The PML-N’s economic team and many in the private sector express confidence that the investment trend will start looking upwards before the close of the current fiscal.

However, as the Nawaz Sharif government completes 100 days in office, the economic data has yet to show signs of change in the investment trends. The banking data released by the State Bank of Pakistan indicate no improvement in the credit off-take by the private sector.

Leading business groups have yet to announce plans for industrial expansion or initiation of projects that they claimed they held back because of their fears about the ‘questionable’ attitude of the last PPP-led government and the adverse investment environment.

“The capital market has been gaining from before. Yes, the level of activity of investors has surged, but nothing significant has yet materialised,” remarked an analyst.

“There is anxiety over the falling value of the rupee and the revision of energy rates, which would inflate the cost of doing investment. The SBP’s policy rate has been hiked by 50 basis points. The IMF’s conditions for stabilisation are expected to weigh heavy on growth efforts as well,” he added.

(Growth provides space for businesses).

“The structural reforms promised to improve the business environment have yet to be implemented. The security situation is far from satisfactory. True, three months is too short a period to judge a government facing severe challenges, but the government needs to pick up pace to sustain the goodwill of the private sector,” commented a cautiously optimistic executive of a leading company.

Muhammad Zubair, chairman of the Board of Investment (BoI), defended the government, which, he said, was perceived as ‘pro-business’ even by its opponents and critics.

“There is a time lag of 10 to 15 months in the materialisation of a project. The investment trend will pick up, but I expect it to gain pace earliest by the second to third year of the current government,” he remarked over telephone from Islamabad.

“I assure you there is a lot happening, particularly in the power sector. I have attended inauguration ceremonies of some five small projects after assuming office in July. We have cleared a long pending motorcycle project for Karachi by a Japanese company. There are many other projects in the pipeline. It will, however, take some time for them to reflect in the national investment data,” he said.

“Structural challenges are not easy to deal with. I have three target areas that I am focusing on: investment to GDP ratio, foreign direct investment, and ease of doing business,” said the BoI chairman, who has worked in the private sector.

“We are starting to gauge the government’s performance against its election pledges. The progress so far is slow, but I am ready to give the government the benefit of the doubt,” commented Kamran Mirza, CEO of the Pakistan Business Council.

“I will be in a better position to respond to investment questions by end-December. The government should go ahead and do what needs to be done,” he said.

The optimists, however, expect fresh investment of Rs150 billion to materialise over the next nine months of the current fiscal, primarily in the power, food and auto sectors.

They also expect the investment to GDP ratio to increase by a significant two to three per cent to about 15 per cent, from the current low of 12.5 per cent.

“Just count the number of foreign business delegations that have visited over the past three months, and compare that to their traffic in the preceding months or during the same period last year, and you will get a sense of the change in the country perception overseas after the change in government,” said a senior official of an economic ministry.

“Foreign investors can supplement, but the trigger will have to come from local investors. Why would anyone risk committing capital when the country’s own people are shy to invest”, admitted another businessman.

“I see more enthusiasm for Pakistan among the business community outside Europe and the US. Regional countries look more serious in investing in Pakistan than arrogant Western companies,” remarked another business leader close to the government.

“The lacunae in the taxation system have bogged us down. We got a patient hearing from the finance minister and the prime minister, and we called on the FBR chief, who promised to redress our complaints,” said Anjum Nisar, former president of the Karachi Chamber of Commerce and Industry, when reached over phone.

“We do not earn to lock money in safe deposits. We like to reinvest and build our businesses. If only the security situation improves, there is no dearth of opportunity or entrepreneurial skill,” said Nisar.