Exclusive interview with Mr Naeem Zamindar – Chairman, Board of Investment
PAGE: Tell me something about yourself and BoI (Board of Investment) please:
Naeem Zamindar: I am a results-driven business leader with experience in venture capital, building businesses in mobile and fixed line communications, cable TV and mobile financial services, renewable energy and education. Previously, I have been the CEO of Acumen Fund and Wateen Telecom, founding team member and CSO of the largest private sector company in Pakistan — Jazz, and a Senior Investment Manager at Intel Capital in Silicon Valley.
The Prime Minister has a vision for a prosperous and progressive Pakistan and wants to accelerate our growth rate and investments are a key driver to make that happen. He saw in me the potential to drive that initiative by using my experience of turning around and building high growth companies.
I believe that we can grow at over 9% by leveraging the CPEC opportunity to ride the growth of China, leap-frogging by using innovation and digitalization, and the experience and capital base of our 9 million strong diaspora. The Board of Investment (BoI) is the apex Government Agency for facilitating, promoting and protecting investment. The other important role of BoI is policy reforms and advocacy to improve investment climate in the country for both local and foreign investors. The main initiatives of BoI are facilitating establishment of Special Economic Zones across Pakistan as well as under CPEC and improving Ease of Doing Business in the country in collaboration with concerned stakeholders.
PAGE: What is your take on GDP growth over the period of last five years?
Naeem Zamindar: Pakistan’s growth rate has been constrained by the energy shortage and lack of investment due to the impact of the war in Afghanistan. Both these issues have and are being addressed and we are now ready for growth. Pakistan has regained macroeconomic stability by taking tough decisions in the initial two years and now these reforms are paying dividend as economic growth has created a new record in every successive year. Last year we achieved highest growth of the decade at 5.3 percent and this year we are approaching 6 percent. The growth is broad based and evenly contributed by major sectors i.e. agriculture, industry and services.
PAGE: Do you think that increasing contribution of services sector is good for our economy?
Naeem Zamindar: It is a global phenomenon that demand for services is increasing with substantial improvement in living standards. Pakistan is not an exception and now services sector is contributing almost two-fifth of GDP. This share is in line with the trend prevalent in other economies. Following global trends, financial, social and community services, trade, transport and communications are expanding at brisk pace. Singapore, Dubai and Hong Kong are typical examples of service led economies. With growing incomes there is wider scope for increase in share of services sector in the economy and emerging services sector is creating decent jobs.
PAGE: How would you comment on the power supplies for the industry?
Naeem Zamindar: There is empirical evidence that energy outages cost Pakistan economy dearly and it held back economic growth by two percentages points in recent past. Major victim of power outages was our manufacturing sector. The government in the first three years tried to mitigate this loss and in the fourth year, it exempted industrial sector from load-shedding. Now the demand for power of the industrial sector is fully met. The impact is obvious and large-scale manufacturing sector registered over 7 percent growth in the first five months (July-November) of this fiscal year and the trend is likely to continue and will spearhead the GDP growth to 6 percent this year.
PAGE: Your views on economic reforms for the betterment?
Naeem Zamindar: Economic reforms agenda of the government is now in the takeoff stage. Significant reforms in the taxation sector are being planned to make it more broad based, growth oriented and equitable. Severe energy deficit has successfully been addressed and now the focus is on reducing the cost of energy and by changing the energy mix towards locally produced coal, availability of LNG and a focus on renewables will make us globally competitive; significant public investment is taking care of infrastructure deficit; enabling environment for investment has improved a lot; growth has become more inclusive and Pakistan inched up by 9 notches in inclusivity index of WEF; the outreach and coverage of social safety nets is being expanded; restructuring of SOEs is being pursued; and regulatory bodies strengthened.
There are many other successes in the field of economic reforms. The positive contribution of these reforms is that fiscal deficit is brought down from 8.2 percent of GDP to 4.6 percent in the last four years; and economic growth is placed on the higher growth trajectory and moving towards 9%.
We have to make a 9% sustained growth rate our national mission, where all policies and decisions need to be driven by this mission. This is essential to channel our youthful and fast growing population, to be able to develop a country where its people are able to live life to its full potential.
PAGE: Your views on exports and FDI:
Naeem Zamindar: The structural problems and global inhospitable environment impacted our exports during last three years. The government introduced various incentives for the export-oriented industries and a comprehensive package helped restoration of exports in the current year. Exports witnessed double digit growth in the first half of the current year. This is the highest-ever growth in exports since 2011 which implied effectiveness of export package given last year. The government is also re-negotiating FTA with China to incentivize Pakistani industry by gaining more concessions for them.
On the other hand, FDI was the victim of worsening security environment and energy crises in the country since 2007. Now security and energy situations have improved and the government is also removing irritants hampering investment climate.
Prime Minister of Pakistan has recently constituted a Steering Committee under his lead to steer and monitor the progress of reforms. Under the umbrella of Steering Committee and in cooperation with the World Bank, a 100 Days Action Plan has been initiated in December 2017 in consultation with all federal and provincial stakeholders for DB 2019 to get the low hanging fruits.
BoI is the secretariat of this committee. Chairman BoI has been entrusted to lead the Technical Advisory Group on EoDB. This 100 Days sprint mainly focuses on seven main areas of business cycle, which includes starting a business, getting construction permits, land registration, access to credit, paying taxes, trading across borders and getting electricity etc. A lot of reforms actions have already been completed and some reforms are in progress. We are quite confident that this year Pakistan would be having a lot of improvement in its ranking in EoDB. Our goal is to improve our ranking from 147 out of 190 countries to top 100 this year and within top 50 within next 3 years we will create the enabling environment that is conducive for investors.