Islamabad: A new Gallup Pakistan study, Pulse of the Business Community in Islamabad, reveals that while businesses express moderate satisfaction with some civic services, they also report persistent challenges in infrastructure, regulation, and the rising cost of doing business. The study is based on extensive fieldwork with business owners across Islamabad's commercial areas.
The study highlights wide disparities in satisfaction with civic amenities:
Street lighting (57%) and police presence (56%) received the highest satisfaction levels.
Parking and traffic flow received the lowest rating, with 47% dissatisfied, the only category to register a negative net score (-2%).
Cleanliness, water and sewage, and garbage collection saw satisfaction levels around 52-55%, but dissatisfaction remained high (38-39%).
A striking 40% of businesses reported traffic congestion as their most common problem in the last six months, followed by water/sewage issues (38%) and power or lighting interruptions (34%).
Businesses expressed strong concerns about regulatory burdens: 57% believe the tax system (FBR) is unfair to SMEs. 38% acknowledged having to make unofficial payments ('speed money'), highlighting continued informal practices.
Tax filings and audits were identified as the most burdensome regulation (56%). Interactions with government authorities were lukewarm at best, with only 45% reporting positive engagement with the FBR and similar patterns for CDA, EOBI, and police/local administration.
The business outlook shows signs of strain:
58% of owners say their business performance has worsened over the past year. High rent and utilities emerged as the top challenge, cited by 51% of respondents. Looking ahead, 39% plan to maintain their current size, 33% plan to expand, and a small number consider downsizing or exiting their current location.
Formal credit uptake remains extremely low: only 8% applied for financing in the past year, with incomplete documentation and banks' reluctance to lend to SMEs emerging as top barriers.
Islamabad's business landscape is dominated by:
Service sector businesses (24%), followed by retail (14%) and real estate (10%). 81% of businesses operate on rented premises, and 72% say commercial rents are high, with over half terming them very high. 63% of businesses have 1-5 employees, and 58% have been operating for more than 10 years.
Unexpected rent increases affect 38% of businesses, contributing to instability.
Nearly 65% of businesses are not part of any association. The Islamabad Chamber of Commerce and Industry (ICCI) dominates membership at 54%. Only 24% say their association seeks input for policy advocacy, and just 40% consider their association effective. Crucially, 55% express interest in joining a stronger business platform for collective representation.
A clear 61% majority supports establishing an elected local government in Islamabad. Business owners most frequently expect such a government to: Resolve business/local issues (14%) Improve facilities (13%), Address taxes, parking, cleanliness, and sewage problems.