PAKISTAN: EMERGING INVESTMENT DESTINATION ON INTERNATIONAL RADAR
TARIQ AHMED SAEEDI
Dec 27, 2010 - Jan 2, 2011
Pakistan seems to be remerging as an investment destination onto the international radar; at least the outgoing year is filling scintilla of truth into this assumption. The end of year, particularly, witnessed grand investment commitments by China to explore potential-laden energy and mineral sectors of Pakistan. Apart from quantifying the agreements and memorandum of understandings, which are reported variably in the range of 30 and 36 billion US dollar, economic analysts are foreseeing a prosperous era of trade and investments following the realisation of these accords.
The year 2010 is ending with great insecurity in people about the future happenings since law and order and political issues are out of control of the government. However, arising interest of world leaders in Pakistan's economic affairs is creating hopes about the possibility of economic turnarounds.
This year brought a different sense of feeling for the investors as the government decided in this year to revise its policies for attracting investors. Board of Investment in a meeting chaired by Prime Minister Syed Yousuf Raza Gilani approved investment strategy 2010-2015 to devise investment polices in a way that is centred on private sector participation and building of relationships with different countries across the border. The need of operationalising special economic zones (SEZs) and signing of bilateral investment treaties with the partner countries based on comparative advantages was also brought into the attention. It is notable that SEZ Act 2010 has been drafted and under the provisions private sector would be given facilities to cut cost of doing business and become competitive in the international market. The establishment of reconstruction opportunity zones in Balochistan and Khyber Pakhtunkhwa is yet to take place. These zones will bring economic prosperity in the underserved areas of the country and increase economic contributions of these areas in the national economy. The aim is also to increase employment opportunities in the war-ravaged and marginalised northern hinterlands. The government realised the fact that without stable business environment, it is very difficult to convince investors into making investments. Prime Minister said in a meeting in Islamabad that predictability of business environment is necessary to attract investors. However, law and order situation is constantly deteriorating in Balochistan, which can turn up heavens for investors because of bonanza of mineral resources the province possesses.
Analysts are of the view that Pakistan is an ideal place for investments and in the long term, it would provide economic benefits to the initiators. Those who are cognisant of the fact, make investment decisions about a particular place without bothering about the situation in other parts of the country until it has capability to harm the location of investment, they observed.
What the government needs in this situation is to offer investors, local and foreign, options and sectors in which they are aspiring to chip in funds. Critics criticised the attitude of policymakers to leave in lurch an investment avenue for which paperwork has been finished as soon as other option stems. The partial works make the realisation of a project quite impossible. That also entails waste of money on designing of feasibilities.
Karachi marble city is one of such projects, which can bring not only multi-billion investments from local as well as foreign ventures but also earn the country significant foreign exchange on exports of marble and value addition. The project remains a pipedream because of the bureaucratic hurdles. The city can provide employments to 50,000 people.
Marble city was envisaged in 2006 and to be established by the following year. However, the project is still licking dusts in the file room, as government is yet to allot plots making potential investors wait in line to enhance volume of marble exports from Pakistan. The project was envisaged in 2006 and to be completed by next year 2007. However, change in political government caused delay in project's takeoff. Sindh government and Pakistan Stone Development Company (Pasdec) reached an agreement again in April 2010 to establish marble city near the northern bypass in Karachi. Provincial chief minister is yet to allot plot for the project, restricting billion of rupees potential investment.
Chairman All Pakistan Marble Mining, Processing Industry and Exporters Association Sanaullah Khan said 400 units would be set up on approximately 250 acres. Investors are ready to chip in capital, he added. Establishment of processing units will cost minimum Rs50 million and maximum Rs400 million and create employment opportunities for 50,000 people. Mr. Sanaullah said marble industry is progressing despite economic instability and multifaceted problems posing to industrial developments. Marble export fetched $9.5 million during the first quarter of this financial year starting from July 2010, depicting 85 percent growth over the same period a year ago. Marble export is estimated to increase $500 million per annum up to 2015. At present, marble exporters can avail the opportunity of earning million of dollars from exporting marbles to Saudi Arabia. Unfortunately, due to energy crisis, precarious law and order situation, and other obstacles exporters are unable to meet export orders. He said during a recent visit to Riyadh exporters were offered big orders, but they couldn't grab them since they knew they couldn't meet the deadlines. Karachi accounts for 90 percent of total marble exports from Pakistan. Marble processing units in the city are facing worst kind of electricity load shedding. India that consumes one million dollar marble per month is also a potential market for Pakistani marble.
The government should adopt resolution for the New Year that it would remove bottlenecks from investment-attractive projects to create employments and enhance exports.