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Pakistan aiming for 6% GDP growth - Haroon tells Turkish investors

Special Assistant to Prime Minister on Revenue/Federal Minister Haroon Akhtar Khan has said the government is aiming for a 6 % GDP growth this year on the basis of strong economic indicators.

" Our economy has done very well and we are aiming for 6 % GDP growth this year as reflected by the low inflation rate which is below 4 % and fiscal deficit which is around 5 %," he said while talking to a delegation of Turkish investors and businessmen who as part of the Turkish-Pakistan Business Council met him at the FBR House today.

The Minister told the visiting delegation that Pakistan had gone through some rough times in the past facing the spread of terrorism mostly due to international problems, but the Pakistanis had proved to be a very resilient nation.  "Five years ago the situation was not what it is today. The situation is very good now. We have proved to the world that we are a frontline nation in the fight against terror. We have made a lot of sacrifices. We had a slight political turmoil because of which stock market went down but it has come back again."  

Haroon Akhtar Khan said that he meets a number of businessmen, trade associations and chambers of commerce, including Pakistan Business Council and Overseas Investors Chamber of Commerce, and they always told him that people were hungry to invest in Pakistan. "They come to tell me that profit margins are going up, their business volumes are going up. The fast moving consumer goods are doing very well. That is the strength of our economy. Our international ratings have been improving consistently. Today is the right environment to come to Pakistan."

He further told Turkish businessmen Pakistan had a population of 200 million people blessed with one of the largest proportion of younger people which as per statistics stood around 65 million below the age bracket of 30. "This youth bulge is our strength and that is what we can use in the future."

He conceded that Pakistan had to go through the industrialization route before aspiring to become a fully developed country. "We believe that we need a lot of jobs for the skilled as well as the unskilled labour. Our people go and work all over the world, even in the 50 degree temperature under the hot sun in most of the Gulf countries. They work 18 hours a day, live a very simple life and send back valuable money back home which also helps our economy. We are a resilient people, we are tough people, we work hard. Our labour as compared to many countries around us is also considerably cheap."

The Minister apprised the delegation that the corporate tax rates in Pakistan had come down from 35% to 30% and the government was further reviewing them in the coming budget. However, there were many other advantages to reap for the foreign investors in Pakistan. "We have no inheritance tax, no gift tax, no wealth tax and almost negligible social security tax which is very small as a percentage of salaries. These are the advantages for the foreigners who can also own 100% of their company, can bring investment through their offshore concerns and can own properties here."

Haroon Akhtar Khan said Pakistan knew fully well that its future was in foreign investments and increase in exports. "But let me tell you every Pakistani businessman who goes abroad to do business comes back and the ultimate conclusion he makes is, that one makes more money in Pakistan."

He conceded that there was a culture of red-tapism in the country but that was getting better. "Yes, we had not been fully able to enforce the one-window operation but we are fully cognizant of that. We are not very high in the ease of doing business index but we are working on that. We like businesses to prosper. We do not want to tax them to a point where they stop making money. We don't like to kill the goose because it lays the golden egg. What we want is that while businesses are going strong and making money, the government also makes some money."

He said the government held the companies in the highest esteem by trusting them and believing in their balance sheets. "We give special treatment to the multinationals and large taxpayers because we know they pay their taxes."

He said that while there could be problems with regard to our systems and procedures but the government was ready to help out the investors in all possible ways. "I understand that for a company coming here, the consistency of policies is very important. I know somebody who comes here for investment, does not come for a few months or a year but for a decade. Obviously, companies make feasibility policies on the basis of prevailing policies and if those policies change, that too negatively, that is disheartening for an investor. So whichever government comes in Pakistan in the next general election, already understands that the future of Pakistan and the future of our economy depends on foreign investment."

He said Pakistan's economy was in a better shape now. Previously there were problems with the current account deficit caused by trade deficit and lack of foreign investment. "We have done very well as far as the CPEC is concerned, the Chinese investment amounts to $ 57 billion over the next four to five years. However, more investment together with exports, would take care of our trade and current account deficit. We don't want to go to the donor agencies. We do not want to go to IMF because we want to achieve 7 to 8 per cent GDP growth figure and we like to do that for at least a decade just like Turkey did by achieving roughly 10 % growth for nearly 10 years which turned around Turkey and made it an economic power."

The Turkish investors and businessmen thanked the Minister for briefing them on the state of economy and the investment opportunities available in Pakistan. They told the Minister they had set up their businesses for many years now and could see for themselves vast improvements in the security situation and an increasing level of credibility that Pakistan now enjoyed as an investment destination abroad. They also told the Minister that there were many more Turkish companies and businessmen keen to come to Pakistan due to improvement in investment environment here, particularly the overcoming of energy shortages and the overall feel-good factor the country.

Hamid Raza Khan
Secretary (PR-FATE)
Feb 15, 2018
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