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American Business Council survey: Over 78% American companies say willing to invest more

KARACHI: Over 78% American companies are committed to investing more in Pakistan over the next 12 months, up 13 percentage points compared with 65% in last year, according to a perception survey conducted by the American Business Council (ABC) of Pakistan (ABC).

According to the survey results, the main reason behind the positive trend is the improved security situation of the country. The survey reveals a significant improvement of over 30% in perception of security-related matters compared with last year.

Over 78% respondents have indicated that they plan to invest in Pakistan over the next 12 months compared to 65% from last year.

Meanwhile, up to 83% of ABC investors are optimistic about the long-term economic and operating climate in the country.

However, the members have separately commented that the government’s tendency to introduce mini budgets as well as sudden changes in policies badly damages investors’ confidence.

“Such steps negatively impact existing as well as new investments,” stated a press release.

The perception survey allowed ABC members to rate their satisfaction on various economic, regulatory and political factors that affect the performance and growth of businesses operating in Pakistan over fiscal year 2015-16.

The business climate was rated on each of the various factors influencing it; including implementation and consistency of trade and competition policies, government development budget, domestic market, internal and external political climate and law and order.

For 2015-16, the vast majority of respondents rated the business climate of Pakistan as satisfactory with only 8% giving it a poor rating. This is a marked improvement over 2014-15 when 11% of participants rated the business climate as poor. The overall positive perception of American investors reveals an expectation of some economic stability and an improvement in Pakistan’s economic environment.

With the performance of each of the various ministries directly affecting the business climate, participants were asked to rate the performance of each ministry. In this regard, the overall trend reflects a slight improvement in the performance of the various ministries from last year.

The Ministry of Petroleum and Natural Resources also showed a marked improvement with 78% of participants reporting the performance as fair and 16% reporting it as poor. In 2014-15, just 46% had rated the performance of this ministry as fair and 51% had rated it poorly.

“Our members are positive and remain committed to Pakistan,” ABC President Sami Ahmed said.

Ahmed added international standing and perception is extremely important as Pakistan competes with other Asian players to attract foreign capital in the form of trade exports, human resources and most importantly foreign direct investment.

The ABC is one of the largest investor groups in Pakistan with 67 members most of them represent Fortune 500 companies. They operate in various sectors ie healthcare, financial services, information technology, chemicals and fertilisers, energy, fast moving consumer goods (FMCG), food and beverage, oil and others.

ABC members have cumulative revenues of $4 billion. Their contribution to the national exchequer, through direct/indirect taxes, is approximately Rs102 billion. Its members exported goods worth Rs6.6 billion during 2015.

courtesy : Express Tribune

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