By AMANULLAH BASHAR
Jan 24 - 30, 2000
Former prime minister Moeen A. Qureshi has described the pressures from
outside Pakistan for restoration of a democratic setup as insignificant as according to
him actually the acceptance of the policies by the local people carries more weight. If
the local population is happy and accepting the policies of the government of the day no
matter who is opposing outside Pakistan whether it is the United States or any other
country for that matter.
Moeen Qureshi however said that people of Pakistan would expect a firm
and decisive implementation of the policies and the reforms it is introducing and this
would be the only criterion for the people to differenciate between present and the
During his recent visit to Pakistan mainly to introduce the newly
launched $1.5 billion IDB Infrastructure Fund. Moeen Qureshi was discussing the economic
issues faced by Pakistan at a Press Briefing held in Karachi.
Regarding investment climate in Pakistan, he observed with a clarity of
mind that local investors are always the model of judgement for foreign investors to
choose a country for investment. Unfortunately, it was an otherwise situation in Pakistan.
The complexities of NOCs to be given by different government agencies, obnoxious
red-tapism, inconsistent government policies and a lot more altogether have created a bad
impression of the country for investors both within the country and from abroad.
Mishandling of the IPPs issue was another discouraging factor. The present government
seems to be determined to remove all these snags however firm implementation of the
policies and decisive attitude the policy makers would do the job, he reiterated.
Replying to another question, Moeen Qureshi said that it is not the
time for devaluation or adjustment in Rupee against dollar. It is the improvement in the
infrastructure both in Agriculture and the Manufacturing sectors besides weeding out of
the corrupt elements from the system to ensure smooth sailing of the business.
Introducing the IDB Fund, he said it will consider investments in:
Power and Energy Related Facilities, Telecommunications systems and services,
Transportation, Water, Sanitation and Environmental Services, Natural Resource
Development, Infrastructure-Related services and facilities and Financial Services.
He indicated that the Fund is willing to participate in privatization
programme of Pakistan through its Equity Capital in listed, infrastructure-related
companies when particularly attractive opportunities arise.
He said that Fund has a strong motivation to build and maintain long
term relationships in the countries in which the Fund invests. In certain circumstances,
the Fund may invest in projects in partnership with governments which seek to retain an
equity shareholding. The Fund will not require a sovereign guarantee from the host
government in order to make investments.
The Fund would like to be a partner in the development of
infrastructure projects for international project sponsors. As a financial investors, the
Fund generally will not seek a controlling position in the project. For local companies
and investors involved in or seeking to get involved in major infrastructure projects, the
Fund can be a partner.
The Fund will be established in Bahrain as a limited partnership with
Equity Capital targeted at $1billion (with a first closing at $500 million). IDB has
committed $150 million and DMI has committed $100 million towards equity investment. The
Manager will use its best efforts to cause investee companies to employ Islamic finance
techniques with respect to every equity investment made by the Fund.
The Complementary Finance Facility( CFF )will be deployed in
conjunction with the Equity Capital. IDB and DMI have each committed $100 million to the
CFF. The balance of the CFF will be sought from a select group of banks and financial
The Fund will also establish relationships with other Islamic banks and
financial institutions in order to create a larger Syndication Group that would be
approached on a project by project basis to participate in providing additional financing
for the projects in which the Fund makes an equity investment.
A Policy Management Company(PMC) will be established in Bahrain to
provide policy guidelines and monitor their implementation. The President of IDB Dr. Ahmad
Mohamed Ali will be the Chairman of the PMC.
Investors contributing at least $100 million to the Equity Capital
(Lead Sponsors) will be shareholders in the PMC and will participate in policy making and
enjoy co-investment rights.
The Islamic Investment Company of the Gulf(Bahrain) E.C (IICG) a
subsidiary and the investment arm of DMI will act as an adviser to the Fund and the CFF.
The Chairman of DMI is Prince Mohamed Al Faisal Al Saud.
The Chairman of EMP Moeen Qureshi will serve as Chairman of the Equity
and the CFF Investment Committees for the Fund. To manage the Fund, EMP and the DMI
partnership (Bahrain) E.C Mumtaz Khan a Managing Director at EMP will be the Chief
Executive Officer of the Fund.