top of page

SAZH-TAF Report on FDI

Trust System

< Back

The Doing Business index[1] by the World Bank ranked Pakistan as one of the lowest in the enforcement of contracts and taxation system (Ease of Doing Business Archive: Pakistan, 2022). Although Pakistan performed well in the area of company registration, no improvement was evidenced in property registration, utility connections, and the performance of regulatory authorities. Other measures such as the World Justice Project’s Rule of Law index (ranked 130 out of 139 countries) and Transparency International’s Corruption Perceptions index (ranked 140 out of 180 countries) indicate a clear lack of investor trust in Pakistan and the lack of FDI in the country can be attributed to the same.

 

Factors that have led to this lack of investor trust include, but are not limited to:

 

  • lack of faith and trust in legal system of Pakistan;

  • lack of Human Resources with certified expertise;

  • lack of communication channels between government and private organizations to enhance, facilitate and secure investment;

  • lack of continuation of policies during regime changes;

  • widespread allegations of corruption;

  • protracted litigation; weak contractual enforcement; procedural delays;

  • inadequate State support in the form of lack of facilitation for market entry;

  • lack of export processing zones;

  • lack of incentives through inconsistent, vague, and regressive policies;

  • onerous and opaque requirements for security clearance;

  • inadequate transparency and inconsistency in foreign exchange regulations including remittance caps.


[1] “The Ease of doing business index ranks countries against each other based on how the regulatory environment is conducive to business operation stronger protections of property rights.” Trading Economics, https://tradingeconomics.com/pakistan/ease-of-doing-business.

bottom of page