KARACHI, Dec 31: The new year sounds optimistic as far as investment is concerned as the new government is now more focus on growth and employment.

Commerce Minister Humayun Akhtar, in a meeting with business leaders has admitted that the situation on industrial front is still very pathetic as no major industrial units have been set up.

He said although banks are liquid the cost of capital still very high when compared with lending rates of other countries. He said banks here are charging 8 per cent interest rate as compared to one to two per cent in other countries.

On customs duty on import of machinery and plant he said it should be zero-rate.

Kamran Mirza President Overseas Chamber of Commerce and Industry, was a bit more optimistic about investment. The three- year military rule has brought some consistency in government economic policies, he said when he was reached over telephone. SRO culture has almost vanished. But he apprehended that if government goes for populist policies that would revert the corrective measure taken by the military regime. He said obtaining loan is no more an easy game. Gone are the days when it would be obtained with one stroke of the pen.

He said some of the factories are installed to their over- capacity. “They need to be utilized to their capacity.” But that requires some generation of economic activity.

Sohail of InvestCap says investors are playing safe. He said they find capital market, money market and real estate better place to invest.

He said law and order is the main hurdle to investment. Investor is very shaky because Pakistan, being frontline state in war against terrorism, still poses threat to investment. He said but the situation is improving and 2003 is a crucial year as for as investment is concerned.