KARACHI, Nov 12: At least 32 foreign companies are planning to wind up their businesses in Pakistan and 122 others may limit their future investment plans because of persisting law and order situation in the country.

According to the Perception Survey 2008, as many as 141 out of total 175 member companies of the Overseas Investors Chambers of Commerce and Industry (OICCI) are not satisfied with government’s efforts for improving law and order.

About 96 per cent OICCI members consider law and order situation as one of the most pressing concerns for investors.

“The government needs to formulate an effective strategy to address concerns of foreign investors if it wants to bring about a paradigm shift in attracting foreign direct investment in the country,’’ OICCI president Waqar A. Malik remarked on Wednesday while launching findings of the OICCI Perception 2008 before the media and members of the Executive Committee of the Chamber.

Based on response of 27 specific questions put to member companies in August-September this year, the survey in words of Mr Malik is intended “to gain insight into overall business and economic climate of Pakistan through the perception of overseas investors in the country’’.

“The general tone of responses from companies is positive’’ he said, adding that findings showed that investors did not limit the inflow of investment in recent times and they had no such plans for future.“All is not negative perception’’ he responded to a question while substantiating his statement that as many as 76 per cent of 175 member companies (133 companies) have shown interest in continuing to invest in the next two years. But, he added, foreign investors had identified numerous challenges and impediments to current and future business. These challenges identified in the survey are law and order, political uncertainty, energy deficiency, the cost of operations and the infrastructure.

As many as 71 per cent of OICCI member companies are of the view that Pakistan is relatively a better environment to do business as compared to several countries in South Asia. However, Pakistan’s non competitiveness with emerging markets such as India, China, Hong Kong and the Middle East is undermining investors’ confidence. “These countries were considered to be better business environment by at least 45 per cent of the respondents,’’ a fact sheet given to the media said.

About 90pc of the respondents were of the opinion that government has not made significant effort to improve the perception of the country amongst global investors, suggesting that government should take an immediate notice of the factors to undermine investors’ confidence.

A non performing domestic economy is another area identified by 72pc of the respondents where the government seems to have failed to attract investors. “Potential investors may remain conservative in entry and expansion unless the domestic economy improves drastically during coming months’’ is the clear message of the survey findings.

Volatility in dollar-rupee parity is another area to have been identified as main impediment for the business. Some 77 per cent of respondents found policies to be inconsistent and 77 per cent perceive inefficiency at the implementation level. Foreign companies consider 35 per cent corporate tax to be highest in the region and an impediment in the business.

Almost all the respondents expressed their disapproval on availability of electric power which is considered to be prerequisite for business. However, this deficiency, the foreign investors believe, can be turned into an opportunity by drawing up policies to attract investment in electric generation and distribution. The government must explore alternative sources of energy. Some 73 per cent respondent expressed negative opinion on water and sanitation situation.

“Pakistan is fortunate to have investors from all major trading partners and the government must capitalise on this strength to attract further investment in agriculture, manufacturing and services sectors’’, Mr Malik observed while offering suggestions to improve overall investment environment in the country.