US Companies Are Eager to Invest in Pakistan: ABC Survey

Perception about Pakistan in the international market is improving and American companies are willing to invest in the country. They are positive about Pakistan’s long term economic growth but political unrest, policies and undocumented economy are hampering the growth of country.

American Business Council (ABC) has released its annual perception survey about Pakistan’s economy. The results suggest that American companies have plans to invest in Pakistan in the future and almost 95% of the respondents are optimistic about the long term economic and operating climate of Pakistan.

Perception Survey

The perception survey allows ABC members to rate their satisfaction on various economic, regulatory and political facts that affect the performance and growth of businesses operating in Pakistan.

The business climate was rated on various factors influencing it, which includes:

• Implementation and consistency of policies.
• Political outlook.
• Law and order situation.
• Internal and external political climate.
• Government’s development budget.
• Level playing field.
• Impact of undocumented economy.

It also highlighted the three main areas which were hampering growth in the country. These were:

• Weak implementation of policies, 55% of the respondents rated it as being unsatisfactory.
• Political uncertainty, with 57% unsatisfied with it
• The impact of undocumented economy at 77%.

In the perception survey, over 40% of the respondents indicated that the perception of Pakistan had improved when compared to 6% from last year.

The survey gauged the factors that had the most impact on the country’s operations/investment plans:

• Cost of operations headed the list with 87% of the respondents giving it the highest ranking.
• Infrastructure at 84%.
• Law and order at 80%.
• Political uncertainty at 75%.

For 2016-17, the vast majority of the respondents, 45%, rated the business climate as being better compared to the year before when 17% respondents had rated it good. This is a marked improvement.

Overall positive perception of American investors revealed an expectation of some economic stability and an improvement in Pakistan’s economy.

Kamran Nishat, President of the ABC of Pakistan said that the members are very optimistic and see a brighter prosperous Pakistan. International perception is important and how Pakistan can compete with other countries in the region and attract investment.

Financial Survey

In the Financial Survey, reflecting how much the US companies are contributing to the national exchequer, Rs. 135.50 billion was given as taxes to the Government of Pakistan in 2017 as compared to Rs. 119 billion the year before. This is an increase of almost 14%.

However, the exports for the year dwindled by 10% from Rs. 13 billion to Rs. 11.6 billion. Several reasons could be attributed to this, however, the main reason is the harsh Government policies as compared to other countries in the region.

Corporate Social Responsibility

Third survey was titled “Corporate Social Responsibility (CSR)”. This survey highlights the contribution of the American companies to the well-being of the communities and society in which they operate.

The seven sectors in where companies contributed the most were:

• Education -70%.
• Healthcare -55%.
• Women Empowerment -43%.
• Child welfare -36%.
• Disaster Relief 36%.
• People with Special needs -34%.
• Sport development -25%.

An increasing trend was observed as the number of people who had been reached through the CSR initiative increased from 51,800 in 2014 to 61,700 in 2015. And now in 2016 – 68,100 – an increase of almost 10% from the previous year.

Amongst all the provinces – Sindh benefited the most from the CSR activity with 84% of the funds being utilized in the region.