ISLAMABAD: Terming the China-Pakistan Economic Corridor (CPEC) ‘part of the great international power game’, the FPCCI on Wednesday launched a report criticising the government for not taking into account the concerns of local businesses.
The 139-page report titled ‘FPCCI’s Stance on CPEC’ notes that the corridor is a great international power game with deep rooted implications for the region stretching from Pakistan, China, Iran, Central Asia to USA and India.
The Federation of Pakistan Chambers Of Commerce and Industry (FPCCI) report said that there will be a change in ethnic composition of population in Balochistan. However, it dispelled the notion that locals from Balochistan province will not benefit from the project.
The FPCCI report noted that both China and India were economic superpowers as early as mid-1800s and during the 1700s the tax collections in these countries were much higher than that in Europe.
Concerned raised : Among the concerns expressed in the FPCCI report, mistrust of the government and the impact on local businesses took the lead.
“Inflow of Chinese investment and business enterprises will adversely impact the interests of Pakistani business communities – it covers the signing of FTA with China and flooding of Chinese products, inflow of Chinese investments and migration of Chinese labour force to Pakistan,” the report said.
Another important point was the need for transparency in CPEC projects.
A chapter titled ‘Problematic Factors in Doing Business in Pakistan’ notes that several commentators in Pakistan have criticised the project’s finances as being shrouded in mystery, even suggesting there was far too much secrecy and far too little transparency.
The problematic factors for doing business in Pakistan are absolutely different from China.
“The higher tax rates, corruption and inflation are the top most problematic factors for doing business in Pakistan,” FPCCI noted.
“The problematic factors in doing business in Pakistan and particularly the corruption by policy makers through misuse of public funds, favouritism and bribes leads the mistrust on international agreements and foreign projects,” the report added.
It was highlighted that insufficient capacity to innovate, access to funding and inefficient public bureaucracy are the major hurdles in doing business with China.
The FPCCI report cautioned the government to take foreign investments seriously. “The domination of foreign investment in political and economic decision making is limited not only to ‘Banana Republics’,” FPCCI said.
The FPCCI report added, “Unfortunately such apprehensions exists in Pakistan, where lack of trust on politicians and policy makers, favouritism in decision making and bribes and unlawful payments have been observed by the international think tanks.”
It was highlighted that investment in offshore companies and Panama scandal are the worldwide examples of such practices.
The other key concern expressed was the growing role of Chinese investors and entrepreneurs in the public sector service providing institutions.
“It indicates that management of public services are being transferred to Chinese firms by the federal and provincial governments,” the report said.
It added: “After buying locomotive from China, now some major operations in railways are being transferred to Chinese firm, Sindh government is considering Chinese management in Thar Coal development and waste management system in Karachi. The most critical is the acquisition of K-Electric by Shanghai Electric Power Company.”
Published in Dawn December 29th, 2016