LAHORE: Board of Investment (BoI) Chairman Naeem Y. Zamindar has said that efforts are well on the way to make Pakistan a key destination for foreign and local investment.
Talking to Lahore Chamber of Commerce and Industry (LCCI) Senior Vice President Khawaja Khawar Rashid, Vice President Zeeshan Khalil and executive committee members, BoI chairman said that foreign direct investment was increasing gradually and a target of $ 3.7 billion has been set for the ongoing year.
He said that Pakistan has lucrative opportunities for both foreign and local investors in various sectors of the economy, including textile, energy, agriculture, health, education and other sectors. He said that special attention is being given to the Special Economic Zones (SEZs) under the game changer project of China Pakistan Economic Corridor (CPEC). He said that volume of Chinese economy is expected to be $ 30 trillion within the next 25 years and Pakistan can grab huge benefits as economies of both countries are going to be merged under CPEC. He said that cost of doing business in Pakistan must be reduced as the business sector is driver of economy.
“We want to brand Pakistan as entrepreneur future country by introducing innovations and modern industrial concepts on SEZs and Priories Economic Zones (PEZs)”, chairman BoI said.
The LCCI Senior Vice President Khawaja Khawar Rashid said that the business community has serious concerns about the declining trend in FDI despite the fact that CPEC has brought positive change in the current scenario of national economy. He said that there are 48 countries which have signed Bilateral Investment Agreements with Pakistan but their share in total investments inPakistan is negligible. BoI has to target these countries for marketing the investment potential of Pakistan. In fiscal year 2014, the size of total foreign direct investment in Pakistan was around dollar 4.44 billion which contracted to dollar 2.48 billion in fiscal year 2017 registering 44% decline. There is same trend witnessed in July-November 2017 figures of FDI which registered 43.6% regression.
He said that special Economic Zone Act was promulgated in September 2012. Among the fiscal benefits to foreign investors, one time exemption from custom duties and taxes for all capital goods was expected to turn around the economic activities but it did not happen that way. Similarly, under Investment Policy 2013, there was equal treatment to local and foreign investment and the foreign equity upto 100% was allowed but these steps did not produce healthy results. The investment to GDP ratio of Pakistan is around 16% whereas for a developing country, it should be around 30%.
Vice President Zeshan Khalil said that there is a dire need to discourage the spend thrift consumption and offer special rates for encouraging the savings. The Bank of China has started its operation in Pakistan. BoI can make use of bond market by way of issuing special bonds to draw funds from Chinese investors. He said that Pakistan is still falling behind India, Sri Lanka and Bangladesh in Baseline Profitability Index (BPI) report which indicates that Pakistan has to take number of steps to improve its rank among the Foreign Direct Investment (FDI) friendly countries.
Zeshan Khalil said that there are almost same countries which are investing in Pakistan since long which include USA, China, Luxembourg, UAE and UK. New investors from other countries should be encouraged to consider Pakistan for investments. There are a number of reasons of low level of FDI which includes political instability, policy adhocism high cost of doing business, poor law & order situation and corruption etc. Favorable business climate for the foreign investors is the need of the hour for which BoI must take measures on war footing basis.
He said that wrong perception of Pakistan in the global market adversely affects any effort made to attract foreign investors. There are lot of overseas Pakistani having tremendous funds to invest somewhere are looking for investment in their home country. The BoI must take necessary steps to channelize these resources to Pakistan. Former President Tariq Hameed, Mian Muhammad Nawaz, Nabila Intesar and Javed Iqbal Bhatti were also present in the meeting.