Pakistan eyes five billion dollars in foreign investment

Neo

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Pakistan eyes five billion dollars in foreign investment


Sunday, 28 Feb, 2010


Chart showing yearly foreign direct investment in Pakistan since 2001. Pakistan aims to attract foreign investment worth five billion dollars this year, but needs to tackle reform, maximise anaemic growth and stem rampant violence to clinch its ambitious target.—AFP​

ISLAMABAD: Pakistan aims to attract foreign investment worth five billion dollars this year, but needs to tackle reform, maximise anaemic growth and stem rampant violence to clinch its ambitious target.

Last fiscal year, Pakistan recorded its worst economic growth in more than a decade, at two per cent, and attracted only 3.7 billion dollars in investment.

Yet Board of Investment chairman Saleem Mandviwalla is optimistic despite Pakistan's immense challenges.

“Traditionally the investment pace that we had kept — which was an average of five billion dollars a year — I think we should be able to go back to it very soon depending on if the global situation improves,” he told AFP.

“Pakistan faces the global crisis which is going on, the financial crisis, the energy crisis and then on top of these we have the security situation,” Mandviwalla, who is also a state minister, conceded.

Security has plummeted in Pakistan over the last three years with militants on the rampage, killing more than 3,000 people in bomb attacks to avenge the government's alliance with the United States in the war on Al-Qaeda.

Then there is the crippling energy crisis. Power cuts have become routine all year round, choking industry and causing misery for millions.

“With these conditions prevailing on us, which is terrorism and energy shortages, this stops us from really moving the investment the way it should come in,” Mandviwalla acknowledged.

While Pakistan languishes behind regional giants India and China, Mandviwalla takes comfort from the fact that his country, with its relatively advanced infrastructure, does better than other developing countries.

Close ally the United States has tripled non-military aid to Pakistan to 7.5 billion dollars over the next five years, spurring hopes that the cash can boost economic growth and improve security.

“We have to market Pakistan, we have to overcome the local issues,” Mandviwalla said, highlighting opportunities in energy generation, agriculture and infrastructure.

The top three countries providing foreign direct investment (FDI) so far this fiscal year are the United States, with 347.5 million dollars, Britain, 119 million dollars and the United Arab Emirates, 121.8 million dollars, according to the Board of Investment.

The biggest investments flowed into oil and gas, communications and information technology, and power generation, its documents said.

The investment board touts success stories such as investment from mobile phone operators Orascom (Egypt) and Telenor (Norway), Japan's Toyota, Citibank, Standard Chartered Bank and consumer product giant Procter & Gamble.

The board recently signed a memorandum of understanding with General Electric to identify energy, power, transport and water projects.

Azmat Ranjha, the minister for trade in the Pakistani embassy in Washington, acknowledged that investment from the United States — the country's largest trading partner — had slipped because of the security concerns.

But he said it was largely a matter of perception and pointed to fresh investment by large US companies with long experience in Pakistan such as Coca-Cola and Procter & Gamble.

“If you're a start-up, the perception you get once you read all these newspapers is that it looks fairly scary,” he said.

“But those familiar with the region know that most of the problems are in the north near Afghanistan while most industry is in the central and southern part of the country.” Economic analyst Salman Shah said the five-billion-dollar target would be achievable if the government focused more on boosting the economy's disappointing growth rate and lowered interest rates to single digits.

“To achieve the five billion dollars investment, the BOI has to work hard, conduct roadshows and accelerate the privatisation process,” he said.

“Another important thing is the economic growth. With just two percent growth rate, it is difficult to attract the investors.” Despite the 7.5 billion-dollar US aid package, Ranjha said it was crucial for the United States to lift tariff barriers. Proposals to help Pakistan by liberalising trade have been stuck in Congress.

“If the United States wants to hold our hand on the path to the development, there is no better way than by providing market access and that hasn't really happened,” he said.— AFP
 

Neo

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Foreigners to continue investing in Pakistan

Thursday, 04 Mar, 2010

KARACHI: An overwhelming majority 74 per cent of foreign investors in Pakistan have shown interest in continuing to invest during the next two years.

These findings came as part of the Perception Survey 2009 launched by the Overseas Investors Chamber of Commerce and Industry (OICCI) here on Wednesday.

Conducted during September-December 2009, the survey is based on responses from 71 per cent of its membership from diverse sectors and hence can claim to be representative of the sentiments of foreign investors currently operating in Pakistan.

OICCI President Farrukh H. Khan said the general tone of responses from the investor community was positive. However, this positive view was being undermined by deterioration in many factors impacting the country’s business environment.

He said the government needed to formulate an effective strategy to address these concerns if it wanted to bring about a paradigm shift in attracting foreign direct investment, says an OICCI press release.

