INP-WealthPk
Investment in export-based sectors to help boost economy
July 05, 2023
Raza Khan
Lack of adequate investment in export-oriented sectors and human resource is a major cause of low exports in Pakistan, said an economic expert. He said Pakistan needs to formulate policies to encourage investors to invest in export-based sectors instead of buying properties and gold.
“Investors are investing in real estate and buying plots, and not showing interest in export-oriented sectors,” economic expert Danish Khan said while talking to WealthPK. He was of the view that capital owners in Pakistan seem less interested in sectors like textiles, leather, sports goods and engendering goods industry due to a variety of socio-political reasons.
“Due to loopholes in the system, people are investing more in real estate in Pakistan,” Danish said, adding that buying and selling plots is much easier in the country compared to starting other businesses. He said investors find it easy to invest their savings in plots to accumulate wealth instead of investing in industry and businesses.
“Buying and selling plots is a less complicated and less time-consuming affair compared to other economic transactions of that size. It also enjoys tax holidays, and owners of capital invest in real estate to save their money from inflationary pressures,” he maintained. Danish said that this trend has also resulted in building housing societies and other infrastructure on agricultural land. “This practice is not only undermining the export potential of the agriculture sector, but also poses a risk to the country’s own food security,” he added.
Due to this rapid decline in agricultural land, Pakistan ends up importing a lot of food stuff, which is increasing its trade deficit, Danish said. “It has also dispossessed farmers from their land and ended their source of livelihood,” he said. He was of the view that Pakistan was not investing adequately in human resource and skill development.
“Lack of investment in human resource and skill development resulted in low productivity in the industrial sector,” he added. Danish said that Pakistan’s industrial sector lacks quality and quantity in terms of production due to unskilled manpower. “If we want to improve our production and enhance quality, we must invest in education, technical trainings and skill development,” he suggested.
He added that Pakistan should also focus on women empowerment to bridge the gender gap in the industrial sector and other businesses. “Pakistan cannot achieve its economic goals unless it invests in women empowerment,” Danish said. He also said that a few industries in Pakistan constantly grabs subsidies from the government, but they are unable to enhance the quality of their products and exports.
He called upon the government to formulate policies encouraging investors to invest in export-based industries instead of freezing their money or investing in property. “Circulation of money is important to running the economic engine of the country,” Danish added.
Credit: INP-WealthPk
