#1Investor perceptions in Punjab - 2016 Final presentation of survey results Dec 8th 2016 Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 1#2Snapshot of the survey Consultancy provided by: Gallup Pakistan, affiliated with Gallup International Timelines: Questionnaire dispatch started from the second week of October and data collection ended in the first week of December GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Methodology: A mix of Postal, online and referral self-administered interviews Sample size: 282 including both local (-60%) and foreign investments (~40%) 2#3Concept Note - TOR investment perception survey in Punjab Background World Bank mission is interested in obtaining an independent feedback from investors and their perception of the investment climate in the Punjab province of Pakistan, including policy constraints, government support towards investors, such as incentive programs, and future investment plans/intentions in Punjab. Proposed survey will focus on domestic and foreign investor who are already based in the key economic areas of Punjab and hence is the proposal. Survey Objectives The Government of Punjab (GoPunjab) is making substantial efforts toward improving the overall investment climate for attracting investment and stimulating business growth. In the context of these reforms. GoPunjab is keen to remove the main investment climate obstacles facing investors and increase overall investor satisfaction with Punjab as an investment destination. This includes removing investment policy obstacles, embarking on an investor promotion/aftercare program, and stimulating greater linkages and domestic value addition (DVA) with local firms, to support the retention and further growth of existing investments in the country. The survey findings will be included in a comprehensive Investment Reform Map (IRM), which will outline policy recommendations to GoPunjab specifically related to investor entry, establishment, operations, incentives, protection, retention, and linkages / DVA. Understanding the experiences of existing investors will help GoPunjab, PBIT and provincial level partners in their efforts at improving policies directed toward investor and the investment climate, including investment promotion and aftercare efforts; these improvements should also encourage potential new investors to consider Punjab in their investment location decisions. Who are we Interviewing The survey envisions to interview a select number of Key Stakeholders falling into : Foreign Investors having Investment in Punjab Local Investors having Investment in Punjab GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 3#4Presentation flow This presentation would start with recommendations by consultant followed by thematic analysis and recommendations of stakeholder feedback and survey results. GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Consultant Recommendations Stakeholder Feedback Survey Results#5Consultant recommendations Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 5#6Consultant recommendations Motivations for investing in Punjab GoPunjab should focus on promoting important factors such as local infrastructure, political and economic stability in the province to relevant investor groups. This should be done via trade shows, investor delegation meeting etc. Another important source of information seems to the 'word of mouth' so current investor perception and aftercare is crucial to attract more investment GALLUP PAKISTAN Affiliated with Galup International Pakistan's Foremost Social Research Lab Entry (obstacles and processes) Procedures related to starting a business should be simplified and clarity of guidelines should be improved (and be easily available) for potential investors. Finance and revenue departments of the province should be made more proactive and better communication should be established between the federal ministries and local departments to ensure smooth entry journey Linkages/DVA Since an overwhelming majority of the firms want to purchase good locally, the GoPunjab and its IPAs should help facilitate this with better information on potential linkages (an MIS system for the same would be useful) as well as policy on improvement of standard of goods / services and possible tax rebates on exploiting these linkages Protection and confidence GoPunjab should take measures on reducing corruption as well as the communicating on the perception of 'reduction in corruption' to increase investor confidence in business operations Incentives, grievances It is crucial that incentives should be communicated to the potential existing investors and the process of availing these incentives be made simple and easy. One-stop windows may help with such aftercare activities. Transparency in processes and internet based procedural mechanisms may help curtail any grievances especially related to bribery etc. 6#7Stakeholder feedback and recommendations Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 7#8Stakeholder feedback and recommendations Motivation 1.1 Stability: Government, political and economic stability are the main factors that may have a positive impact on the investors in terms of encouraging them. 1.2 Skilled Labor: Technical labor can be promoted through Training workshops, Proper National education policy and vocational training institutes. 