Set the money free

Suppose, for a minute, that you are perusing the internet, looking to buy a property, and you find a listing online for a very large plot, in an excellent location, for a price that makes you disbelieve your eyes: it is exactly what you can afford, and it is in a location beyond your dreams. You know you can build a great house there and probably make a massive fortune for yourself.

You call the real estate agent listed on the website, fully expecting to be told that it is not real, but then have them try to sell you another property. But the real estate agent says the location is real, the price is real, and the property is yours for the taking if you can make the payment. You go, verify it for yourself, and just to be sure, you hire a lawyer who confirms there are no legal disputes

You are extremely ecstatic, and about to sign the papers when the real estate agent tells you the catch: you can buy the property for this price, you can build as big a house on it as you want, and you can even sell it, but once you sell it, your money will be deposited into a special account that you can never access. The money will be in your name, but you cannot use it. If you wait for several years, and beg for permission repeatedly, maybe – maybe – you might be allowed to use part of it.

You would think of this situation as absurd, and if the seller refused to change their conditions, you would simply walk away, never putting your money into that property at all. Neither would anyone else who found this property and was given the same conditions.

That, in a nutshell, is what the government of Pakistan has been saying to foreign investors, and to Pakistanis with large amount of money: once your money enters Pakistan, it can never leave.

On the face of it, the rule is absurd: it is their money that they have paid taxes on already. Why should the government tell them where they can take it? Yet that is exactly where the law currently stands.

If the government wishes for foreign investors to find Pakistan a more attractive place to do business – and for its wealthier residents to deploy more of their capital here rather than stashing it abroad – it needs to first change the rules not about having the money come in, but the rules that affect when and how it can leave. Because nobody wants to enter a place they are told they can never leave, no matter how pleasant it may be.

Farooq Tirmizi
Managing Editor, Profit Magazine. He can be reached at [email protected]

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