The latest Business Confidence Index (BCI) sponsored by Overseas Investors Chamber of Commerce and Industry (OICCI) is quite encouraging and indicates very clearly that confidence in Pakistan's economy has improved considerably over the last six months ending October, 2017. According to the BCI's survey - the Wave 15, overall business confidence in Pakistan now stands at a positive 21 percent, up eight percentage points from 13 percent in the Wave 14. Major contribution was made by the retail and wholesale sector, which led the upswing with a 40 percent positive sentiment, a 27 percent improvement compared with the last survey. The manufacturing sector saw a confidence level of a positive 16 percent, showing a significant increase of 7 percent while the services sector's sentiment declined by 3 percent to 15 percent. The sentiment of leading foreign investors also improved and touched 42 percent, up 5 percent from 37 percent recorded in the Wave 14. OICCI President Khalid Mansoor congratulated the government and the business community for keeping faith in the economy despite serious distractions and unfavourable media hype during the past six months. He also said that "there is an urgent need to focus on addressing the country's poor rating of 147 out of 190 countries in the recently issued World Bank's 2018 Ease of Doing Business Report."

A substantial improvement in the BCI over the last six months is of course a welcome development for the country. It may be noted that BCI is a biannual assessment undertaken by the OICCI - an association of over 195 multinationals operating in Pakistan and its results are based on responses from common companies as well as OICCI members. Although nothing could be said with certainty, yet the view of the respondents this time seems to have been driven mainly by improvement in security, better law and order situation, increased consumer demand, easing of energy crisis, stability in fuel prices, lower inflationary pressures and higher GDP growth rates. Political instability, upcoming elections, recent dismissal of a prime minister on corruption charges, court cases against his family and the finance minister have not influenced the OICCI members in a negative way who feel encouraged by growing consumer demand and economic opportunities in the country. It is obvious that the positive sentiment of the existing OICCI members is bound to have a favourable impact on the business climate, encourage other foreign investors to invest in Pakistan, thus paving the way for a higher growth trajectory. However, while welcoming the development, it should not be forgotten that the current score of 21 percent is still much lower than the highest BCI score of 36 percent recorded in the survey results issued in April 2016. Also, the government must not become complacent in view of the fact that the present improvement in the BCI as it is correlated with good governance, which is still needed to be supported by a sound, consistent and predictable policy framework. In this connection, both the federal and provincial authorities are required to make more proactive interventions at the right time to ensure all small and big impediments towards investment facilitation and economic activities in the country. It also needs to be remembered that foreign investors have the option to invest almost anywhere in the world and they would be attracted to Pakistan only if the safety of their capital is guaranteed, the environment for their investment is conducive and returns on their investment are reasonably high.

Copyright Business Recorder, 2017