Lahore tragedy to impact foreign investment

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While condemning the killing of over 70 people in Friday’s terrorist attacks in Lahore, the trade and industry people said the heinous act would further damage the already shattered image of the country internationally and turn foreign investors and trade partners reluctant to visit Pakistan.

Pakistan Hotels Association (PHA) Chairman Mustansar Zakir said he had been checking the foreigners’ room occupancy in the leading small to big hotels across the country after the incident and a clear picture would emerge on Saturday. He said that foreigners’ arrival had improved in the last three months but the Friday incident would shake their confidence and may result in cancellation of their planned visits for various functions and other events.

Travel Agents Association of Pakistan (TAAP) Vice Chairman Yahya Polani said that there was some improvement in arrival of foreigners from January 2010 onwards despite repeated negative travel advisory issued by the some countries. “The May 28 tragedy would result in massive suspension of trips to Pakistan by foreigners,” he feared.

He said that these countries would issue more strict travel advisories for their citizens. He added that the inter-provincial movement among the local travellers would also be hit.

Site Association of Industry Chairman Salim Parekh said two Canadian garment buyers who were due to arrive in Karachi on Saturday had cancelled their visit. He said many exporters must have received such immediate cancellation of foreign buyers’ visit.

“The Lahore tragedy will have adverse impact on the country’s image,” he said and added that hardly any businessmen in Site area had expanded his business in the last few years and many industrialists had either sold their units or rented them out.

Despite the poor law and order and uncertain business conditions as claimed by businessmen and industrialists, the large scale manufacturing (LSM) grew by 4.4 per cent during July-March 2009-10 as against negative growth in the same period last fiscal year.

The country’s exports rose by eight per cent to $15.88 billion in July-April 2009-2010 from $14.7 billion in the corresponding period last year.

Chairman Korangi Association of Trade and Industry (KATI) Razzak Hashim Paracha said that there may not be any big negative short-term impact on exports as foreign buyers who already placed their orders would not cancel them.

But the harmful impact of this incident on the export trade would be visible in the coming months if foreigners divert their orders to other countries, he observed.

The security situation has further deteriorated this year, but the economic managers of the country are not taking business community onboard for finalising budgetary measures for next fiscal year, he deplored.

Hashim said except likely imposition of Value Added Tax (VAT), the businessmen did not know about the government’s policy direction for key sectors of the economy in next fiscal year.

He said the local industrialists had not made any vertical and horizontal business expansion in the Korangi industrial area in the last few years in view of uncertain law and order situation. Coordinator Value Added Textile Forum M. Jawed Bilwani said the Lahore incident would definitely have a negative impact on the arrival of foreign buyers.

He was of the view that the arrivals of foreign buyers in Karachi had already dwindled as they preferred visiting upcountry. Now after this gory incident, they would become highly cautious to visit Lahore and other Punjab cities.

KCCI President Abdul Majid Haji Mohammad said that the industries were already surviving under energy crisis and this incident would further jeopardise business sentiments of both local and foreign investors.