Government’s policies repelling investment;
Massive private capital leaving country, Negative return on deposits a reason behind capital flight: PEW
The Pakistan Economy Watch (PEW) on Sunday has said the policies of the government are repelling the investment and indirectly supporting flight of capital at a time when it is badly needed at home.
Capital flight proves that some investors are not only disturbed but have lost faith in the economic policies of the government, it said. “The disappearance of wealth can result in sharp drop in the exchange rate leaving authorities with no option but to choke productive sector to keep it reserves intact,” Dr. Murtaza Mughal, President PEW has warned.
He further said that revelation of Malaysian Counsel General that Pakistanis have transferred 2.1 billion dollars to Kuala Lumpur is shocking. Dr. Murtaza Mughal said that majority of those who have shifted money belongs to Karachi which speak volumes about the feeling of people living in the commercial and industrial hub of Pakistan.
“Flight of 2.1 billion dollars is tip of the iceberg as 99 per cent of such transactions are not recorded on the books,” he said
“Another reason behind capital flight is the negative return depositors get from banking companies since decades,” he said adding that money is channeling to countries offering higher interest rates.”
Dr. Murtaza Mughal said that some controversial taxes help governments earn some additional funds but it cost country a lot in shape of billions flowing outward.
“Government should revisit policies otherwise sustained flight of capital will bring economy to knees,” he warned.
He said that there is an urgent need that economic managers prove their vision otherwise investors will continue to shy away keeping Pakistan dependent on loans and donations.