed.

IANS