1.3 Infrastructure and advance technology: Infrastructure may be improved and technology should be inexpensive. Latest machineries, E- Payment system and Electronic track record should also be promoted. 1.4 Transparency: Transparency in all laws particularly in the land records should be encouraged. 1.5 Good governance: Governance should be improved. E-Governance system should be incorporated for the maintenance of law and order. 1.6 Misc. motivational factors: One window solution, Industries coordination and better Transportation facility can also build the trust of the investors. Pakistani visa should easily be available on lower rates. Policies 2.1 Export policy: Policy may be made that results in maximizing the exports and for this export industries should be promoted. 2.2 Affordable loan policy: Loans / funs may be easily available. Loan facility / affordable loan/ free interest loan should be given and for this Loan policy may smooth the process in this regard. 2.4 Tax reform: Tax reform can be done by creating easy Tax policy which focuses on the proper electronic tax collection. Also, software can also be created so that taxes should be entered easily. 2.5 Labor laws: Labor laws should be revised and skillful labor should be promoted. GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 80#9Stakeholder feedback and recommendations Issues 3.1 Energy crises: This may need to be resolved on an immediate basis and is a point of concern for a lot of the companies 3.2 Corruption: Corruption should be eradicated from the government institutions like PFA and PRA. System regarding proper check and balance should be created. 3.3 Security condition: Security measures should be taken particularly in the educational institutes and restaurants. Other than that, CPEC and expatriate security should also be ensured to attract more investors. 3.4 Tax burden: Tax burden is the major issue mentioned by majority of the investors. New property tax should be revised. Custom duties should also be reduced. 3.5 Stable market/ stable prices: Market, value of money, foreign currency exchange and prices should be stable. International prices of raw materials should be followed. Also, Industrial areas should be available for investment in economical prices. 3.7 Redtapism/ bureaucratic structure: Red tapism, long procedures to follow, over regulations and documentation process on imported good results in increasing the overall operational costs. 3.8 Other misc. Issues: Other Issues cited by the investors include the terrorism, discrimination, geopolitical condition, Lack of uncertainty and man power. Protection of local market is also the major concern of the local investors. GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 4. Incentives 4.1 Tax incentives/ subsidy: Tax incentives and Subsidy on utilities should also be given particularly to Industrial and education sector. 5. Grievances 5.1 Nature of grievances and its resolution: Bribery, weak contract enforcement / contact violations and tax related grievance are the common grievances faced by the investors. To resolve the grievance, speedy justice system, proper panel court system and Timely law enforcement would be needed. 6#10How to maintain or increase investments in Punjab 12 key points to drive policy GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab I. resolve taxes issues/tax structure should be revised/facilitation for tax paying investors II. Correction and improvement in govt policy and procedures III. Ensure uninterrupted supply of Utilities IV. improve security issues V. Increase political stability VI. Improve Economic stability VII.Better law enforcement VIII.Free interest/loan facilities IX. Provide funds/investment/money X. Skilled profession/man power XI. Decrease Import duties. XII. Control corruption XIII.Improve infrastructure 10#11Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP Motivations of Investing in Entry (obstacles and processes) Feedback on Linkages/DVA Punjab Survey results Protection and Incentives, Sample Profile confidence Grievances 11#12Motivations for investing in Punjab Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 12#13Motivations for investing In Punjab Important Factors why the investor choose to invest in Punjab: Quality of local Infrastructure in PUNJAB, Ease of obtaining licenses and permits, Economic stability, Access to land, Physical security, Ease of Establishing Business in PUNJAB, Political stability in PUNJAB, Availability of skilled labour as compared to other provinces, Registration of business in the country, Availability of local suppliers as compared to other provinces, Existing local investor's experiences Improving Factors: Quality of local infrastructure, economic stability, political stability. Others Provinces considered: Sindh and KPK seem to the other most considered provinces. Sindh; because it has a seaport, largest city in Pakistan (hence bigger local market), KPKI; because of growing economy, more investor friendly policies and taxation. Reasons for considering Punjab was availability of better business opportunities, better security, comparatively better political, economic and law and order situation as well as better infrastructure Investors learned about investment opportunities in punjab from existing customers, word of mouth, suppliers in Punjab, existing investors and internet sources amongst others. 