An Interview Ahmed Shamsul Huda Acting Chief BoI
From Shamim Ahmed
May 08 - 21, 2000
Under developed countries cannot achieve speedy economic development
without foreign capital. History of world economy shows that less developed countries
realized their dreams of economic growth within a shorter period with the help of external
factors. Otherwise if they had financed their development programme out of their own
resources, it would have taken them many decades to reach their existing level of economic
development. China Malaysia and Indonesia are some of the examples of such countries.
It was with this objective of attracting foreign investment to Pakistan
that a special high profile organization named as Board of Investment was established
during PPP government to study how China, Malaysia and other developing countries managed
to attract the foreign investors and initiate policy measures on the same lines to bring
investment in the country. The organisation did useful work, prepared feasibities of
various profitable projects in Pakistan, offered guarantees for protection of investment
and repatriation of profits to the investors, and providing one window operational
facilities to foreign investors including overseas Pakistanis. In the beginning the policy
proved highly successful and over 2 billion US dollars were attracted mainly in the power
sector, during 1995-98 period. Gradually, however, the flow of foreign investment declined
for various reasons mainlly the frequent changes in political setup, dispute with
IPPs, political witch hunting freezing of foreign currency account and the ongoing
accountability process. The foreign investment during July 99-March 2000 period hardly
touched the figure of 250 million dollars.
Presently the BOI is without its Chairman and even its Secretary. A
senior Joint Secretary is looking after the organization which has a large set up.
Page put some questions to the acting Chief of BoI Mr. Ahmed
Shamsul Huda who was kind enough to provide answer in writing, following are the questions
and their answers.
Q. What efforts Board of Investment made during the
year 1999 to bring foreign investment in Pakistan? What were the results?
A. The Board of Investment is a facilitator and
promoter of FDI. Promotional aspect is linked with image building/marketing while
facilitation is to serve the existing and potential investors. We have effectively
projected the positive impact of the reformatory measures undertaken by the present
Government for economic revival and improving the environment for investment which greatly
contributed in the restoration of investors confidence. The Investment Promotion and
Technology Transfer Event (Intechmart) jointly organized by the BOI, UNIDO, FPCCI &
Export Promotion Bureau was attended by around 40 foreign companies from eleven countries
to pursue investment / joint venture in Pakistan. Such response by foreign investors is
manifestation and recognition of the serious efforts of the present Government for revival
Q. It is commonly felt the flow of foreign investment
in Pakistan is constantly on the decline. Is this perception correct? Why?
A. The overall flow of Foreign Direct Investment (FDI)
ranged between US $ 248 million to US $ 47 million during the last nine years. The
abnormal increase in FDI during 1995-98 related to investment in power sector. The IPP
issue adversely affected the investment in this sector. However, issues stands settled in
respect of all power projects except Hubco, and active negotiation are in progress with
them to resolve the issue. It may be noticeable that the inflow of investment of US $ 306
million was registered during July 1999-December 1999 as compared to US $ 248 million
during the corresponding period of the last year.
Q. You incurred heavy expenditure on organizing
"investment moots" in a number of foreign countries last year with special focus
on Pakistani expatriates. Why you failed to inspire their patriotism to bring their money
A. It is not correct that heaved expenditure was
incurred on investment moots in Middleast countries. Gulf and Turkey. The conferences in
these countries were organized in collaboration with the sponsorship of the Chamber of
Commerce and Industry of respective countries as well as the Islamic Chambers of Commerce
and Industry. These conferences successfully gained the objectives of presenting
investment opportunities and invoking the interest of potential investors to pursue
investment and joint venture in Pakistan.
Q. What are the prospects of foreign investment coming
to Pakistan during the year 2000? Do you foresee any improvement in the situation?
A. A number of foreign companies and overseas
Pakistanis have conveyed specific areas of their interest for investment. However, the
factors of unstable economic conditions, distortion in the process of implementation of
policies and law and order situation during the previous years were impeding the foreign
investors to pursue their projects for investment. Improvement in the economic management,
transparency in the working of government machinery, stable law and order situation would
rekindle their interest to avail the recognized prospects of investment by the foreign
investors. The recent visit of a number of foreign business delegation to Pakistan is an
evidence of their revival of confidence in the policies of the present government.
The Acting Chief of BOI said that a high level delegation of
businessmen from Greece which visited Pakistan last month showed keen interest to invest
in the field of shipping, telecommunication, petroleum, gas, manufacturing of electronics,
projects of Science and Technology and fish farming. The delegation felt there was a great
scope of expanding economic relations between Greece and Pakistan and highly appreciated
the economic measures adopted by the present government regarding restoration of
investors' confidence, Mr. Huda added.
Earlier a 10 member Chinese businessmen delegation from different State
enterprises, led by Voice Chairman of China Council for the Promotion of International
Trade, Mr. Ma Yue, expressed desire to explore more areas of collaboration by China and
Pakistan for Investment and Trade. Mr. Ma told that the Chinese Council (CCPIT) was a body
authorized by the Chinese government to explore possibilities of Chinese Investment abroad
and vice versa. He described the existing mutual investment between China and Pakistan as
far from enough and stressed the need for increased economic collaboration between the two
Acting Secretary, Board of Investment gave a detailed presentation to
the Chinese delegation about the liberal investment policy, various incentives and
facilities offered to investors in Pakistan. He also explained in brief the viable
investable projects for investment in Pakistan in various sectors including Port &
Shipping, Energy, Infrastructure, Electronics, Education, Health and Petroleum. A set of
summary of sectoral studies done by BOI in the field of Electronics and Information
Technology, Hydropower, Environmental and Infrastructure, Telecommunications, Pulp, Paper
and Packing industry, Fishing, Fish Processing and Fish Farming was also provided to the
leader of the Chinese delegation. Mr. Huda further informed the delegation that with the
introduction of economic reforms package by the present government there were signs of
improvement in our economy. The stable dollar-rupee parity, upward trend in share market
are the indicators of confidence of investors in Pakistan economy.
The Board of Investment is confident that as a result of the visits of
2 high level delegation in two months and the keen interest expressed by their members in
specific sectors, some positive response will be received in due course.