LAHROE - With a view to manage fiscal balance, the government has to give incentives to export-oriented industries instead of moving to IMF for further loans on humiliated conditions.

For this purpose, government has to focus on investing in energy solutions and enforcement of law and order while lowering tariffs on smuggling-prone items, increasing the share of direct taxes in revenue to achieve key economic targets, observed PTA central chairman Agha Saiddain.  He said that rising risk perception about investing into Pakistan is hitting hard the Foreign Direct Investment (FDI) that fell sharply in recent months and needs to be tackled through a comprehensive policy approach by involving real stakeholders. He said that the bad law and order situation was one of the major factors keeping the foreign investors away. 

He said that Pakistan would have to repay $2.9 billion to Fund in 2012-13 in 12 monthly installment of $241 million each while the country has already repaid $1.2 billion to IMF in 2011-12, out of the total loan of around $8 billion.  He said the government has to remove the bottlenecks that discouraging foreign and domestic investment, including energy shortages and war on terror aftereffects, besides reducing cost of doing business and announcing consistent policies.

The business leader said government should adopt the Indian or Chinese model of facilitating its own entrepreneurs and convincing their expatriates to invest in their own country. This policy has paid off for them and it can work for us as well, he added.

In order to tackle energy shortages, the PTA chairman said, the government would have to allocate maximum funds for construction of dams and water reservoirs, tapping of Thar coal, completion of Iran-Pakistan gas pipeline and establishment of LNG terminals. He said that the country’s reliance on costly thermal power is jacking up the cost of production and import bill.