While inaugurating the two-day International
Conference on Investment and Privatisation in OIC countries in
Islamabad, President General Pervez Musharraf told a big gathering of
potential investors from Pakistan and other Islamic countries that
Pakistan was now most welcome country for investment as it offered an
attractive returns on investment.
The conference which was jointly organised by
Pakistan's Board of Investment and Islamic Chambers of Commerce and
Industry and was attended by over 300 delegates was told by no less a
person then the President of Pakistan that he will be acting as a bridge
between the investors and the government committing maximum incentives
to the local and foreign investors. After handing over the governance of
the country to the elected Prime Minister, he had lot of time available
with him which he intended to use to focus on investment and education.
"Acting as bridge between investors and government of Pakistan, I
will on the side of investors to help in removing the bottlenecks",
President Musharraf added.
Besides, Aqeel A. Al-Jaseem, Secretary-General of
Islamic Chamber of Commerce and Industry, Dr. Ahmed Mohammad Ali,
President of Islamic Development Bank and Senator Hafeez Shaikh,
Minister for Privatisation, also addressed the inaugural session while a
message of OIC Secretary-General was read by Izzat Kamal Mufti,
Assistant Secretary-General. Simultaneously, an exhibition of Pakistan's
advances in defence production, tele-communications, automobile industry
etc. was also held at the centre.
Stressing Pakistan's strong suitability for foreign
investment, the President said that 600 foreign firms are operating in
the country with a rate of return between 20 and 26 per cent, which
nobody grudges. Foreign investors enjoy special protection, through
bilateral agreements and avoidance of double taxation agreements. He
declared that never has any foreign enterprise been taken over by the
government. Foreign investment, he added, is on the rise as in the past
such investment averaged half a billion dollars but this year it is
expected to reach one billion dollars mark. But he conceded that this
was not enough for a country of 140 million people.
He strongly dispelled misperception about security
which, he stressed, was against the reality on the ground. "You can
travel round the country and see for yourself", the President told
the large number of foreign and Pakistani investors attending the
conference. He added that special committee of Board of Investment
headed by the Prime Minister will help prompt decision of investment
The President assured of removing any restrictions to
promote investment-friendly policies. The government would stand by tax
reforms and restructuring of the CBR and minimising of human, contact in
tax matters. He assured of reduction in interest rates of small and
medium size industries and said that the government will focus on
implementation of policies.
The President told the investors that there were
great prospects of investment in oil and gas sector, energy, mining,
tourism, agriculture and agro-based industries. A regulatory mechanism
is also in place to curb high costs and low quality service delivery.
He told the participants that the government would go
all along for the privatisation, but it is not an easy task. The
government would persevere and accelerate its pace. According to him,
the privatisation of UBL has created a new momentum. The commission
proposed a strategy to offer partial ownership through strategic sale of
PSO, Habib Bank, PTCL, electricity distribution companies and also
offering shares to ensure broader ownership of these entities. According
to an estimate shares worth four billion have been sold.
He added that with the end to Afghan war, ongoing
reform agenda, fall in interest rates and depreciating exchange rate the
environment for investment is improving. It is time for the investors to
make use of the win-win situation.
The President also dwelt at length, with facts and
figures, on how the economy has been salvaged. It was sinking ship with
multiple holes. During three years of incessant reforms in economy the
holes have been plugged and the ship has been set afloat again; it is
ready for sail now.
Addressing the concluding session of the conference,
Prime Minister Zafarullah Khan Jamali assured the participants that the
macro-economic policies pursued during the past three years by the
previous government would continue to be followed as this was also
desired by the International Monetary Fund and other international
financial agencies, the Prime Minister also promised to make further
improvements in the existing liberal conditions for foreign investors in
the coming years. He was of the view that various ongoing reforms on the
economic front such as taxation reforms and deregulation would create a
more investor-friendly climate in Pakistan.
The conference was undoubtedly a bold attempt by the
newly created federal ministry which is entrusted with the twin tasks of
privatisation and promotion of foreign private investment in various
vital sectors of the Pakistan's economy. The occassion was also marked
by an industrial exhibition which displayed Pakistan's capacity to
manufacture a wide range of defence equipment, advancement in
information technology and progress in capital-intensive industries,
mainly the automobile industry. This exhibition obviously was aimed at
attracting foreign buyers besides providing an opportunity to foreign
investors to participate in projects envisaging expansion in capacity
and innovation in technology.
However, some independent observers were not
satisfied with the number of foreign investors — about 60 — who
participated in the conference. It should have attracted a large more
foreign investors with some big names in the international marketing.
Perhaps timing — in the back drop of Iraq war — not right. The
President, the Prime Minister and the ministry tried to make the best
use of the opportunity.
The President in his address not only dispelled the
general impression of foreign investors that Pakistan was country where
bullets were flying and bombs exploding and therefore the atmosphere was
not suited for secure investment activity. The President described this
anti-investment propaganda against Pakistan as far from truth and
invited foreign investors to tour across the country to satisfy
themselves about the security conditions in Pakistan. He also referred
to the satisfactory performance of about 600 foreign-based companies in
Pakistan, which were earning attractive rates of return ranging from 20
to 26 per cent annually. At the same time there was the guarantee by the
government against the possibility of take-over of foreign managed firms
in Pakistan as this country was bound by agreements with more than 43
countries on investment protection and matters relating to double