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Dying Hopes of Domestic Investors

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Khurram Sajjad|

How wonder it is when the domestic manufacturers are growingly facing a narrow space for infrastructure development in Pakistan, particularly after the promulgation of CPEC whereupon massive foreign investors have turned to Pakistan which has posed a drastic threat to the domestic manufacturer confronting the challenges of imported finished manufactured product at a relatively cheaper price to the domestic manufacturing.

The great imbalance between exports and imports of Pakistan with China has already witnessed the clamour emanated from the quarter of Pakistani investors following the CPEC project surfaced in the preceding years. However, what is undoubtedly misfortune is that facilitation of the governmental policies to the domestic industrialists is like groping in the dark, given the unsung foreign threatening factor to the domestic manufacturing industries, increasing the suffering of the national investors.

The real economic development can be achieved when a state nurtures its domestic manufacturers that helps build not only infrastructure development.

Although, customs duty is imperative to nurture domestic industries in a state, fostering foreign manufactured goods on the cost of already existence of the domestic manufacturing industry discourages domestic capability of production. Likewise, the government seems to have not yet devised a plan to put a lid on the foreign finished products to protect the domestic industry which is already at its growing pace. This is crumbling the confidence of domestic investors who have been going through every thick and thin to better tomorrow of the country.

Fortunately, the CPEC initiative came at a time when Pakistan`s economy was under severe stress and its relations with the US went at its lowest ebb. In fact, the divergent motives of CPEC were not properly processed sagaciously for its protection. Nor had the two sides realized to foresee the future complications to Pakistan’s economy. Therefore, in order to fill the vacuum of the regional and strategic partner, specifically after the meltdown of USA and Pakistan’s cohabitation, Pakistan assumed China to be as an alternative strategic partner.

Read more: Pakistan will attract US investments: Ambassador Jehangir Siddiqui

The abortive idea of another budding East India Company in the shape of CPEC is another question mark which is believed to restore the gestation of foreign intervention into the incipient domestic industries can also not be ruled out in Pakistan. Nevertheless, expectations on both sides takes to surge unabatedly. Sadly, Pakistan perceived the CPEC as a panacea to all ills ranging from economic to geopolitical privilege.

In this process, Pakistan opened its economic corridor for Chinese companies by paying no heed to foresee the sharp edges of Chinese knife could be detrimental to the domestic produce, nor did the clauses under this agreement were revealed to the public to ensure transparency. Thus, a palpable sense of melancholy pervades domestic investors. Globally, discourse has been developed against China in the wake of Chinese regional policies of infrastructure developments in under-developing states, under the garb of the opaque debt trap.

The government seems to have not yet devised a plan to put a lid on the foreign finished products to protect the domestic industry which is already at its growing pace.

Likewise, the United States recently realized the threat of China to its own domestic produces which forced it to pursue the isolationist and frosty policy in the bilateral trade relationship. The global debate, on the other hand, also began to break the silence on economic warfare as well as China’s economic intervention by its overwhelming exports into the imports of under-developing countries. In order to avoid it the USA blocked Chinese exported product that was a threat to its domestic industrial produce.

This has resulted in the narrowdown of bilateral trade statistics became a cause of the failure of the Asia-Pacific summit recently held at Port Moresby, Papua New Guinea. It is also seen that the trade spat between China and the United States, the world’s two economic giants, has dragged down financial markets, with world stocks falling due to the persistent tension. “The downward spiral that we have previously warned about now seems certain to materialize,” said William Zarit, the chamber’s chairman.

Read more: “China will never leave Pakistan alone”: Envoy promises investment

Furthermore, Pakistan has fortunately witnessed smooth political transition second time, but what seems to be unfortunate is the change of governmental policies from time to time. Nearly after every incoming government resets the agenda of previous outgoing government which sets a setback in the way of not only foreign but also domestic investors.

However, it was hoped that the Tehreek-e-Insaaf would bring about a revolutionary change by facilitating domestic industries through policies of lowering excise taxation to maximize domestic produce better for socio-economic amelioration. Restoration of peace in the country does also augur well for the progress of Pakistan, but lukewarm attitude of the technocrats in balancing foreign and domestic trade policies facilitates imports on the cost of the domestic manufacturing multiple units.

Globally, discourse has been developed against China in the wake of Chinese regional policies of infrastructure developments in under-developing states.

Regrettably, the incumbent government sadly seems to be less amenable to the clamour of domestic manufacturers. This leaves an impression that Pakistan’s romance with China, Saudi Arabia facilitates unprecedented dejection to the real contributors to economy that may inevitably shake the confidence of national investors. That is why Pakistan has been a victim to the capital flight for long.

Read more: An interesting plan to ‘sell Pakistan to the world’ – Chairman…

Keeping in view that foreign investment may be helpful in boosting economy but that remains to be transitory. The real economic development can be achieved when a state nurtures its domestic manufacturers that helps build not only infrastructure development but also consumes the skilled labor better for a country. But regrettably, the Pakistani investors are facing an acute threat of the foreign penetration — depriving skilled labor of employment avenues, staring in the face.

Likewise, the challenge is how to balance the relationship with the ambitious stake-holder states by limiting their unbounded scope without compromising its strategic objectives. Moreover, the government is urged to devise a strategy to nurture its domestic manufacturers by imposing tariffs on the finished imported products. Let us not forget the industrial vociferous concerns of the federalist about protection of domestic industries during the developing US back in the 19thcentury the time Pakistan is presently passing through now.

Khurram Sajjad is a freelance writer based in Lahore. The views expressed in this article are author’s own and do not necessarily reflect the editorial policy of Global Village Space.