Emails and foreign investment

A few weeks ago, I sent out eight emails, as a potential foreign investor based in the US, to different government investment promotion agencies in Pakistan and abroad. This was part of a small experiment to assess how responsive these agencies are. The short email, sent to each agency, simply expressed prospective interest to invest in a high potential sector along with a request to schedule a conference call with a relevant official. I selected four Pakistani government agencies for this experiment, including the Federal Board of Investment, Sindh Board of Investment, Punjab Board of Investment and Trade and Khyber-Pakhtunkhwa Board of Investment and Trade. To draw a comparison, I also sent similar emails to federal investment promotion agencies of Malaysia, Ireland, Singapore and India. In all cases, I used email addresses given on the respective agencies’ websites.

The response was astonishing. Only two agencies — IDA Ireland and Invest India — sent me immediate automated responses, with the latter issuing a ticket number to track my request. After three working days, I got personalised responses from Indian, Irish and Malaysian agencies. Malaysian Investment Development Authority (Mida) and Economic Development Board (EDB) Singapore referred the request to their New York offices, which diligently started pursuing me within a week’s time. No response came from any of the Pakistani agencies, till the time of writing this article, which was more than a month after the emails were sent.

If I were an actual investor, my interest would have been lost and my faith in government capacity doomed. The uniform response, or the lack thereof, from all government agencies in Pakistan reflects that it is not about a particular political government. Instead it is about lack of effective government functioning at the operational level. Political leadership at the federal level as well as in the three provinces is equally vocal in advocating their case for attracting foreign direct investment (FDI), offering wide ranging incentives, plug-and-play industrial estates and one window operations. One level below, however, expecting a simple email response is unrealistic.

Another major impediment faced by these agencies is absence of global outreach. While representatives of these agencies do visit other countries, such visits often are part of larger political delegations. None of these agencies have any global office. This means that if there is a serious international investor, there is nobody within these agencies’ network who could personally follow up with him and facilitate that process.

Although Pakistan has trade ministers and commercial counsellors deployed in a number of international locations, their primary focus is on trade and not on investment and their linkage with investment promotion agencies is either non-existent or abysmally weak. In comparison, EDB has 19 global offices, IDA has 20, while Mida has access to 24 international offices.

Websites for public investment promotion agencies can be potential gateways that can attract or discourage potential investors. An investor would look for basic information on why he should invest in a particular country, identify high potential sectors, get familiarised with business processes and access contacts for further communication. Once there is a solid lead, these contacts need to be vehemently pursued and facilitated. Investment promotion agencies have to schmooze them, arrange personalised visits and link them up with other relevant agencies.

CPEC is quoted as a game changer, which will pave the way for attracting FDI. The initial portfolio of road and energy projects is just the start. Real gains have to come from private investments in manufacturing and industry relocation. However, with the present capabilities of our government investment promotion agencies, this seems like a Herculean task. If Pakistan is serious about attracting FDI, it urgently needs to build some serious capacity in these organisations.

Published in The Express Tribune, July 14^th, 2017.

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