Why foreigners hesitate to invest and manufacture in Pakistan?

It was year 2012 when I went to Pakistan Customs Headquarters in Karachi near KPT. Just like me, many other people were waiting inside a lobby on the 9th floor, outside the cabin of an official; we were staring at each other while waiting for the next turn, while in a queue to progress.

At that time WeBOC and rebate sections were there on that same floor. So, the lobbies were bustling with people, and it felt like rush hour, everyone was moving fast, in hurry, officers, agents and everyone seemed screaming for their piece of flesh (for their job to be done as efficiently and quickest as possible).

Because the queue was very long, and I had nothing to do else, so just like everyone I dig in chat with some random person. That guy worked for a multinational, and he was sent to sort out an issue in some kind of claim settlement.

He said an official from customs was hinder in the way, he further said that the officer asked him for bribe, in his words speed money to fit wheels to the file, but his boss, a Whiteman refused to offer.

His boss said that you guys beg to us foreigners to invest and setup manufacturing facilities in your country, we leave our homeland to do business and make some money in your country but when we come here you put obstacles on each and every step, you people start playing your filthy ploy, why not wind up and I get back to my homeland? But the guy just doesn’t answer, perhaps he was answerless. It is true that instead of facilitating the exporters these activities discourage them to do; they pull back after being fed up due to such circumstances.

Another thing is scarcity of raw material’ sourcing, most of the locally manufactured articles which are mostly consumed domestically are the product of value-added procedure, actually the raw material is still being imported which is nightmare for manufactures because this bounds them to assign additional resources for import material handling lifecycle, which in turn elongate the whole process and sometimes cost more thanks to fluctuation in exchange rates of foreign reserve.  

It means that the whole process of manufacturing and especially export oriented manufacturing is not able to be lucrative and competitive in a trade war in international market. We have never wholeheartedly promoted local industry especially small one, which manufacture components of a whole system; instead we have made import catchier.

Thanks to collective efforts of law enforcement agencies and armed services, hostile elements are minimized to their extinction, but energy crisis is a major setback to industry especially energy prices are very high in Pakistan compared to other parts of the world, which definitely play an important role in costing, in turn our exports become expensive, which turns away the buyer.

Another disheartenment is that FBR on every new fiscal year leech away the existing taxpayers, instead of widening the tax network, it puts more burdens on them, and on the forefront are manufacturers and exporters who have no other choice but to bear. I have no hesitation in saying that our current or previous governments had never planned for collective progress of nation, they all come up with short term hacks, which benefit a very small segment of society. They would have to setup a long term goal of prosperity, of progress.

That is why we are on our way to de-industrialization, if we want the situation to improve, we have to look into all directions and put our concentration on all aspects. One thing for instant is to decrease corporate tax of export oriented companies, there should be a separate tax structure or tariff, instead of giving subsidies or rebate they must decrease tax on their income, so perplexity of claim settlement eliminates, which will simplify the process, and promote corporate culture.

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