‘Local investors wary over media trials’

LAHORE: Investment remains elusive in Pakistan as foreign investors want concessions beyond business tradition, and big businesses in the country that have the ability to invest, are looked down by selective media, forcing them to invest outside the country.

Economist Faisal Qamar said the small businessmen paying 1-10 million income taxes cannot raise billions to buy loss making state owned enterprises. The foreign buyers on the other hand demand a guaranteed rate of return on their investments in Pakistan. He said the Pakistani government is not a commercial bank to guarantee fixed rate of return. He said in all business dealings it is the entrepreneur who has to make a business decision to buy an entity, taking the risk of both profit and loss. He said risk free investments are made in fixed bank deposits only.

“Pakistan has some reputable business houses that are always update on their taxes and we hear no scandal about tax evasion from these groups. These groups are very big by Pakistani standards and have been investing in this country in the last five decades, irrespective of the state of Pakistan’s economy,” he added.

The House of Habib for instance kept its faith in the country despite privatisation of the family owned Habib Bank Limited by Zulfiqar Ali Bhutto, Qamar said, adding today this group is the largest producer of high end cars in the country; it owns a jute mill and has shares in a large multinational grocery chain operating in Pakistan. The group owns a tile manufacturing unit, an insurance company, and a fast growing commercial bank. The group, he added pays billions in taxes but dare not participate in any privatisation process and so remains low key to avoid the attention of “yellow channels”.

He said Tabba group owns the largest cement manufacturing facility in the country; operates several textile units, including a state of the art stitching facility. It has invested in the power sector and has acquired ICI Omicron that produces polyester staple fibre, soda ash, pharmaceuticals and other chemicals. He said the group has opened a cement plant in Africa. It has the required resources to take over many loss making state entities if businessmen bashing stopped.

He said the list goes on, which includes Razzak Dawoood Descon, a globally recognised engineering firm, employing over 40,000 workers. “There is Atlas group that are involved in car manufacturing, are largest producers of motorcycles and batteries used in automobiles, power sector and scores of other enterprises,” he said. Last but not the least; he added is the Nishat Group that is in banking, insurance, textiles, cement, power and aviation. Its shopping mall, likely to be operational in April 2016 is the largest and most modern in the region. The group is the largest taxpayer, largest exporter and largest private sector employer. He said it is also the largest target of a select group of media.

Economist Naveed Anwar Khan said none of the big business houses that have created wealth in Pakistan now dare to increase their investment in the country. He said all the ills in the economy are blamed on them. He said vested interests conveniently ignore the smugglers, under filers, the non taxpaying members of parliament and the 1.8 million traders that refuse to come into the tax net. He said the big business houses pay their due taxes and none of the bigger group has ever been convicted on tax evasion.

He said the Federal Board of Revenue (FBR) of course confronts them on many issues which are highlighted in the press but when they are cleared of any wrong doing nothing appears in the media.

Khan said we must take cue from India where Tata, Birla, Reliance group (Ambani), Bharti, Wipro, Mittal, and Godreg continue investing in their home country. They are respected in the society and the chief executive of the country grants them audience at least once in a month.

He said most of the investment in India is made by Indians both residing and expatriate. Investment in Pakistan, he added would also come from these two segments. The government and the society would have to show respect to the Pakistani businessmen residing in the country. He said for expatriates we have to instil confidence through transparent laws that they would not be cheated by the public or by the government.

These people have the cash and resources to take Pakistan to an elevated growth path. “After 30 years of resource bleeding it should now be clear that the government cannot run SOEs,” he concluded.