Capital inflow or outflow?

WHILE describing economic policies and programmes of the Government as prudent, Prime Minister Nawaz Sharif has took pride in observing that as a consequence the country was seeing inflow, not outflow of the capital. Speaking at a function of Pakistan Stock Exchange in Karachi, he said PSE is one of the top ten best performing stock markets of the world.
No doubt, the stock index is at the highest reflecting confidence in the economic and financial handling of the Government and forex reserves of the country are also all time high, the Government is also focusing on a number of mega projects, development of the infrastructure which is fundamental to socio-economic development of the country and major economic indicators are positive. However, one cannot hundred percent agree with the Prime Minister about inflow and outflow of the capital as with the exception of Chinese investment under CPEC there are only rare instances of capital inflows for investment. Despite its best efforts and intentions, the Government has not so far been able to ensure ease in doing business as investors are still facing numerous obstacles at the hands of corrupt system and officials. There are also reports, substantiated by the State Bank of Pakistan, about flight of capital and even Pakistan entrepreneurs fleeing abroad to safe and attractive investment destinations. The present Government is considered business and investment friendly but regrettably the cost of doing business is very high and investors are virtually harassed by the concerned officials and departments. Similarly, the Prime Minister has a point in expressing satisfaction over economic performance but the Government has not been able to boost exports. It would not be fair to put all the blame on global recession as lack of required growth in industrial production and competitiveness besides slackness in marketing are also responsible for the sorry state of affairs in the export sector. The Government is running out of time and it will have to do something urgently to reverse the trend.

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