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Foreign Investment and Economic Stability

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Foreign Investment and Economic Stability

Undoubtedly, the increase in foreign exchange and the increase in exports are indispensable for a stable economy. Photo: File

Prime Minister Shehbaz Sharif has emphasized the importance of local production for increasing the GDP and has expressed strong determination to increase exports and asked the government to fully cooperate with local and foreign investors investing in Pakistan. .

The Prime Minister was met by the chairman of The Centaurs, a leading business group of Saudi Arabia. On the other hand, the Federal Finance Minister has said that we need reforms in the structure of the tax system, increasing exports is inevitable for economic stability.

Undoubtedly, increase in exports is indispensable for the growth of foreign exchange and a stable economy, we have to increase the rate of export through internal and external investment, for which the private sector should find new opportunities. In particular, there is a need to take special measures regarding the increase in Pak-Saudi investment and export, and for this, there is a need to increase the capacity of our institutions so that exports can be increased and unemployment can also be reduced through investment.

Currently, there is scope for investment in agriculture, textiles, information technology, pharmaceuticals, mobiles, sports equipment, minerals and various other sectors. On the other hand, if the local industry has become capable of exporting, it should be provided incentives so that it can export its production. Through these mechanisms, the productivity of the local industry will be highlighted. Investments will increase, production and exports will create employment opportunities and the government will get much-needed revenue.

Political stability and socio-economic strength are essential to encourage foreign investment. The presence of investment protection laws and the right atmosphere of competition in the local market create attractiveness for investment. This is the reason for investment and there is no reason, if the economy is completely free, the foreign investor will prefer the market where there is stable government, peace in the country, rule of law and socio-economic harmony.

As important as stable governance and economic and social cohesion should be, it is important to drive the economy towards growth, which is possible through investment in technology and value-added industries and international financial institutions. Adapt the policies to suit local needs. Further, we have to adapt the concepts of the World Bank and the International Monetary Fund to suit local conditions and the needs of economic development, we have to harmonize international thinking with local commitment.

The example of a country like Malaysia proves that as long as the country has adequate reserves of resources and foreign exchange, an industrial policy can be formulated that simultaneously protects and promotes industries that export, which are import substitutes. And there are key industries. The automobile industry, for example, can be nurtured and brought up to international competitive standards. The automobile industry in India, for example, plays an important role in tax collection.

This industry has achieved this position by concentrating efforts on component manufacturing and value addition. Not by simply assembling parts and making vehicles. The country’s resources, including an excellent workforce and an active business community, enabled a 4 percent increase in gross national product at a time of social and economic hardship. Enrichment in national production was possible at a time of uncertainty due to various reasons, but the government’s strategy was clear even though it was incomplete and unbalanced. With better guidance, experience, expertise and foresight, we must believe that these national problems will be solved.

On the other hand, these reports are encouraging that in the next five years, Pakistan has prepared an investment plan of 249 billion dollars in three sectors with seven friendly countries. Presented. Pakistan will invest 102 billion dollars in the next 5 years to increase foreign investment in agriculture, exports, MoU on 300,000 acres of land has been signed with Saudi Arabia, France, Bahrain, UAE and China.

In agriculture during the next 5 years, Pakistan can earn 20 to 30 billion dollars from foreign investment and a potential profit of 42 billion dollars can be in export substitution. Three lakh new jobs will be created in the agriculture sector. In minerals, Pakistan is expecting a revenue of 51 billion dollars from foreign investment and increasing exports in the next five years. Going to do, $14 billion profit in minerals could be in export substitution.

Increased exports in minerals could generate $16 billion in profits, while 200,000 jobs would be created in the mineral sector. Apart from this, Pakistan is expecting an investment of 51 billion dollars from foreign investment in the IT sector, by increasing export alternatives, Pakistan can earn 20 billion dollars from foreign direct investment in the IT sector.

The IMF and other financial institutions not only demand a change in fiscal policies in terms of debt recovery, but sometimes they also give instructions to widen the tax net while demanding an increase in energy prices. Negotiations are also going on in the IMF and FBR to increase the tax net. It is necessary that the rulers, instead of accepting all the conditions of the financial institutions, also tell their needs and constraints and the difficulties of the common man while increasing the tax net. Keep an eye out.

Energy prices are already higher than all countries in South Asia. If the IMF directives are increased further, the cost of production will increase and Pakistani goods will become more expensive and will not be in a competitive position in the global market. If they continue to follow the instructions of the international financial institutions, Pakistan can become a market for foreign goods, as long as the rulers will continue to follow the instructions of the international financial institutions more than the payment of duties. The goal of reduction in burden cannot be achieved.

The savings rate in Pakistan is the lowest in the region. Seventeen billion dollars are given to the elite every year for the sake of free oil, free electricity and housing, etc. There are more than 100,000 in which a lot of money can be saved by reducing it to a reasonable extent. In view of the thin economic condition of the country, there is no justification for paying salaries and pensions to approved persons in foreign money. Moreover, those who complete the period of employment should be given pension only as long as they remain in the country. Those who live abroad after retirement can save a lot by canceling their pension.

Strengthen the country by paying Pakistani taxes and also develop your business, no one can succeed by evading taxes, regional trade is very important to increase exports, for this, regional trade has to be increased, domestic investors Therefore, the interest rate has to be reduced because finance and funding for investment is very expensive, who will accept the challenge of setting up industry at 22%, exports and foreign investment have to be increased for the improvement of the country’s economy, the government has to increase its expenditure. It has to be reduced, revenue has to be increased, trade with regional countries has to be promoted.

Trade can be improved by improving relations with Iran and Afghanistan, Afghanistan is very important because it has access to Central Asia, barter trade with Iran, rice, wheat, food, medical and surgical equipment can be exported to Iran. Yes, China and India have not ended trade relations despite border disputes, our trade with India should continue, we are missing out on the benefits that could be gained from trade with India, timely payment of tax refunds by FBR exporters. To be sure, if the refunds are paid, the exports will also increase.

Foreign Investment and Economic Stability

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