36% of the companies contacted ministry of finance when setting up their business, Foreign investments also contacted BOI, local development agency, Chief ministers office as well. GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 13#14Motivation for investing in Punjab Top factors for motivation for investment include Are these Factors Improving over the past 3 years? Quality of local Infrastructure in PUNJAB 36% 41% 11% 55% Ease of obtaining licences and permits 41% 33% 12% 34% Economic stability 24% 41% 21% Access to land 37% 36% 12% Physical security 29% 36% 20% Ease of Establishing Business in PUNJAB 37% 36% 12% Political stability in PUNJAB 24% 46% 15% Availability of skilled labour as compared to other provinces 27% 43% 14% Registration of business in the country 36% 37% 9% Availability of local suppliers as compared to other provinces Existing local investor's experiences 32% 37% 12% 36% 34% 11% 51% 41% 46% 41% 51% 43% 38% 43% 42% T 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Important Very important Crucial Respondents who answered not important/ not important at all are not shown GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Threshold for top factors cumulative percentage for important, very important and crucial is >= 80% Respondents who answered 'factors' are the same / getting worse are not shown 14#15Other provinces considered for investment GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 60% 50% 40% 30% 20% 10% 0% Federal KPK Sindh Balochistan Growing Gilgat Baltistan economy, friendly policies in law and taxation Has major city in Pakistan, seaport Total ■Foreign Domestic A few of the companies are already operating in other provinces of Pakistan 15#16Reason for selecting Punjab GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Belong to / have contacts in Punjab better Business opportunity in punjab target market accessiblity 9% better security in punjab 7% Political/Economical stabiltiy 7% better law and order situation 5% better infrastructure 4% 19% 58% 0% 10% 20% 30% 40% 50% 60% 70% 16#17How did you learn about investment opportunities in Punjab 60% 50% 40% 30% 20% 55% 53% 51% 55% 52% 50% 50% 45% 43% 38% 38% 37% 35% 33% 34% 30% 30% 26% 26% 23% 16% 13% 13% 11% 9% 9% 2% 10% 0% Customer in PUNJAB Word of mouth (personal connections) Supplier in PUNJAB Existing Investor Other Internet Sources Newspaper/ Investment Board of Business Journal Seminar in Home Country Investment Local Development Agency GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Multiple responses possible Total Foreign Domestic 17#18Who did you contact when setting up business GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 60% 53% 50% 40% 36% 30% 26% 23% 24% 21% 19% 20% 10% 15% 15% 11% 11% 11% 9% 12% 9% 7% 6% 5% 5% 4% 2% 3% 3% 2% 0% Ministry of Finance Local Development Agency Board of Investment (National) Multiple responses possible Board of Investment (Provincial) PUNJAB Board Chief Minister's of Investment & chamber of FBR Office commerance Trade (PBIT) Total Foreign Domestic 18#19Entry Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 19#20Entry Top2 Obstacles: The top 2 major entry obstacles are perceived to be weak regulatory implementation (59%) as well as procedures related to starting a business. (59%) Majority of the companies (82%) got the company registered in upto 90 days and 87% of the companies had to deal with upto 3 department / ministries. 53% of the companies took upto 90 days to establish a business. Again 87% of the companies had to deal with upto 3 departments / ministries The clarity of guidelines for registering and establishing are considered to be moderately / very bad by 15% of the companies GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 20 20#21Entry obstacles Weak Regulatory Implementation 12% 21% 34% 19% 6% 59% Land ownership restrictions 22% 24% 28% 19% 2% 49% Operational requirements (local employment, export 15% 27% 26% 21% 4% 51% requirements etc.) Procedures related to starting a business 16% 21% 27% 27% 5% 59% (registration/licencing/permits/certificates) Foreign ownership limitations 16% 13% 20% 19% 5% 44% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Major Obstacle Very Severe Obstacle No Obstacle Minor Obstacle Moderate Obstacle Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 21#22Clarity of guidelines Domestic 20% 21% 44% 11% 5% Foreign 12% 25% 49% 9% 5% Total 17% 22% 46% 10% 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ■Very good Moderately good Normal ■Moderately bad ■Very bad Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 22#23Time taken to register business Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Domestic 47% 30% 22% Foreign 50% 40% 10% Total 47% 35% 18% 0% 20% 40% 60% 80% 100% Upto 30 Days ■31 -90 days More than 90 Days 23#24How many departments did you have to deal with while registering business Domestic 61% 24% 10% 5% Foreign 40% 33% 21% 6% Slowest departments / ministries included PRA, FBR, SECP etc Total 47% 26% 14% 13% 0% 20% 40% 60% 80% 100% 1 Department 2 Department 3 Departments ■More than 3 Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Most Difficult: FBR, PRA, development authority etc Reasons: non-Cooperative Behavior, slow work, lack of accountability etc 24 24#25Time taken to establish business Domestic 20% 27% 53% Foreign 31% 33% 36% Total 24% 29% 47% 0% 20% 