- And learn to address governance challenges?
While under pressure from a barrage of bad reports about the government’s performance, it should be a matter of satisfaction for the PTI leadership that a number of countries are willing to sign MoUs for investment, beginning with one on industrial cooperation with China last month. While MoUs are not legally binding they could be the first steps towards a legal contract. Unlike treaties, they take a short time to ratify and if during the talks it is discovered that one of the parties had very different ideas of how the business should be built, it can wriggle out without any legal consequences.
We are told that MoUs for Saudi investment worth over $10b will be signed this month while those with UAE in February. Four Malaysian firms are also due this month supposedly to invest in four sectors — halal meat, gemstone, information technology and hi-tech education.
As the investments will be made in various provinces it would be helpful if a prior approval is secured from the provincial governments. These governments should also have a role in the oversight of these projects’ implementation. One welcomes the idea of requiring all foreign firms to invest in joint ventures with domestic firms. There is a dire need however to avoid the type of conflict of interest that many saw in the award of the Mohmand dam.
What one gathers from these reports is that Pakistan holds promise for several major investors.
But the investors confront major disincentives also. Absence of better law and order and ease of business were spelled out by the BOI chairman on Wednesday.
Others were pointed out by Chinese ambassador Yao Jing. Among the constraints that hinder foreign investors, he said, are inconsistent policies, high taxes, no tax incentives and lack of business-friendly environment. This is why while relocating their businesses from the US Chinese investors prefer to go to India or Indonesia.
It remains to be seen how PTI leadership and its entire government machinery which has remained totally fixated since coming to power on berating its predecessors will find time to deal with crucial governance issues faced by the country.