INVESTMENT CONFERENCE IN ISLAMABAD
The conference jointly organised by Pakistan's Board of Investment and Islamic Chambers of Commerce and Industry
From SHAMIM AHMED RIZVI
Apr 28 - May 04, 2003
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 cases.
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 taxation.