Investment either local or from external resources is
the key factor for creating economic activity, job opportunities as well
as producing export surplus to foreign exchange for the country.
Recently, a two-day investment conference of the OIC
countries was held in Islamabad which was certainly a timely decision on
the part of the economic managers. There is a feeling that in the
aftermath of Iraq war, investors from Islamic countries were naturally
looking for the safer zones for investment of their surplus funds. This
was the time to click to attract investors by offering incentives,
highlighting strategic location of the country and on top of all the
assurance for secure investment in this country.
The conference was attended about 200 foreign
delegates and with an equal number of local industrialists and traders.
The conference also provided an excellent opportunity
for interaction both at the government level as well as between the
partners of the private sector. The conference discussed the
opportunities for investment in Pakistan in the sectors like
agriculture, small and medium enterprises, livestock, fish farming,
biotech crops, biotechnology, water conservation, oil exploration,
potential in hydrocarbon, replacement of furnace oil with coal,
financing of cross border pipeline projects, copper-gold mining,
financing sector reforms, foreign investment insurance and export
credit, banking in the private sector, banking and privatization
potential, information technology and a host of areas where investment
is possible in Pakistan.
In the current financial year, there are strong
possibilities that the total investment from external resources is
estimated around Oone billion dollars while in the next financial year
2003-04, the investment from foreign resources is likely to take quantum
The factors instrumental in inviting the attention of
the foreign investment besides the consistency in the economic policies
are the global circumstances which are equally important to draw
attention of the foreign investors towards Pakistan.
It is however of vital importance to restore the
confidence of the existing investors within the country both of
multi-national companies as well as the local investors to develop
credibility for friendly and secure investment environment in Pakistan.
In this connection, it is the need of the hour that
all uncalled for irritants due to bureaucratic chains, corruption or
complexity of the procedures are weeded out from the system.
There is also the need to have a careful look on the
schemes and projects which are not responding in accordance to the
policies of the government. In this connection the most appropriate case
could be Karachi Export Processing Zone. It was established some 20
years ago. Some 200 units were sanctioned over a huge land of 500 acres
with availability of entire infrastructure facilities. But, according to
informed sources, only 40 units are operative and most of them are
engaged with ready-made garment business. The foreign investors who had
started business in the early staged had left the zone. The export
performance of the zone is almost negligible which is said to be around
$70 million. The government has provided all needed support, facilities,
incentives and tax holidays but why such a hopeless performance when
compared with the performance of other regional zones in the Dubai and
Sharjah etc. There is a need to sort out problems and irritants if any
faced by the investment within the Karachi Export Processing Zone. A
better performance of the existing investors is the most effective way
to attract the new investors.
Recently, the minister for industries had visited
zones in Malaysia, Dubai and Bangladesh. As a result of this visit, the
investors at KEPZ are expecting that same spirit and incentives and
hassle free environment will also be provided at Karachi zone also. To
improve situation at Karachi Zone is also significant especially in view
of the interest shown by some foreign investors specially from China and
Pakistan is coming out with another important free
zone at Gwadar which according to business sector can be the focal point
of the investors in this region. In order to cash the situation, all
irritants should removed to restore the confidence of the investors.
According to reports, investors at KEPZ are disturbed
due to customs related problems, high infrastructure charges of the
Export Processing Zone Authority, and the levy of 0.5 per cent cess by
the Sindh Government on all imports, entering the zone which were duty
free under the law.
According to a report, the Minister for Production
and Industries, Liaquat Jatoi in a meeting had admitted that the levy of
the cess is contrary to the concept of export processing zone and
assured the traders to take up the mater for withdrawal of the cess
immediately. However, the said cess continues to exist.
Hopefully, the problem will be resolved soon as the
authorities have already promised to look into it. But it is important
and in the national interest that the authorities be made responsible to
nip such problems in the bud so that a hassle free environment could be
ensured at the special zones.