The country will revamp its investment regime and improve decision-making as investment has plunged to historic lows and world leaders have expressed negative views about the decision-making process, which has been marred by bureaucratic red tape.
This was discussed during Prime Minister Raja Pervez Ashraf’s visit to the Board of Investment (BOI) Secretariat on Tuesday to get an update on the investment situation and come up with plans to improve the scenario.
BOI officials briefed the premier on the views expressed by world leaders during their meetings with Pakistani authorities, according to officials.
Investment in the country has dropped to the lowest level at 12.4% of total size of economy. In 2008, foreign direct investment stood higher at $5.4 billion, but dipped to $813 million in 2012.
The prime minister was told that Russian President Vladimir Putin, Turkish Prime Minister Recep Tayyip Erdogan, Japanese foreign minister and a former South Korean ambassador had negative perceptions about investment-related decision-making in Pakistan.
In a bid to improve the situation, the BOI was working on a number of steps including introducing a new investment policy, a five-year investment strategy and holding international investment conferences.
President Asif Ali Zardari, who is expected to visit South Korea in December, may also use the occasion to woo Korean investors, who could be an important investment source for Pakistan.
Two Korean conglomerates have already expressed interest in investing in special economic zones of Pakistan, according to officials.
The government also intends to organise a business forum on the sidelines of D-8 Summit in October this year as part of efforts to attract world investors and improve the country’s image.
In the meeting, the BOI officials said the board would unveil new investment policy next month which would promise further liberalisation and opening of more sectors for foreign investment. The policy will be supplemented with a five-year investment strategy.
The policy will be presented in the 6th BOI board meeting to be held next month. After board’s approval, it will be sent to the cabinet for the go-ahead.
The previous investment policy was announced in 1997, which paved the way for liberalisation, deregulation and opening up of financial and capital markets. Before this, foreign investment was allowed only in the manufacturing sector.
The premier was told that the “global economic recession, power outages, law and order situation and other domestic factors necessitated the need for further liberalisation of investment policy.”
The BOI has expressed the hope that formation of industrial clusters through the Special Economic Zones Act will bring Pakistan on world’s investment radar. President Zardari is expected to sign the SEZ Bill on September 10, which has already been approved by parliament.
The government is trying to remove other bottlenecks in the way of investment, particularly bureaucratic snags, in an effort to ensure fast track approval of investment projects.
To empower the BOI and make it a one-window facility for foreigners, the rules of business will be amended. In this regard, proposals have already been sent to the Cabinet Division.
At present, the BOI had no role in approval of foreign investment projects and economic ministries were creating hurdles instead of facilitating investment, the BOI complained to the premier.
The BOI officials also proposed that experts and professionals from other fields and ministries could be hired to work under the board, which would enhance its capacity.
Published in The Express Tribune, September 5th, 2012.