40% 60% 80% 100% ■Upto 30 Days ■31 -90 days More than 90 Days Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 25#26How many departments did you have to deal with while establishing business Domestic 53% 26% 11% 11% Foreign 36% 28% 19% 17% Total 45% 27% 15% 14% 0% 20% 40% 60% 80% 100% ■1 Department 2 Department 3 Departments More than 3 Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Slowest departments / ministries included PRA, FBR, SECP etc Most Difficult: FBR, PRA, development authority etc Reasons: non-Cooperative Behavior, slow work, lack of accountability etc 26#27Linkages Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 27#28Linkages 63% the firms seem to be importing more than 50 percent material goods while ~47% of the firms seem to be importing more than 50% non-material inputs. A couple of major reasons for importing material / non - material inputs seems to be the standards of local goods / services (79%, 75%) as well as the availability of goods / services required for day to day operations. (81%, 74%) 90% of companies perceivably want to purchase more goods locally and 93% want the government to stimulate local suppliers to meet international standards 25% disagree that the 'government is working on measures that would allow them to buy more goods and services locally'. Such measures may include tax rebates on locally produced goods, standards on goods, training of manpower as well as a better justice system to protect against violations GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 28#29Sourcing of material and non- material inputs from Punjab 100% 100% 13% 13% 14% 12% 90% 90% 19% 22% 80% 80% 22% 28% 16% 70% 37% 100% 70% 13% 100% 42% 60% 75-99% 60% 12% 9% 75-99% 17% 11% 50% 50-75% 50% 10% ■50-75% 11% 12% 25-50% 40% 20% 12% 40% 15% 25-50% 10-25% 24% 10-25% 30% 14% 19% 30% 11% 10% 0-10% 11% 0-10% 20% 7% 5% 20% 10% 16% 17% 16% 10% 23% 24% 22% 0% 0% Total Foreign Domestic Total Foreign Domestic Material Inputs GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Based on percentage respondents Non- material Inputs 29#30Important reasons for importing material goods GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Local goods do not comply with required standards 38% 26% 15% Tax/Customs incentives are offered on imported goods 36% 30% 4% The parent company is insisting on imported goods 33% 33% 6% Local goods are more expensive than imported ones (even before taxation) 31% 37% 7% Goods needed for our day to day operation are not available locally 33% 35% 13% Locally produced goods are not of sufficient quality 35% 30% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Important ■Very important Respondents who answered not important/ not important at all are not shown ■Crucial 30 30#31Important reasons for importing non-material inputs GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Locally provided services do not comply with required standards (and 43% 27% 5% certificates) Tax/Customs incentives are offered on imported services 39% 27% 4% Parent company is insisting on imported services 41% Local services are more expensive than imported ones 38% Services are not available on local market 30% Locally provided services are not of sufficient quality 44% 38% 30% 5% 33% 3% 6% 26% 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Important ■Very important Crucial Respondents who answered not important/ not important at all are not shown 31#32Government performance on developing linkages 60% of the companies disagree / are neutral that the government is working on measures that allow to buy more goods and services locally Government should stimulate local suppliers to meet international 195% 32% 25% 36% standards Government should be better at providing information about local 1% 9% 31% 37% 21% suppliers Government should allow more foreign suppliers to open local 4% 7% 32% 35% 23% offices Our business would like to buy more goods and services locally 3% 7% 28% Government is actively working on measures that would allow us to buy more goods and services locally 10% 15% 0% 10% 20% ■Completely Disagree Somewhat Disagree Neutral Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 35% 41% 21% 29% 10% 30% 40% 50% 60% 70% 80% 90% 100% Somewhat agree ■Completely agree 32#33Government policy that could stimulate purchase of local goods GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 80% 70% 60% 50% 40% 30% 20% 10% 0% Figures may not sum to 100%, because of rounding No Yes 33#34Government policy that could stimulate purchase of local goods GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Policy Parameters Taxation Tax rebates on local produced good, Training of labor Quality of Goods Misc Sales tax reduction, Tax compliance by suppliers Training of labor, improve technical manpower Price and quality control, access to goods in local market, minimum standards of goods, Better justice system to protect against violations, register and certify local vendors 34#35Protection and confidence Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 35#36Protection and confidence Corruption (62%) seems to be the highest rated obstacles (major, very severe obstacle) effecting business operations GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 36#37Obstacles in business operations Unpredictable, low transparency, arbitrary and inconsistent provincial government actions (e.g. inconsistent application of a law by different parts of the provincial Government) Frequent changes in provincial laws and regulations without due process (PPD, consultation, publications of changes etc.) Breach of contracts with the provincial government (e.g. non-honoring of an Investor-State power purchase contract) Lack of enforcement of laws and regulations 35% 11% 33% 11% Corruption 29% Risks related to expropriation or confiscation, or other acts impacting the total value of investment like revocation of licensing 41% 5% 40% 11% 35% 3% 33% 0% 10% 20% 30% 40% 50% 60% 70% Major obstacle Very severe obstacle GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Respondents who answered no obstacle, minor obstacle, moderate obstacle are are not shown 37#38Incentives Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 38#39Incentives Only 15% of the companies availed any incentives (these largely included fiscal incentives such as tax rebates / custom incentives, export rebates and were received from FBR, custom, IT ministry etc. Top reasons for not availing incentives were lack of information, and lack of confidence over the government For those who availed incentives it had an impact on the 'extent of investment in research development and innovation, level of production as well as size of investment. Incentives were generally received within one year. 65% of the companies found it difficult to find information on incentives GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 39#40Did the company receive any incentives 100% 88% 90% 85% 80% 80% 70% 60% 50% 40% 30% 20% 20% 15% 12% 10% 0% Total Foreign Domestic Yes No GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Top reasons for not receiving incentives included no information on incentives, difficult procedures, no fruitful outcome/s, lack of confidence on the government to deliver. 40#41What incentives were received Types of Incentives Tax related Custom Duty Cost Incentive Energy Related Export Rebates GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Incentive By FBR Customs IT ministry Most of the incentives received were upto $100k; Majority of the companies said that they would have invested even without the incentive In year 2011, 2015, 2016 41#42How did the incentives affect investment GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 5% 21% The extent to which you invested in green technologies (i.e. energy efficiency) The extent to which you invested in Research, Development and Innovation The extent to which you hired workers The extent to which your procured from local sources 7% The level of production Type of machinery or the degree of capital intensity of your operations The size of your investment Location of your operations 10% 12% 12% 16% 17% 0% 5% 10% 15% 20% 25% 42#43How many agencies you had to deal with and how much time did it take to receive incentive 1 2 3 st 4 5 or more None GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 70% 60% 50% 42% 40% 30% 20% 10% 58% 0% upto 6 months 0% 10% 20% 30% 40% 50% 60% 6 months to 1 year 43#44Information on incentives Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Very difficult 14% Difficult Normal Easy 17% 28% 34% Very Easy 7% 0% 5% 10% 15% 20% 25% 30% 35% 40% ■Very Easy Easy Normal Difficult Very difficult 44#45Grievances Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 45#46Grievances 21% of the companies had experienced any grievance. These grievances included. bribery, politically motivated price controls, weak contract enforcements etc. Top approaches to resolve the grievances included 'formal written grievance to the government' and 'case in domestic court' 46#47Did the company experience any grievances Chart Title 100.00% 90.00% 79.31% 80.00% 87.64% 74.29% 70.00% 60.00% 50.00% 40.00% 25.71% 30.00% 20.69% 20.00% 12.36% 10.00% 0.00% Total Foreign Domestic Yes No Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 47#48Nature of grievance GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Grievances included bribery, politically motivated price controls, weak contract enforcement, taxation as well as approval issues Against Departments such as FBR, Wapda, LDA, Excise 48#49Approach to resolve grievance GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Informal consultation with the Government Formal written grievance to the Government Formal consultation with Case in domestic court International Did not try to arbitration (invester-state) resolve the grievance the Government ■Total ■Foreign Domestic 49#50Economic impact of grievance Economic impact for most of the companies who faced any grievance was up to $100k GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 45% 40% 35% 30% 25% 20% 33% 35% 15% 30% 40% 30% 25% 25% 23% 10% 20% 5% 13% 15% 10% 0% Loss of jobs Loss of property (e.g. land, vehicle, a licence...) Additional costs related to core business (had to continue paying contractors after a licence was illegally revoked) Loss of revenue. Total Foreign Domestic Multiple responses possible 50 50#51Special economic zones, industrial zones, and one- stop window Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 51#52Special economic zones, industrial zones, and one-stop window 21% of the companies are operating in SEZS/ IZS in Punjab. Some of the suggested improvements in SEZs/ Izs included SEZ support services, tax reduction and rebates, uninterrupted utilities, no corruption and low cost of infrastructure. 