(July 15, 2020)
President Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, FPCCI’s Businessmen Panel Sr. Vice Chairman, and former provincial minister Mian Zahid Hussain on Wednesday lauded the move of the Prime Minister Imran Khan to boost the economy and create jobs through a housing package.
However, he warned that weak foreclosure laws may not permit banks to participate in it which can become a major threat to the success of the package.
Mian Zahid Hussain said that the incentives announced by the government are laudable but it should be backed by the enabling legal environment to make it a success.
Talking to the business community, the veteran business leader said the government has promised five million houses for poor and middle-class but it has not seen the light of the day while most of the moves in this direction can benefit rich but not the needy.
The former minister noted construction package has already failed to achieve cited objectives therefore the new package should be reconsidered.
He said that the economy started nose-diving two years ago, the IMF program further damaged it and coronavirus impaired it, therefore, policies should be directed towards economic revival.
The business leader noted that presently many investors are not ready to make large-scale investments while banks have always ignored the housing sector due to weak foreclosure laws.
Banks only allocate one percent of the advances to the housing sector because they don’t want to be involved in long legal procedures which prevents them from swift recovery in case of a default.
The government can lease out idle land for construction of low-cost apartments for poor and its employees with all the facilities and improve the laws to push banks to make radical changes in providing loans, he said.
Apart from the legal issues, political instability, overnight change in the policies and process of loan recovery which will span over decades may keep banks and investors away, he remarked.