Key Takeaways
- 91% of respondents find doing business in Pakistan difficult.
- Complicated tax system and high energy costs are major obstacles.
- Foreign direct investment remains below required levels.
According to a recent National Citizen Survey, 91% of respondents found doing business in Pakistan to be difficult, highlighting significant challenges for both domestic and foreign investors.
The survey, based on responses from over 5,000 people across the country, revealed that a complex tax system is the principal problem, cited by 46% of respondents. Access to finance, corruption, high energy costs, and government regulation were also major obstacles, with 19%, 12%, and 10% of respondents respectively citing these issues.
These findings underscore the need for substantial reforms to improve the business environment. The survey results suggest that the current conditions are not conducive to attracting the foreign direct investment (FDI) Pakistan needs to support its economic growth and development.
Pakistan continues to attract FDI at levels far below what is required, given its substantial external financing needs and urgent need for investment, technology, and productive capacity. FDI is a relatively durable source of external financing, bringing capital into businesses and productive assets without adding to the country’s debt burden.
The survey also highlighted that 76% of respondents want additional legislation to protect businesses, though simply adding laws to an already complex regulatory environment will achieve little unless existing protections are enforced. Businesses require predictable rules, enforceable contracts, protection of property, reasonable taxation, reliable energy, and access to finance.
Government agencies must facilitate legitimate commercial activity instead of obstructing it. Investors need confidence that rules will remain stable for long-term decision-making. The business environment in Pakistan is described as an economic emergency, as the country has little margin for continued failure.
Despite the challenges, there are some positive developments. For instance, Mercantile and Jaffer Business Systems have partnered to bring Apple devices to Pakistan for corporate use, indicating a growing interest in technology and digital solutions among businesses.
This partnership is part of a broader effort to modernize the business landscape in Pakistan, but significant reforms are needed to address the systemic issues highlighted by the survey. The government and business community must work together to create a more favorable environment for investment and growth.
