Federal Minister for Water and Power Mr. Khawaja Asif
Federal Minister for Information SenatorPervaiz Rashid
Worthy members of Diplomatic Corps
Distinguished Foreign Investors
Ladies and Gentlemen
I welcome you all today to a clean and green Islamabad at the onset of lovely winter. I hope that the Board of Investment is taking good care of you and is facilitating your business parleys with both public and private sector concerns.
It is my singular privilege to inaugurate the first International Investors Conference so usefully organized by Board of Investment. I am sure that this is just the beginning of a round of such gatherings that will continue to become more frequent as the time goes by.
This conference intends building upon the economic initiatives taken by our government over the last 15months. The conference will also dwell upon the excellent avenues open for investment in Pakistan. It will also apprise you of the roadmap my government has laid down for further expanding economic opportunities available in Pakistan through structural change and institutional reorientation.
Pakistan is a demographically vibrant country with an estimated 9th largest available work force. Its estimated 110 million working population constitutes 60% of the total population making Pakistan rich in terms of human resource particularly when majority of it comprises of youth.
Pakistan’s unique geographic matrix offers vastly diverse opportunities. Its central plains are a rich granary feeding 180 million people, its shores providing shortest sea access to landlocked Central Asia, its northern mountainous regions overflowing with natural springs and its southern hilly tracts brimming with mineral resource. Pakistan therefore offers avenues for developing its vast reservoir of diverse agricultural, industrial, services, natural and mineral resource portfolios located in accessible contiguous areas, a prospect that promises to be no less than ideal.
Ladies and Gentlemen
Since taking over the reins of government,our pressing priority was to draw and start implementing a comprehensive macro-economic course stipulating increase in revenue, control of expenditure and reduction of fiscal deficit. Concurrently,we devised a vast development portfolio aimed at upgrading the national infrastructure. We have been fortunate to embark upon the right path and our endeavours have successfully stabilized currency, increased foreign exchange reserves and controlled inflation. The increased liquidity encouraged the banking sector to extend credit to private sector thereby aiding productivity. My government also applied much needed checks on intra-institutional borrowing and restoring fiscal balance.
Our projected GDP growth ranges between 4 and 6%and is considerably higher in comparison to the past where it consistently failed to cross the 3% barrier. I expect that our economic policies will bring about capital formation that in turn will create employment opportunities and increase Tax-GDP ratio currently counted as the lowest in the region.
Being very mindful of the vast gap between production and requirement of energy, my government planned installation of all kinds of power generation units to boost energy production. I am happy to mention that we added 1500 MW of operational capacity to our national grid, and have put in pipeline numerous projects whose production will soon outstrip demand. We plan privatizing power distribution network along with rationalization of tariff that will make investment in power sector very attractive.
My government believes in no-holds-barred foreign investment regime, and I have mandated Board of Investmentas the high-level one-window agency empowered to facilitate investors in planning and implementing their ventures. We have reserved a large competitive and accommodating space for foreign investment that forms an integral part of our development drive.
Although, in the last decade or two, Pakistan has been rather slow in adapting to fast-changing globalized economic developments; but it is now fast catching up. Our government is fully aware of the vertical integration of economies in a globalized world. Our economic policy has been instrumental in throwing open doors laden with vast opportunities for prospective investors to reap benefits of this belated drive to make up for the lost time.
I wish to point out that the gradual but steady escalation in the Baseline Profitability Index (BPI) strongly signifiesPakistan as an attractive investment proposition, including a long term business association. Stringent monitoring of vital ingredients required for realizing higher rates of return on investment such as stable economic growth, capital controls and exchange rates are visibly showing healthy upward trends. Our government’s effective arrest of unprecedented decline in the value of Pakistani currency managed to bring about an equally unheard of rise in the value of Rupee estimated to be more than ten percent vis-à-vis all important currencies!
The confidence of offshore investors was boosted when the gradually improving macroeconomic indicators brought about oversubscription of the government-backed Eurobond issue. The booming stock markets of Pakistan are vindicating progressive economic initiatives taken by the government.
Ladies and Gentlemen
I am of the view that well coordinated fiscal and monetary policies not only put fragile economies back on rails but they also create opportunities for investment. In this connection, we have created space for investment by carrying forward the process of privatization. We are very transparently disposing off partial equity in large scale public sector enterprises, the latest being that of Oil and Gas Development Corporationas well as of Pakistan Petroleum Limited. We have taken similar steps about the largest banking house, Habib Bank Limited along with large high street banking concerns, United Bank Limited and Allied Bank Limited. I take this opportunity to invite you to participate in this initiative and discover for yourselves the financial feasibility and productivity of investing in Pakistan.
We have invited our private sector to set up a LNG import terminal with the aim to replace costly furnace oil power generation. We will soon build an LNG Terminal at Gwadar Port, the third largest warm water port of Pakistan located in mineral rich Baluchistan.
I wish to point that Pakistan is widely recognized to offer extremely liberal foreign investment regime in the region. It allows one hundred percent foreign equity and no limit on repatriation of profits particularly in large scale infrastructure and manufacturing sectors. It is home to rapidly growing private sector leading fast paced market-oriented economy. The increasing middle class has given rise to widespread consumerism encouraging healthy returns in food and other consumer goods sectors. The potential growth sectors such as infrastructure, power and natural resource are open to large scale investment. On the social side, Pakistan requires versatile up-gradation of education and health sectors with a view to competitively synchronize them with rest of the world.
Investment incentives in Pakistan are diverse and business friendly. We offer prospects of co-production, joint ventures with local partners and joint marketing arrangements. The taxation regime is one of the lowest in the region and its collection is undertaken through very well oiled dedicated Large Taxpayers Units. A multiplicity of tax concessions is available along with provisions of tax exemptions to specific businesses. We also provide exclusive economic zones and infrastructure subsidies as well as research and development support.
Ladies and Gentlemen
Pakistan is evolving into a mature and pluralistic democratic polity. My government is very well cognizant of the deficiencies inherent in our national body politic. I am keenly aware of the aspirations of the people of Pakistan who have yet again reposed their trust in us to deliver upon much needed improvement in their lives. I want to assure you that our government shall leave no stone unturned to discharge this heavy responsibility.
My government is positively responding to the impending social change through wide ranging economic development with inbuilt welfare undertones. However, as the rule goes, the economic prosperity comes, but only in the company of the political and social maturity. The road lying ahead is indeed laden with massive challenges and expectations, but we have embarked upon it with patience and prudence, and will keep pursuing it with unflinching steadfastness.
We are fully resolved to improve the lot of Pakistanis through massive capital infusion in economic body politic of Pakistan by investing it in viable development initiatives. As a relief measure to subsidize meagre incomes of a considerably large segment of Pakistanis, our government is already spending around 80 billion rupees on various income support and employment generation schemes. I wish to add much needed productivity to the hitherto welfare-oriented but economically-unproductivesocial supportoutlay.
We encourage investment not only as a tool of economic development but also as friendly long term cooperation.I am sure that not in too distant a future, we may find ourselves proudly claiming that we all lent a hand in enabling Pakistan to prosper! It is a noble goal and worth endeavouring for. I am sure you all will agree with me.
I convey my good wishes and thank you all.