Lack of infrastructure impeding growth
The true potential of the economy is not being realised because the infrastructure of the country remains inadequate in terms of skilled manpower, investment-friendly climate, lack of energy and power and issues related to making available more industrial land. Although relative political stability has been achieved, the lack of political harmony amongst the major political parties continues to cast a shadow over attracting requisite foreign direct investment (FDI) to the country. These and other matters came to light in the quarterly economic review carried out by the Metropolitan Chamber of Commerce and Industry (MCCI).
The economy is being touted to grow at more than 7.0 percent, for which the investment-GDP ratio has to reach 30 percent; though FDI crossed US$1.4 billion in the first eight months of the current fiscal year, we find that foreign investors are hesitant to commit more resources due to many bottlenecks in the country's infrastructure.
Lack of coordination of different government bodies and the Board of Investment creates more administrative hurdles for foreign investors. Without policy measures to simplify procedures to acquire land for industrial use and access other amenities such as reliable power, greater investments, whether foreign or domestic, will continue to stutter. The greatest concern remains with the sustainable and progressive development of the energy sector. Although power generation has increased, so has the demand for power and the demand supply mismatch has not truly been addressed. Prudent measures are required to address these problems in the near and midterm for the economy to achieve full potential.