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The PML-N’s wide margin of victory in the May elections has brought about a noticeable ‘change in the business sentiment’.
Indeed, the later developments — payment of unpaid bills of power companies as a first step to cut frequency and duration of blackouts; a deal with the IMF to shore up the government’s weakening capacity to repay the outstanding foreign debt, and China’s renewed pledge to invest in large power and infrastructure projects here — have strongly supported this change in the business mood.
The question is if the new government has what it takes to capitalise on the changing sentiment and create an environment required to boost falling private investment in the economy. But there are no easy answers to the country’s investment predicament.
“No doubt the government of Nawaz Sharif enjoys a lot of goodwill and there’s a renewed optimism in the air. However, this sentiment will fizzle out if the government doesn’t capitalise on it in the next one to two years,” argues Raza Jafry, an analyst for a brokerage company.
A majority of businessmen considers Prime Minister Nawaz Sharif as ‘one of them,’ and they are willing to help him. Leading industrialists like Mian Mohammad Mansha, capital market icon Arif Habib, and prominent banker Shaukat Tareen are not only ‘informally’ advising the prime minister on various issues from the energy crisis to restructuring loss-making state-owned businesses, but also mobilising others for investment in different sectors, particularly power generation, to revive growth.
“The businessmen are with Nawaz Sharif, and people like Mansha will not let him down. The government can attract huge amounts of domestic and foreign investment by reviving privatisation of its loss-making businesses,” says another