THE Pakistan-United States Business Opportunities Conference that just concluded in the capital may not create much business between the two countries, but at least it has furnished an opportunity to revisit some long-standing concerns of investors in Pakistan.

The head of the US delegation at the conference, Secretary of Commerce Penny Pritzker, described some of the challenges that foreign investors face when it comes to this country, and the list turned out to be a bit long.

Some of the items that were mentioned are fairly standard concerns that foreign investors have when doing business in developing countries — but then there are others that merit serious attention.

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The delays in processing sales tax refunds, for instance, have long been an irritant for businesses, whether foreign or domestic, and strengthening the fiscal machinery to do away with this practice of withholding refunds to help jack up the revenue numbers deserves to be addressed on a priority basis.

For its part, the government is likely to be disappointed if it expects large American investment in the areas that have been identified by the commerce minister as a priority. Those areas include energy, infrastructure and the agriculture sector.

Energy investments are hampered by the circular debt and the poor state of governance in the area whereas infrastructure investments are highly politicised. Meanwhile, agriculture is mostly informal in our country, and, subject to the policy framework, is designed largely to benefit large landowners who have links to political parties.

The government would be well advised to devote its energies to addressing the challenges and creating a more stable and predictable environment for investors before it asks for preferential trade treatment, or large-scale investment in areas with long gestation periods.

Nevertheless, it has been encouraging to see such a large delegation from the US at the conference. Perhaps a few investment opportunities can be fruitfully discovered in similar sessions, although two such conferences in the past have not yielded anything to brag about.

Published in Dawn, March 12th, 2015

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