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Law & order major cause of decline in investment
February 25, 2013

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LAHORE (Feb 25): Law and order is a major cause of decline in local and foreign investment and if government fails to respond to private sector’s call, the economy will continue to slide, resulting in closure of industry and trade.

This was observed by Moody International Pakistan MD Rashid Mehr while talking to The Nation. Inviting attention of the government towards the political uncertainty and deteriorating law and order situation, he said that the economic condition will not improve unless law and order situation in Karachi, in particular, and upcountry, in general, is tackled seriously.

Rashid Mehr, who entered into a business with Moody International in those days when the concept of standardization was fairly new in Pakistan and people had no concept of certification against international quality, but he accepted the challenging job to develop Pakistani market for certification business. Rashid Mehr, who is also founding central president of newly-launched All Pakistan Business Forum, is highly active in highlighting the need for the industry in Faisalabad, Sialkot, Multan, Lahore, Karachi, Islamabad, and Peshawar and worked closely with all Chambers of Commerce in creating awareness.

Ibrahim Qureshi said that on the other hand, the Indian pharma industry supported through a pro-industry regulatory framework has emerged as a global player – without compromising on patient needs.

He said that only way forward for economy is standardization and quality, as it is key factor to lift country’s annual export to $25 billion today from just $8 billion in 1997. “The APBF understands that the law and order is a major cause of decline in local and foreign investment and if government fails to respond to the private sector wake-up call, the economy will continue to suffer with ultimate result of bank defaults and massive layoffs.”

The APBF central president, who is committed to play his role in the revival of economic activity in Pakistan and dreams to have Pakistan enter G20 nations, pointed out that if law and order situation is under control and electricity is made available to the industry round-the-clock, not only the local investors would get an encouragement but foreigners would also be ready to initiate joint ventures with their Pakistani counterparts, thus, creating more jobs.

“The countries that were far behind us a few decades ago are now progressing leaps and bounds, while the economic situation in Pakistan is not satisfactory as the management system is missing in Pakistan.”

In 60s, collective exports of a number of the Far Eastern countries were much smaller than Pakistan but today each country has bigger exports than Pakistan and they achieved this milestone by applying management system which holds individual as well as the whole organization accountable to ensure delivery, he said. At a time when the global trade is poised for faster-than-expected upward growth and climbing out of this painful economic recession by putting people back to work, the situation in Pakistan is heading to a point of no return, he said. The government must reset its priorities as far as the trade and industry is concerned, he said.

“There is an acute shortage of electricity and gas, skilled manpower is in short supply, input costs are very high and Pakistan is fast attaining the status of a trading hub instead of a manufacturing country.”

Provision of security to the businessmen is prime responsibility of the government and it should fulfill its duty. It not only sends a negative signal to foreign investors but also causes brain drain, he said.
He called for macroeconomic reforms and policy changes in consultation with the stakeholders for a sustainable economic recovery, according to a statement.

After the International Monetary Fund (IMF) decision that it will not write-off or reschedule Pakistan’s loan, Rashid said that the government would have to reorganize the power sector, restructure public sector businesses and reduce trade deficit to overcome economic woes, it said. He also stressed the need for a mechanism to ensure in letter and spirit implementation of the economic policy decisions in the larger interest of the stakeholders. “Since gas and electricity shortages are the mother of all economic ills; therefore, a focused attention to stop pilferage and allocate more revenues to overcome the circular debt issue is needed.”

“The power sector infrastructure should be upgraded as without doing so there will be little improvement even if major new generation facilities are built. The government-owned power generation companies should be technologically refurbished as it could close the demand-supply gap by 1,500MW.