Whichever way you slice it Pakistan is not a good place to invest. At least that is the message coming from the latest Global Risk and Resilience Index developed by consultancy Henley & Partners along with AI-powered analytics firm Alpha Geo. The index places Pakistan at 222nd out of 226 countries, ahead only of Sudan, Haiti, Lebanon and South Sudan. It is clearly not good to be in the company of those countries, which all have conflicts of one kind or another, and which have recently suffered some form of societal collapse. At the same time, the problems mentioned in the report exist, and until they disappear, the lack of confidence in Pakistan as an investment destination will continue. They include persistent concerns over economic stability, governance and investor confidence.
An interesting aspect of the Index is that it measures resilience, and includes climate factors. As Pakistan is measured consistently by various indices as one of the country’s most vulnerable to climate change, this is an important metric for it, and shows that climate change does not just have direct economic effects in terms of production lost or damage to infrastructure, but in terms of investment decisions. Foreign investors do not need to be doubtful that the road to their plant will remain, and not be washed away by the next monsoon. Getting a foreign enterprise to invest in a Special Economic Zone is tough enough, without having to give assurances that the SEZ will be there for the foreseeable future. Not enough attention has been paid to the climate and the environment as factors in economic decision making, and this index will probably have role to play, apart from being a sign that investors are finally waking up and realizing that the old assumption about stable climatic conditions no longer applies.
That is something the government cannot do much about. Even if climate justice prevailed, which it does not, the government can at best alleviate, but not eliminate, the effects of climate change. However, things like economic stability and governance are things that governments are supposed to do well, and investor confidence will follow almost automatically, because while the effects of climate change are severe, they will not stop Pakistan being a favoured destination if the country is well-run and economically stable. It is for the government to realize that creating that stability is the task ahead of it.
2f9guv