Although we know that Pakistan is among the most populous countries in the world having a huge consumer market, and potential room for many businesses to grow, but businesses are still showing stagnation in their expansion.
According to recent data from the World Bank, Pakistan is the 5th most populous country in the world, having a 64-percent population below the age of 30, which shows strength and capacity. In addition to this, the country is abundant in natural resources, and a big labor force indicates myriad opportunities. But regardless of all these opportunities, Pakistan is still lagging in developing a good business environment.
From the inception of Pakistan until now we have never bothered ourselves to capitalize our resources and utilize this huge chunk of an energetic and young labor force.
Contrary to this, looking to regional competitors India and Bangladesh, they have created a sustained environment for businesses growth in a very short span of time.
Another factor that has contributed to this sluggish business growth is our investment-to-GDP ratio which is very low in comparison to other competitors in the region. Our credit to GDP ratio is 18 percent, which is quite lower than India and Bangladesh.
In addition to this, another key factor is the government has high credit demand from the banking sectors. Besides this, we have failed in providing a sense of security to the business community by making better bankruptcy laws.
Moreover, Pakistan is very slow in the race for innovation and entrepreneurship, using technology and modern methods for the sustained growth of businesses.
Apart from all these things, rent-seeking is a widespread activity, the FBR also needed to make such policies, which are business-friendly, rather than business-choking.
There is a wider list of barriers that had contributed widely not to spur the businesses growth, but in the era of global competition, governments need to give much more attention to policies and bring rigorous reforms.
Also, to incorporate changes in Monetary and Fiscal policy; accordingly looking at the circumstances. Also, we need to work on best legal practices, provide better legislation and give a sense of security to bring back foreign direct investment (FDI) to the country, which will help in developing the business environment and businesses will be tracked on the trajectory of growth.
