New Delhi, Jan 21 (NationPress) Pakistan is struggling to draw adequate domestic and international investment due to ineffective governance, a dire law and order situation, a fragile judicial system, bureaucratic obstacles, and ongoing political instability, as highlighted in an article by the Karachi-based Business Recorder.

The article identifies the security landscape as a significant hurdle that has persisted for decades. The country holds the unfortunate title of being ranked second on the Global Terrorism Index, with violent incidents showing no signs of decline. The article questions, 'How can one expect to invest in such an environment?' Even local investors are moving their capital to safer territories. The deteriorating law and order scenario further pushes investors towards more secure options.

Many domestic investors are deterred by the fear of political victimization, compounded by a lack of judicial safeguards. Political instability proves to be a major barrier, as parties are engaged in rivalry rather than prioritizing national interests. The absence of a long-term political vision hampers the country’s progress.

In 1975, Pakistan's investment-to-GDP ratio stood at around 17 percent. Fast forward 50 years, and it has plummeted to 13.1 percent, raising serious alarms for policymakers.

In the 1990s, Pakistan was a magnet for foreign direct investment (FDI), outpacing India. For instance, in 1992, Pakistan attracted $336.5 million in FDI, compared to India’s $276.5 million. However, the scenario has drastically shifted; by 2024, Pakistan attracted a mere $2.7 billion, whereas India garnered $27.1 billion—nearly 13 times more, as noted in the article.

Citizens often endure strikes, prolonged lockdowns, and the closure of major roads, all of which adversely affect businesses. In developed democracies, there’s a consistent policy framework, irrespective of the ruling party. Regrettably, this consistency is lacking in Pakistan.

Moreover, excessive regulatory burdens and bureaucratic red tape create additional nightmares for investors. Regulations are frequently used as instruments of control rather than facilitation. The compliance process is incredibly time-consuming. For example, securing an electricity or gas connection can take months, and expedited service often requires bribery.

Opening a bank account is another daunting task, necessitating numerous documents like utility bills and proof of income. Company registration involves an even more convoluted process. Why would anyone risk their hard-earned money in such a challenging environment? Additionally, repatriating funds or profits is fraught with difficulties.

The underperforming judicial system is frequently overlooked in discussions about investment challenges. A robust judicial framework instills confidence in investors that their interests are protected. Unfortunately, Pakistan’s judicial system ranks 129 out of 142 in the World Justice Project, with no quick dispute resolution mechanisms available.

The courts are overwhelmed and inefficient, suffering from a backlog of over 2.3 million cases. Commercial disputes can drag on for years, or even decades. A simple fabricated case can delay justice for years.

Infrastructure and policy inconsistency also plague investors. Frequent power outages and exorbitant costs compel many businesses to invest in solar energy, while every year witnesses debates on taxing self-generated power.

The unpredictable policy landscape worsens the situation. Many investors dread that today’s regulations may not exist in the next budget. Such uncertainty discourages investment, the article emphasizes.