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Are foreign investors scared to come to Pakistan?

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“Since, the Supreme Court verdict against privatization of Pakistan Steel Mills (PSM) in 2006 offered grave consequences, the decision of administering Bahria Town and PM Housing scheme under government supervision has mixed implications”, said Arif Habib, industry tycoon, speaking to Doctor Moeed Pirzada on his prime-time show “Live with Moeed Pirzada” at GNN on Monday, December 10, 2018.

Bahria Town Karachi’s employees, residents, investors, and property dealers have been protesting the financial meltdown that Bahria Town Karachi is facing due to the on-going Supreme Court case of the MDA land swap, as a consequence of which thousands of Bahria Town employees are losing their jobs and there has been a massive power outage for several days. According to the employees, Bahria Town hasn’t been able to pay them salaries for the past six months and it is being driven into the ground.

“The hurdle in the privatization of Pakistan Steel Mills was the contradiction in policies which degrade the country’s image for investments”, Arif Habib said.

The matter has been highlighted in the media over the course of the litigation. The immediate trigger for the protests has been the shutdown of electricity in Bahria Town Karachi as a result of government implementation of recent Supreme Court decisions, however, the issue has been developing for the past several months, GVS earlier reported.

Apex court had created an implementation bench in pursuit of its May 4, 2018 decision, in which it declared illegal the 2013 exchange of land between Malir Development Authority (MDA) and Bahria Town Karachi. Sources inform that around 18,000 acres of land were exchanged between MDA and Bahria Town, in December 2013, under the policy of consolidation which was first invoked in 1982.

Putting the 50-lac housing PTI’s scheme and Bahria Town decisions on quorum, Dr. Moeed Pirzada enquired of the guest as to how the government’s decision of reassessing the Bahria Town projects should be perceived.

Read more: Bahria Town in Trouble? Employees, Residents & Customers protest

Arif Habib responded that since the Supreme Court verdict against privatization of Pakistan Steel Mills (PSM) in 2006 offered grave consequences, the decision of administering Bahria Town and PM Housing scheme under government supervision has several implications as similarly, the Supreme Court judgment on Reko Diq; the CDA performance in regularization and maintenance of Land especially the I-sectors (I-12, 13, 14 and 15) and the Karkey project lack the pragmatic approaches on behalf of government, the industrialist said.

He also told the anchor that currently Pakistan is facing billions of dollar dilemmas in International Court of Arbitration aggrandized by Reko Diq and Karkey government reversals from agreements.

Governments sometimes introduce fake transitions and other deciding indicators to facilitate a particular section of society towards whom they have personal interests.

Considering the confusion and apprehension this could create for foreign investors, Arif Habib said that foreign investors are a very keen observer of such developments while finalizing any investment in the host country. “Before commencing foreign investment projects, government and judiciary should lay out the risks and opportunities.

The aforementioned case studies showed the government’s non-serious demeanor while formulating policies. Pakistan should learn from these examples because foreign investors usually rely on government temperament toward such international understandings,” said Mr. Habib.

“The hurdle in the privatization of Pakistan Steel Mills was the contradiction in policies which degrade the country’s image for investments”, Arif Habib said. Moreover, the political setup and their credibility is also the intervening factor in determining the development projects and foreign investments.

Read more: Is Malik Riaz organizing a NRO deal for Sharif?

The corruption factor in investment sector can entirely cast a shadow over the other positive aspects. Governments sometimes introduce fake transitions and other deciding indicators to facilitate a particular section of society towards whom they have personal interests.

“To mold a policy according to own interests, sometimes the government take the support of corruption and overemphasize it to turn around the table in a direction which can serve them well. Considering every government transition as a corrupt practice by the government, agonized the national interest because at certain points these notions are motivated by political intentions”, Arif Habib said.