95% of all investors considered a one-stop- window to be useful (somewhat or very) facility. 52#53Operating in SEZ / IZ Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 90% 79% 80% 70% 60% 50% 40% 30% 21% 20% 15% 10% 0% Total 85% Foreign Yes No 26% 74% Domestic 53#54Ease of obtaining information on SEZS /IZS Domestic Foreign Total 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Very easy Moderately easy Normal Moderately difficult Very Difficult 54 54#55How to improve SEZs / IZS Uninterrupted Utilities Tax Reduction / rebates Free/Subsidized Utilities Easy process of Registration in IZS Export Rebates Support Services No corruption or Favoritism GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 55#56Usefulness of one-stop window Domestic 5% 38% 58% Foreign 7% 33% 61% Total 5% 36% 59% 0% 20% 40% 60% 80% 100% ■Not useful Somewhat useful Very useful Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Based on perceived usefulness of on-window-shop 56#57Profile of business and its investment Consultancy Provided by: GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 57#58Total employees Total 51 and above 16-50 14% 6-15 16% 1-5 10% Figures may not sum to 100%, because of rounding GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 60% 51 and above Foreign 16-50 11% 6-15 13% 1-5 4% 51 and above Domestic 16-50 16% 6-15 17% 1-5 15% 53% 58 73%#59Year of establishment GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 40% 35% 30% 25% 20% 15% 10% 5% 0% 2013 onwards 2008 2013 2000-2008 1990-2000 Before 1990 Total Foreign Domestic Most of the companies were established 2000 onwards 59#60Business activity of the company Manufacturing Facility Sales Office Head quarters Distribution Centre GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Regional Office R&D facility 0% 10% 20% 30% 40% 50% 60% Multiple responses possible Total Other business activities included technical center, consultancy, call center, waste management service Foreign etc Domestic 60 60#61Sector of the company Manufacturing Information and communication Education Wholesale and retail trade; repair of motor vehicles and motorcycles Professional, scientific and technical activities Construction Other service activities Accommodation and food service activities Agriculture, forestry and fishing Financial and insurance activities Real estate activities Human health and social work activities Electricity, gas, steam and air conditioning supply Transportation and storage Water supply; sewerage, waste management and remediation... GALLUP PAKISTAN Affiliated with Gallup International Multiple responses possible Pakistan's Foremost Social Research Lab Total Foreign Domestic 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 61#62Sector of the company - subsector manufacturing Manufacture of textiles GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Manufacture of food products Manufacture of chemicals and chemical products Manufacture of leather and related products Manufacture of furniture ■Total ■Foreign Domestic Manufacture of wearing apparel Manufacture of tobacco products Manufacture of rubber and plastics products 0 5 10 15 20 25 25 30 35 Figures may not sum to 100%, because low percent sectors are not included in Percentage of Manufacturing sector the graph 62 62#63Current investment in Punjab GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 47% Only 13% of the companies had plans for new / more investment while 87% were still undecided/ had no plans / didn't know if they wanted to invest. 50% 45% 45% 42% 40% 40% 34% 35% 33% 33% 30% 25% 18% 20% 15% 10% 8% 5% 0% Upto $500k $500k - $20m $20m and more ■Total ■Foreign Domestic 63#64Annual sales revenue 100% 100% 80% 53% 65% 74% 60% 90% More than 50 percent 20% to 50 percent 80% 50% 48% 40% 55% 70% 29% 60% 21% Upto 20% 20% 15% 50% 14% 17% 11% 40% 0% 30% 50% 52% 45% 20% 10% 0% Total Foreign Domestic Total Foreign Domestic Percentage of annual revenue from Punjab ■Medium/Large Companies (more than $1 million annual revenue) ■Small Companies (upto $1 million dollar annual revenue) GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab 64#65Location of company within Punjab Foreign companies / investors were based out of the US, China, Turkey, UAE, Canada, Malaysia, UK, Saudi Arabia, and others 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Lahore RWP/ISB Faisalabad Multan Gujranwala Sialkot Gujrat Bahawalpur Rahim yar DG Khan Muzaffargarh khan ■Total ■Foreign Domestic GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab Multiple responses possible Other cities include Kasur, Sheikhupura, Sargodha, Sahiwal and Chakwal 65#66Company ownership GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab ■Total ■Foreign Domestic 5.63% 94.38% 35.58% 15.38% 49.04% 13.81% 5.97% 3.36% 56.34% 19.03% Majority Foreign Owned (more than 50% foreign ownership) 50% foreign ownership and 50% domestic ownership Some foreign ownership(less than 50% but above 10% foreign o Majority domestic ownership (less than 10 percent foreign ow 100% domestic ownership 66#67For more information / queries, please contact Bilal Ijaz Gilani Executive Director, Gallup Pakistan [email protected] Consultancy Provided by : GALLUP PAKISTAN Affiliated with Gallup International Pakistan's Foremost Social Research Lab WORLD BANK GROUP 67