While the investment sentiment is encouraging, a comparison in perceptions from 2008 reveals that this is lower than the 76 per cent which OICCI members had indicated in 2008.

Though limited, the declining interest of foreign investors is a strong indicator that perceptions can change overnight. The same is supported by the OICCI Investment Survey 2009, whereby members had indicated a decline in investments by approximately 37 per cent.

On business environment, he said, contrary to popular perception Pakistan has various positives to offer to investors and almost 60 per cent of the respondents find the overall business climate to be ‘average.’

Though a positive trend, the results also indicate that there is scope for improvement as 40 per cent of the respondents considered the environment to be ‘poor.’

On policies and regulations, the OICCI president said findings suggest that 86 per cent or 114 members currently located in Pakistan find weak policy implementation as a key obstacle in the smooth running of business.

With reference to Pakistan’s overall system of corporate governance, 57 per cent of the respondents deemed it as ‘average’ or ‘acceptable,’ whereas an additional 10 per cent rated it as above average or ‘good’.

Perceptions have more or less remained the same as compared to 2008.

On law and order, he said a significant majority, 67 per cent of the respondents, perceive that the law and order situation has worsened from 2008. While more than 90 per cent of the respondents or 113 existing investors currently operating in the country do not plan to curtail business due to this concern.

However, the uncertainty that looms above businesses operating in the region has had significant impact on future investment and expansion plans for majority of the respondents as most companies are being conservative in bringing further capital into the country in 2010.

He added the law and order was declared as the number one challenge to business by 90 investors (70 per cent) currently operating in the country.

The respective ministries of Communication, Commerce and Finance were reasonably well performing ministries. Ministry of Ports and Shipping was also regarded as average by most respondents.

The Ministry of Water and Power and the Ministry of Health were the most unpopular, with more than 69 per cent respondents deeming their performance as below average. The Ministry of Law and Justice and Interior and the Ministry of Law were also not very well received by the respondents.

Farrukh pointed out that frequent changes within ministries are a serious concern for businesses. A change in personnel requires building relationships and understanding all over again. This loss of time and resources is an irritant that is easily avoidable and hence should be given due consideration.

A total of 13 regulatory bodies were selected to be analysed by the survey respondents keeping in mind their relevance and importance in the functioning of businesses.

With the exception of Wapda, Nepra and IPOP, for whom at least 62 per cent of the respondents showed dissatisfaction, bodies like SBP, SECP and FBR fared above the rest with 86 per cent respondents (on average) showing satisfaction with their performance. The PTA was also strongly appreciated with approval ratings as high as 90 per cent.

http://www.dawn.com/wps/wcm/connect...s-to-continue-investing-in-pakistan-430-za-07
 

ajtr

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good for the people if this money reaches to them instead of going into the pockets of generals and politicians.
 

ISI

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good for the people if this money reaches to them instead of going into the pockets of generals and politicians.
Lol man its investment not financial assistence
 

ajtr

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China to invest $50 billion in Punjab

LAHORE: Chinese investors have indicated to invest US $ 50 billion in Punjab during the next 10 years. The objective of the investment is to construct a modern and large industrial city along with an industrial estate on 100,000 acres of land.

This was conveyed by Yan Li, leader of a seven member Chinese delegation and chairman Tengzhong group of China, currently visiting Pakistan at a meeting held at the head office of Punjab Industrial Estates (PIE) and Development & Management Company here.

The meeting was presided over by SM Tanveer, Chairman PIE. The meeting was also attended by special advisor to Chief Minister Punjab, Haroon Khawaja, Chairman Planning & Development Department Punjab, Provincial Secretary Industries, Suhan Zuberi from Meril Lynch, Zafar ul din Mahmood CEO Pak China Bureau, Ali Muzzam Syed CEO PIE, Nasir Ali Shah Bukhari of KASB group and Chief Operating Officer Punjab Board of Investment.

The leader of the delegation who is also chairman of a mega Chinese industrial group, Asia International Development Limited, said the investment would provide at least employment to 100,000 families and their group would not only construct a special economic zone but also hospitals and other welfare projects along with the mega project. He said that according to the first year plan, about 5 to 7 billion US $ would be invested and it would be significantly increased in coming years.

He said that overall his group intended to invest up to US $ 50 billion, however, the Punjab government should provide a condusive atmosphere for investment. Chairman PIE SM Tanveer informed the delegation the Punjab government under the leadership of Mian Muhammad Shahbaz Sharif, the Chief Minister of the Punjab, was striving hard to attract foreign investment and the visit was a follow-up of CM Punjab’s visit to China in November.
 

Vinod2070

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Five Billion should not be a difficult target to achieve. I guess perception of the security situation would be the single biggest hurdle.

To be able to sustain this kind of investment Pakistan will have to crack down on the "non-state actors".
 

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