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1- HIGH OIL PRICES LIKELY TO PREVAIL WELL IN 2005
2- RISING INTEREST RAGES
3- PM VISITS SAUDI ARABIA

4- CBR: REVENUE TARGET UPGRADED
5-
CURRENCY IN CIRCULATION

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PM VISITS SAUDI ARABIA

 

Saudi Commerce Minister Hashim Yamani will soon visit Pakistan to discuss investment opportunities

 

From SHAMIM AHMED RIZVI,
 Islamabad
Sep 20 - 26, 2004
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Talking to the newsmen in Islamabad on his return from Saudi Arabia, Prime Minister Shaukat Aziz said that the two countries have agreed to further strengthen their brotherly ties by widening their interaction on Islamic causes, cooperation in fighting extremism and promotion of trade and investment. He said that he had very useful discussion with the Saudi leaders including King Fahad and the crown price Abdullah on these issues and saw enhanced cooperation between the two countries in future.

Prime Minister said that his meetings with Saudi entrepreneurs and economic managers hold great promise and Saudi Commerce Minister Hashim Yamani will soon visit Pakistan to discuss investment opportunities. He said a Pakistani bank will soon start operations in Saudi Arabia and there will be enhanced interaction between the private sectors. "I explained to my Saudi brothers, at length, that Pakistan is a very profitable and attractive investment destination. He said around one million Pakistanis were working in Saudi Arabia and efforts were under way to secure more jobs for them in Saudi Arabia. The Saudis have expressed deep appreciation and regard for Pakistan and its people. Shaukat said the two countries enjoy deep, cordial ties, embedded in history and religion. The relations, he said span over economic, political and defence fields. "Saudi Arabia was Pakistan's true and deep friend and the two had unanimity of views on major issues," he said.

Prime Minister has offered a number of incentives for investors and urged Saudi Arabian business community to benefit from liberal trade policies of Pakistan. Talking to Khalid Zenal Ali Reza and other leading Saudi businessmen, the Prime Minister said Pakistan is one of the countries where foreign investors could find business-friendly atmosphere to get maximum profit. Highlighting the role of Saudi Arabian investors in Pakistan, the Prime Minister asked them to play on 'front foot' in the pro-business climate and take full advantage of incentives. The Prime Minister said, keeping in view vast resources of coal, Saudi Arabian firms should start a mixture of gas and oil fuel to utilize this abundant natural resource in Pakistan.

Shaukat Aziz also discussed various avenues of promoting foreign investment in Pakistan and assured that his government would provide maximum incentives and opportunities to foreign investors with the assurance of continuation in economic policies. Talking to a delegation of Jeddah Chamber of Commerce, Prime Minister Shaukat Aziz said there should be more interaction between representatives of business community of the two countries. The Prime Minister explained future economic policies and said that there was plenty of scope for foreign investment in production, construction and energy sector. He said under liberal economic policies, foreign investors could take 100 percent profit abroad.

 

 

FINANCIAL ASSISTANCE

Saudi Arabia has agreed to provide financial assistance to Pakistan for developing coastal highway and construction of small dams besides investing in other areas. It was agreed during the a meeting of Prime Minister Shaukat Aziz with the Saudi Arabian Finance Minister Dr. Ibrahim Bin Abdul Aziz in Jeddah. The Saudi Arabian finance minister agreed in principle to a proposal to set up a Pakistani bank in the Kingdom to facilitate overseas Pakistani for transfer of their remittances to their homeland. Dr. Ibrahim also agreed to assist Pakistan in the packing and preservation of dry fruits in the Northern Areas.

The Prime Minister informed the Saudi Arabian finance minister that Pakistan offers excellent opportunities and invited Saudi Arabian businessmen to invest in the industrial sector. Shaukat appreciated the performance of Pak-Saudi Investment Company and expressed the desire for more such Saudi Arabian ventures in Pakistan. He hoped that taking the advantage of liberal economic policies of the present government, there would be investment from Saudi Arabia in Pakistan.

Prime Minister Shaukat Aziz's visit to Saudi Arabia is proof of the importance Pakistan attaches to the Kingdom. The Prime Minister chose Riyadh for his first foreign visit denotes the fact that he holds the Saudi rulers, who have always stood by Pakistan, in high esteem. Prime Minister Shaukat Aziz said Saudi investment is grounded in the glorious history of economic ties of both States. Saudi Arabia is the only country that has been coming to Pakistan's aid in times of economic crunch, said the premier, and added the new assistance is in addition to Saudi Arabia help to Pakistan tide to over its economic problems.

The Saudi kingdom has supplied oil to Pakistan on deferential payment. When Pakistan was hit by punitive sanctions because of its testing of nuclear bombs in 1998, it was the Saudi oil supply and economic aid that helped, to a large extent and kept Pakistan's economy afloat. The kingdom has been generously providing jobs to Pakistanis presently, more than a million are employed there. Major portion of Pakistan's overseas remittances come from Saudi Arabia. However, there is yet another fact that the present level of Saudi investment in Pakistan does not correspond to the high status of their bilateral ties.

The same is the case with Pakistani investors, who have failed to exploit numerous investment opportunities in Saudi Arabia. The trade ties, too, need improvement. At a time when Saudi Arabia has introduced new clauses to encourage investment and boost trade, Pakistani investors and traders must explore various ways and means to carve out a respectable niche for themselves in the Saudi market.

Besides, given the success to the existing joint ventures, including Pak-Saudi Fertilizer, more such ventures should be set up. In addition, frequent exchange of trade delegations, at official and private levels, must be ensured. The Pakistani labour force working in Saudi Arabia constitutes an important factor in not only strengthening the friendly ties between the two states, but also in spending remittances to shore up Pakistan's foreign exchange reserves. The number of Pakistanis working in the Kingdom could increase substantially only if the recruitment agencies involved in sending labour from Pakistan to Saudi Arabia could be properly scrutinized and any irregularities involved in this business should be checked.

As for Saudi investors, it is important that investors' reservations are removed. One way of doing that is to improve law and order to inculcate a sense of security in the potential investor. Saudi investors are looking for new territories and avenues to invest their money. Pakistan could become their focus, provided all impediments hampering investment could be removed. With Pakistan being billed as the future hub of trade in South Asia, particularly Central Asia, every effort should be geared towards paving the ground for a smooth flow of foreign investment. This is where Prime Minister Shaukat Aziz's call for fostering tolerance in Pakistan comes into play. It's surely in Pakistan' interest that every expression of violence, which scares away the investor, must be strictly avoided.

In this context, it is a positive sign that Saudi Arabia has authorized the general investment fund to sell the state's shares in a number of joint venture companies, including the Saudi-Pakistani Industrial Development Company to the local private sector. The Saudi government has a 50 percent stake in seven joint venture companies established with a number of countries, including Pakistan, Syria, Egypt, Morocco and Bangladesh, including the Saudi-Pakistani Industrial and Agricultural Company, which is stated to be in sound financial health. Prime Minister Shaukat Aziz's should give a further boost to the efforts by both countries to increase their economic cooperation.