To promote joint ventures, encourage greater collaboration between the private sectors and consider establishing air links between the two nations


May 29 - June 06, 2004





The visit of Sultan of Brunei, Haji Hassanal Bolkiah to Pakistan last week has given a boost to the relation between the two brotherly Islamic Countries. The Sultan had extensive discussion with President Pervez Musharraf and Prime Minister Mir Zafarullah Khan Janali on different aspects of bilateral relations, regional and international situations. The two sides also signed three MOUs envisaging expansion and consolidation of cooperation in defence, terrorism and regular consultations between the foreign ministers of two countries.

The most significant out come of the visit is an agreement in principle to set up a joint investment company. The Sultan of Brunei has welcomed Finance Minister Shaukat Aziz's proposal that a joint investment company be established in Pakistan with capital investment from both the sides, and the matter is to be discussed by the officials of the two countries. The pattern of the proposed investment company would be similar to that of others already operating in Pakistan in collaboration with Libya, Kuwait, Saudi Arabia and Oman. This proposal, when implemented, would open the way for capital inflows from Brunei in the form of long term loan financing for industrial and other projects which may be set up by private investors in the country. Such joint investment companies are described as development finance institutions is based on contributions in foreign exchange by the Islamic countries mentioned above to the extent of 50 percent, while the remaining 50 percent is subscribed by the Government of Pakistan in local currency. Additionally, the oil-rich Muslim countries with stake in these institutions also provide lines of credit in foreign exchange from time to time for financing viable projects of economic importance in the private sector.ol

While discussing the proposal with the Sultan of Brunei on the eve of his departure on Thursday last at the conclusion of his three-day state visit of Pakistan, Shaukat Aziz also hinted at the possibility of Brunei's capital investment in Pakistan in financial services, tourism and other viable avenues. The establishment of joint investment company would initiate the participation of Brunei in the development of Pakistan's financial services. This institution may further be supplemented through establishment of a lease finance company for financing projects and consumer durable.

It may be pointed out that Pak-Oman Investment Company was established about a year ago. A new joint investment company with capital support from Brunei will be a promising addition to the financial sector in Pakistan.



The operations of Pak-Libya Investment Company, Pak-Kuwait Investment Company and recently of Pak-Oman Investment Company in Pakistan have significantly filled the gap created by the DFIs virtually ceasing long term loan financing in foreign exchange due to discontinuation of lines of credit from the World Bank to them. Thus the alternative source of foreign exchange inflows through the joint investment companies has proved to be a well-sustained institutional arrangement for projects financing in Pakistan. The joint statement issued at the end of the Sultan's visit emphasized the need for closer cooperation between the two countries in economic activity besides cooperation in the fields of defence, combating international terrorism and cooperation in fighting against other crimes on a global basis. It was also decided that the Joint Economic Commission proposed to be created would have the status of a joint Ministerial Commission.

The outcome of the visit bears testimony to the fact that a lot of spadework was done to upgrade bilateral relations substantially. Brunei is a small country both in terms of area and population but this wealthy state enjoys a lot of goodwill amongst nations of the world because of the visionary policies of its ruler. Sultan Hassanal Bolkiah is committed to spend generously for the welfare of his people and has always supported Islamic causes. This was also amply reflected when the brotherly country extended wholehearted support to Pakistan in its bid to join the ASEAN Regional Forum. Now it has also promised to help Islamabad attain full dialogue partnership of the organization. Brunei has shown its keenness to forge relations with Pakistan in different spheres of life. The joint statement issued at the end of the visit of Haji Hassanal Bolkiah contains a road map for bringing the two countries still closer in various fields. If implemented with the same zeal, it would surely take their cooperative relationship in political, economic, defence commercial and cultural fields to new heights to their mutual benefit. Pakistan offers a lot of investment opportunities especially in oil and gas, telecommunication, information technology and infrastructure development. The country is also pursuing a comprehensive privatization agenda that also presents lucrative opportunities for investment to foreign companies. It is, therefore, satisfying that Sultan of Brunei gave a commitment to direct his country's investment agency to explore possibilities for meaningful investment in Pakistan. The decision to promote joint ventures, encourage greater collaboration between the private sectors and consider establishing air links between the two nations would give a boost to promotion of bilateral trade. The visit has, no doubt, added new dimensions to the already fraternal relations between Pakistan and Brunei and it is hoped that the officials would not be lacking in translating into reality the sincere desire of the two sides to bolster their ties.