Islamabad, Brigadier (retd) Aslam Khan, Chairman of Pakistan Economy Watch (PEW), has called on the newly formed government to take decisive steps to ameliorate the country’s investment environment, highlighting current energy tariffs and interest rates as major deterrents for investors. During a statement released on Monday, Khan emphasized the adverse effects of high electricity and gas tariffs, along with record interest rates, on both local and foreign investment sentiment towards Pakistan.
According to Pakistan Economy Watch, Khan pointed out that Pakistan’s business landscape is being hampered by some of the highest utility costs and borrowing rates in the region, with interest rates fluctuating between 23 to 25 percent. This challenging financial climate has led international banks to discourage investment in Pakistan, favoring softer investment conditions in neighboring countries like India and Bangladesh instead.
Khan criticized the government’s management of economic affairs and called for a departure from traditional practices, including the necessity to distance politicians from the Ministry of Finance and to protect the Planning Commission from political influences. He argued against the creation of new institutions, such as the National Highway Authority (NHA), which was established under motivations that have led to a significant deficit exceeding twelve hundred billion rupees.
Highlighting the bleak economic outlook for 2024, Khan cited an average growth estimate of two percent, the looming threat of inflation exceeding 20 percent, rising unemployment and poverty, and a challenging trade deficit as critical issues needing urgent attention. He underscored the importance of addressing the tax system’s inefficiencies to support government funding for development and cautioned against the high risk associated with Pakistan’s debt sustainability and external payment obligations.
Khan’s remarks also touched on the perilous influence of political agendas on economic institutions, warning against the potential corruption and destruction of revenue-generating bodies due to political interference. He concluded with a stark reminder that real investment decisions are made based on tangible conditions rather than optimistic rhetoric, underscoring the need for practical solutions to revive Pakistan’s investment climate.