Risk issue of business environment in Pakistan – Low Calorie Diets Tips

Several factors have been highlighted as the cause of the country’s economic decline, the looming political uncertainty is at the heart of all these factors. One of the factors discouraging foreign direct investment and local companies is the risk issue of the business environment. The issue was recently highlighted and explained by an entrepreneur and investor known as Bacchus on Twitter.

He explained the issue in a thread noting that Pakistan has a risk problem for the business environment, which is further aggravated by low productivity, which in turn is attributed to low quality of education and training.

He went on to say that higher risk to the business environment leads to higher demands on companies’ return on investment and labor. At some point, this requirement becomes unattainable and hinders normal business operations. He warned that this problem could make Pakistan “uninvestable”. “There are very few successful examples of greenfield companies established in the last 10 years,” he pointed out.

In addition, he listed nine factors that contribute to the risk problem of the business environment;

First, poor or erroneous business environment information and data contribute to the business environment risk problem. Unclear and incomplete reporting of business environment data is worrying the business world.

Second, poor information about the rules and regulations that govern the business climate and the frequent and non-transparent changes to them worsen the business environment. The uncertainty surrounding the business environment is a major issue for the business world. A stable economic and business policy is a prerequisite for successful business.

Unfair and unjust regulations and taxes, where compliance-oriented companies are regulated while others are free from any consequences, is another factor. The non-compliant business entities balance the playing field in their favor and discourage compliance.

Money laundering companies, indifferent to economic returns, oppress their fair and compliant competitors. Black money laundering is a major problem hampering Pakistan’s economic prosperity, the problem particularly affects the fair and compliant businesses.

The undercover hand of influential corporations whose interests subvert market rules and regulations for personal gain is a major problem in Pakistan’s business environment.

Discrimination against successful profitable businesses through increased taxation and regulation adds to the problem. When a company reaches the level where it caps growth in Pakistan, there is an inherent tendency in business rules and regulations to penalize that company rather than further encourage it, thereby hampering its growth potential.

Invaluable human resources due to low quality of academic credentials and untrustworthy experience add to the troubles of the business world. Due to different examination boards in the individual federal states, the educational and examination standards vary and there is no comparable standard. Similarly, high levels of fraud make it very difficult to trust a person’s previous work performance and experience, even fake certificates and letters of experience can be obtained.

Furthermore, Bacchus highlighted unpredictable judicial decisions as the main problem of almost all business people. Business matters are treated insensitively; A single decision can freeze or confiscate a person’s property or business. There is no consensus in the higher judiciary on how to handle corporate-related cases, and the lower judiciary often takes years to rule on business matters, resulting in huge losses for the companies and a lack of trust in the business community regarding runs the judiciary.

Finally, underlying most of these issues is the political uncertainty that has gripped the nation and has particularly impacted the business environment. Companies and investors are usually attracted to a politically stable environment.

Read more: Pakistan is the first South Asian country to introduce NAPs for companies, HRs

These issues need to be resolved to help the country break out of the deteriorating economic situation. Bacchus emphasized that no political party is currently pro-business or anti-regulatory. Despite the urgent need, solving these problems does not appear to be on the agenda of any political party in Pakistan.

These issues are believed to have to be resolved by Islamabad (central government) while whatever issue Islamabad takes note of worsens.

Bacchus also pointed out that solving many of these problems would require constitutional changes, so the legislature had a key role to play in solving these problems.

The Twitter thread goes on to present some recommendations from Bacchus;

  • Consultations and communications should follow changes in policy.
  • Contract and property rights require due process.
  • Restrictions should be imposed on Suo Moto.
  • The discriminatory application of rules and regulations must end.
  • In order to increase the credibility of qualification level assessments, a standardized testing program should be implemented by NADRA at the national level.
  • Freedom of information must be guaranteed.
  • FBR must not only prosecute compliant companies to increase the tax net should FBR prosecute non-compliant companies and tax evaders.
  • Low level companies do not understand the current compliance system (the rules and regulations) so it needs to be simplified to improve compliance.
  • Political parties must compete on economic issues, the problems faced by the business world must be brought to the attention of political parties to include them in their agendas, it will have a positive impact on both; the economy and the political parties.

Read more: PM Khan Holds Monthly Meetings With Businessmen To Facilitate Export

“Our development as a country will be hampered by such an agreement. But business people must have some rights and assurances. The poor need them to increase prosperity and employment in the country. No company opposes a tax as long as it is even and everyone pays,” Bacchus closes the thread.

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